C. Parr Rosson

Trade Creation and Trade Diversion in the North American Free Trade Agreement: The Case of the Agricultural Sector

This paper examines the impact of the U.S.-Mexico trade agreement under NAFTA. The results suggest that U.S. agricultural imports from Mexico have been responsive to tariff rate reductions applied to Mexican products. A 1 percent decrease in tariff rates is associated with an increase in U.S. agricultural imports from Mexico by 3.96 percent in the first six years of NAFTA and by 1.07 percent in the last six years of NAFTA. US imports from Mexico have also been attributable to the pre-NAFTA tariff rates. Overall, the results indicate that the U.S.-Mexico trade agreement under NAFTA has been trade creating rather than trade diverting.

Impacts Of Globalization On Agricultural Competitiveness: The Case Of Nafta

Major components of agricultural competitiveness, including definitions, factors, and indicators of competitiveness, are discussed, The case of the North American Free Trade Agreement (NAFTA) is used to illustrate how factors have influenced the competitive position of the NAFTA countries. Traditional neoclassical trade theory is used to evaluate the impact of currency exchange rate fluctuations and trade preferences on agricultural competitiveness. Pre- and post-NAFTA market shares are evaluated for five agricultural commodities of importance to the southern United States. The results of these evaluations are compared with theoretical expectations and discussed with special emphasis on implications for future trade negotiations.

Demand for dairy products in Mexico

Mexico is the worlds largest importer of non-fat dry milk (NFDM) and imports of cheese, fluid milk, and whey have increased rapidly in the past four years. In the wake of GA TI and the NAFf A, as well as recent economic developments in Mexico, world dairy markets will be affected as a result of changes in the Mexican dairy sector. The study analyzes both domestic and import demand for dairy products in Mexico to determine price and income elasticities as well as import elasticities. The results indicate that the demand for fluid milk is the most responsive to price changes and NFDM demand is inelastic with respect to its own price. There is little subtitution between fluid milk and non-fat dry milk, although fluid milk is relatively elastic, which suggests the existence of other substitutes for fluid milk. Estimation of import demand equations reveal similar trends in response to price changes, but income elasticity of imports was highest for fluid milk which suggests that Mexico will import possibly more fluid than dry milk as incomes rise. The exchange rate was the most significant variable influencing all dairy product imports.

Free trade impacts on US—Mexican meat trade

The North American Free Trade Agreement (NAFTA) promises important impacts on US agriculture, including meats and livestock. Empirical analyses of free trade effects, using import demand elasticities, indicate that with moderate increases in income and similar decreases in price, Mexico could be expected to significantly expand meat imports by 400,000 tons annually, with the United States supplying increasing quantities of exports.

Impacts of Expanded Ethanol Production on Southern Agriculture

This study analyzes the potential impacts of expanded ethanol production on southern agriculture. Results of regression analysis suggest that acreage planted for field crops (corn, cotton, soybeans, and wheat) is inelastic with respect to relative prices. The results provide statistical evidence of potential significant acreage shifts favoring corn over cotton, soybeans, and wheat. Simulations indicate that higher corn prices will increase corn acreage, but the South continues to be a deficit corn region. U.S. corn production is capable of supplying domestic demand for ethanol, feed for livestock and poultry, and other uses, while maintaining exports at more than 2 billion bushels annually.

Discussion: Exchange Rates, Energy Policy and Outcomes in Agricultural Markets

These three invited papers examine the role that exchange rates may have in influencing commodity prices, input prices and farm income. The papers arguably represent one of the most important recent attempts to quantify and explain these new linkages. As U.S. and world agriculture moves from a period of high output prices to a period of lower prices, understanding the impact of macroeconomic variables on farm input costs and farm income will become more important. Further, it will be equally important for policy makers to undertake appropriate market interventions in order to have maximum effectiveness should this period of cost-price-squeeze continue to intensify. Each of the papers has something significant to contribute to the understanding and debate of these new linkages between agriculture, the macroeconomic environment, and the energy sector.

Soybean production and trade policy changes in Argentina and Brazil: Implications for the competitive position of the United States

Expansion of the soybean production and marketing capacity in Argentina and Brazil has resulted in a declining share of the world market for US soybeans and products. Recent policy changes made in these South American countries may affect their competitive position relative to the United States. Policy changes in both countries are analyzed to determine their expected impacts on the US soybean complex. Results indicate that while the United States may maintain its competitive position, Argentina should become more competitive and Brazil may decline in competitiveness relative to the other two countries. Implications of these results for the US soybean complex are noted and discussed.

The Economic Impact of U.S. Tobacco Products Exports

The economic impacts of increasing U.S. tobacco exports on the U.S. economy are analyzed. Simulation of expanded exports to South Korea and Thailand are conducted. Over

Improving Transportation Infrastructure in Brazil: An Analysis Using Spatial Equilibrium Model on the World Soybean Market

1.1 billion in economic activity and 12,000 jobs were associated with tobacco export increases to these countries. Declining raw tobacco exports to Thailand, however, offset gains associated with greater cigarette sales. The resultant losses totaled

An Ex Ante Assessment of Investments in Texas Grapefruit under Uncertainty

5.3 million in economic activity and over 378 jobs in the U.S.