Anna Strutt

Agriculture and the WTO: next steps

The potential welfare gains from further liberalizing agricultural markets are shown in this paper to be huge, both absolutely and relative to gains from liberalizing textiles or other manufacturing, according to new simulation results of the Global Trade Analysis Project. The probability of the WTO delivering sizeable farm protection cuts in the next round of multilateral trade negotiations would be greater if industrial and service sector negotiations were undertaken simultaneously as part of a comprehensive new round. The immediate challenge for analysts and negotiators is to identify and assess feasible policy packages that facilitate genuine agricultural reform rather than encourage inefficient re-instrumentation of farm support measures. Such assessment will require significant improvements in both analytical tools and databases. Copyright 2001 by Blackwell Publishing Ltd.

Will Trade Liberalization Harm the Environment? The Case of Indonesia to 2020

Most-favoured-nation (MFN) trade liberalizations willalways improve global economic welfare providedglobally optimal environmental and other policies arein place. But since the latter proviso is not met inpractice, empirical studies of the environmental andresource depletion effects of such reforms are neededto determine whether trade reform is still worthwhile.This paper provides a methodology for doing that. Itis illustrated with a case study of Indonesia, a largenewly industrializing country that is rich in naturalresources and committed to taking part in majormultilateral and regional trade liberalizations overthe next two decades. A modified version of theglobal CGE model known as GTAP is used to project theworld economy to 2010 and 2020 without and with thosereforms. An environmental module is attached to theIndonesian part of that global CGE model so as tomeasure the effects of changes in economic activity onair and water pollution. The proportionalcontributions to environmental indicators of changesin the level and composition of output, and changes inproduction techniques, are identified. A base caseprojection without trade reform is compared withalternative scenarios involving full globalimplementation of Uruguay Round commitments by 2010,and the additional move to MFN free trade by APECcountries by 2020. The study suggests that, at leastwith respect to air and water, trade policy reformsslated for the next two decades would in many casesimprove the environment and reduce the depletion ofnatural resources and in the worst cases would addonly slightly to environmental degradation – evenwithout toughening the enforcement of existingenvironmental regulations or adding new ones, and evenif the reforms stimulate a faster rate of economicgrowth.

International Trade Agreements and International Migration

Despite large potential economic gains to the countries concerned, bilateral and multilateral negotiations regarding liberalization of migration have not had the high profile of trade negotiations and agreements. Migration and trade have been traditionally the prerogative of different ministries, yet there are many interdependencies between international trade, foreign investment and migration. The relevance of these interdependencies for trade negotiations has been remarkably ignored in the literature. In this paper we therefore focus on the two-way interaction between international migration and agreements designed to enhance cross-border trade or investment. Liberalization of international trade in services and the movement of people are likely to offer much more significant economic gains than liberalization of remaining barriers to goods trade. However, progress within multilateral frameworks is fraught with difficulty. Mode IV of GATS is restricted to temporary movement of service employees and has yielded little progress so far. Negotiations within more flexible unilateral and bilateral frameworks are likely to be more successful in liberalizing the movement of labour. We discuss several specific examples and conclude that trade negotiations are increasingly accommodating migration policies that favour temporary migration over permanent migration and that the migration regulatory framework is likely to be further linked to trade and investment over time.

Transport Infrastructure and Trade Facilitation in the Greater Mekong Subregion

This insightful book collects empirical analyses and case studies to clarify issues and draw policy recommendations for facilitating greater regional trade through increased cooperation.

Impact Of East Asia’s Growth Interruption and Policy Responses: The Case Of Indonesia

Assessments to date of the consequences of implementing the Uruguay Round (UR) of multilateral trade negotiations have assumed medium-term rates of economic growth in East Asia that now seem unsustainable. This paper compares one set of those estimates to 2005 with an alternative set involving an interruption to East Asian economic growth in the late 1990s, using the global, economy-wide GTAP model. Attention focuses on results for Indonesia, the worst-affected country in the region. An important consequence of the crisis is that Indonesia is likely to become more agrarian for a time than it otherwise would have been. Also, both income levels and the gains from the UR will be lower at the completion of UR implementation in 2005 than would have been the case without the crisis. Hopefully this will boost support in Indonesia (and other East Asian countries) for a push to catch up through further unilateral, regional and global trade and investment liberalizations and domestic policy reform. The benefits to Indonesia from embracing further unilateral reform, as estimated by the GTAP model, are contrasted with the costs of the alternative strategy of reneging on UR commitments to liberalize trade. Of particular importance are policies affecting agriculture’s capacity to be an engine of growth recovery.

Assessing Socioeconomic Impacts of Transport Infrastructure Projects in the Greater Mekong Subregion

This study attempts to quantify the links between infrastructure investment and poverty reduction using a multi-region general equilibrium model, supplemented with household survey data for the Greater Mekong Subregion (GMS). Infrastructure investment is an important step in economic development, with improvements in transportation infrastructure boosting economic opportunities throughout the region, for example by significantly reducing travel times and costs. In this study, we concentrate on quantifying the effects of some of the key linkages between upgraded infrastructure, economic growth, and poverty reduction. We model the impact of both reducing transport costs and improving trade facilitation in the GMS. Our findings suggest strong gains to the GMS countries as a result of infrastructure development and trade facilitation with national poverty reduced throughout the region. However, the impact on various segments of these populations differs, depending in part on factor returns.

Agriculture and Food Security in Asia by 2030

i»?Rapid trade-led economic growth in emerging Asia has been shifting the global economic and industrial centres of gravity away from the north Atlantic, raising the importance of Asia in world trade but also altering the commodity composition of trade by Asia and other regions. What began with Japan in the 1950s and the Republic of Korea and Taipei,China from the late 1960s has spread to the much more populous ASEAN region, the People’s Republic of China, and India. This paper examines how that growth and associated structural changes are altering agricultural markets in particular and thereby food security. It does so retrospectively and by projecting a model of the world economy that compares alternative growth strategies, trade policy scenarios and savings behaviors to 2030. Projected impacts on sectoral shares of gross domestic product (GDP), “openness†to trade and the composition and direction of trade are drawn out, followed by effects of the boom in non-farm sectors on agricultural self-sufficiency and real food consumption per capita in Asia and elsewhere. The paper concludes by drawing implications for policies that can address more efficiently Asia’s concerns about food security and rural-urban income disparity than the trade policy measures used by earlier-industrializing Northeast Asia.

Livestock production and the environment: Some impacts of growth and trade liberalisation

Large increases in livestock production have led to increased pressures on the natural environment in many regions of the world. In the absence of new environmental policies, these environmental problems are projected to worsen as demand for livestock products continues to grow. In this paper we investigate the linkages between growth, trade and the environment for livestock to the year 2005, including Uruguay Round trade reform. We focus on nitrate pollution from livestock sources, given projected changes in the world economy. Our analysis suggests that the aggregate environmental implications of Uruguay Round‐type trade policy reform appear to be small or even positive for world livestock production. On the other hand, in the absence of improved environmental policies, the aggregate environmental impact of growth and structural economic change to 2005 is likely to be of much greater consequence to those concerned about environmental damage.

Multilateral agricultural trade reform: Potential impacts of current negotiations on New Zealand

Multilateral agricultural negotiations are a crucial part of the WTOs Doha Development Agenda, the outcome of which may significantly impact New Zealand. In this paper we review progress and key proposals put forward to date in the negotiations. We use a newly available and significantly improved version of a global trade database to model the potential economic effects of trade reforms that might be agreed in the Doha Round. Our results indicate that New Zealand is likely to experience relatively large aggregate gains from reform, with significant benefits arising from terms of trade improvements. In the event of a successful outcome from the Doha Round, New Zealands farm sector and agricultural exports are likely to become further dominated by dairy products. We find that increased access to the markets of industrial countries and a rapid phase‐out of agricultural export subsidies are likely to be of particular importance. Efforts to negotiate global reductions in domestic farm support appear to offer the least benefit to New Zealand.

Implications of the Global Financial Crisis for China: A Dynamic CGE Analysis to 2020

The global financial crisis resulted in a significant downturn in the global economy, with impacts felt throughout the world. In this paper, we use a dynamic global general equilibrium model to explore the longer-term impacts of the financial crisis, with a particular focus on China. The economies of most countries suffered to some extent, with the extent of declines in the long run likely to depend on the extent to which investment declines. Our results suggest that overall the financial crisis leads to international trade falling by approximately 14 percent from the 2020 baseline level. Within this, the composition of trade changes, particularly reflecting changes in demand for construction of investment goods and increasing longer-term demand from economies like China. We also briefly consider the impact of a more protracted recovery from the crisis, which has even more significant impacts on the global economy.