An Economic Analysis of the Effects on the World Dairy Sector of Extending Uruguay Round Agreement to 2005

Cox, Thomas L.; Coleman, Jonathan R.; Chavas, Jean‐Paul; Zhu, Yong

doi:10.1111/j.1744-7976.1999.tb00257.x

Cited by 28 publications

(11 citation statements)

References 3 publications

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“…Demand/supply shifters are introduced to the supply/demand functions. Domestic policies (intervention prices, milk quotas, production subsidies, classified pricing) and trade policies (import quotas, two-tiered import quotas, export subsidies) are formulated explicitly in the model and allow for extensive policy analysis (Cox et al, 1999).…”

Section: The Modelmentioning

confidence: 99%

An economic analysis of the impacts of trade liberalization on Asian dairy market

Peng

Cox

2006

Food Policy

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This paper develops an economic analysis of the impacts of further trade liberalization scenarios on Asian dairy markets, using a world dairy model incorporating both vertical and spatial characteristics of the world dairy sector. Japan and Korea' producers will suffer much bigger losses from trade liberalization than other countries in the region; Japan and Korea's producers get much more protection from trade distortions than from domestic subsidy. India is a potential competitive exporter if Asia is liberalized. China and India are potential competitive exporters under global free trade. South East Asia and other South Asian countries remain importers under free trade. Greater trade liberalization around the world increases exports for potential exporters and/or ease importing pressure for potential importers. The increasing order of competitiveness of Asian dairy economies sectors is found to be Japan, Korea, South East Asia, other South Asia, China and India. China and India consumers would lose from world trade liberalization, but the other countries' consumer surplus will increase.

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Section: The Modelmentioning

confidence: 99%

An economic analysis of the impacts of trade liberalization on Asian dairy market

Peng

Cox

2006

Food Policy

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“…Authors of a few previous studies have incorporated the component structure of milk and manufactured dairy products in analyses of regional dairy trade (e.g., Chavas et al . 1998) as well as international trade (e.g., Cox et al . 1999;Lariviere and Meilke 1999;Cox and Chavas 2001;Bouamra-Mechemache et al .…”

Section: An Equilibrium Displacement Model Of World Trade In Dairy Comentioning

confidence: 99%

Supply and demand for commodity components: implications of free trade versus the AUSFTA for the US dairy industry*

Alston

Balagtas

Brunke

et al. 2006

Aus J Agri & Res Econ

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During the negotiations on the Australia-US free trade agreement (AUSFTA), the US dairy industry vigorously opposed opening the US market to imports of Australian dairy products on the grounds that the US industry would be devastated. Subsequently, the agreement signed in February 2004 made an exception for dairy, providing for only limited quota expansion and no free trade, even at the end of the long implementation period. This paper presents a simulation model of world dairy markets, represented by supply and demand equations for fat and non-fat components of milk and manufactured dairy products. We use the model to analyse the effects on US milk markets of both a hypothetical agreement, allowing free bilateral trade in dairy products, and the actual AUSFTA. An important contribution to the literature is the derivation of explicit supply and demand relationships for milk components. The components model allows an analysis of long-term production, consumption, and trade patterns that is not tied to specific, fungible products. Simulations indicate that increased imports from Australia resulting from bilateral trade liberalisation would have resulted in small reductions in US milk prices and production. The much smaller increases in Australian access to the US market under the actual AUSFTA will have even smaller, almost negligible, impacts.

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“…There have been several empirical studies examining the impact of free trade arrangements on the US dairy industry. These studies have generally found that trade liberalization would not have a huge negative or positive impact on the United States dairy industry provided that trade liberalization is done multilaterally by all countries (Cox et al, 1999;de Gorter and Boughner, 1999;Larivière and Meilke, 1999;Shaw and Love, 2001;Nicholson, 2003). However, the extent of damage that farmers perceive they will suffer appears to exceed what current empirical evidence shows, and so it seems that it will be even more difficult to reach any worldwide consensus on substantial reduction of border measures for dairy.…”

Section: Implications Of Doha Round Agreements For Future Dairy Policymentioning

confidence: 99%

Impacts of the Doha Round Framework Agreements on Dairy Policies

Suzuki

Kaiser

2005

Journal of Dairy Science

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Dairy is highly regulated in many countries for several reasons. Perishability, seasonal imbalances, and inelastic supply and demand for milk can cause inherent market instability. Milk buyers typically have had more market power than dairy farmers. Comparative production advantages in some countries have led to regulations and policies to protect local dairy farmers by maintaining domestic prices higher than world prices. A worldwide consensus on reduction of border measures for protecting dairy products is unlikely, and dairy will probably be an exception in ongoing World Trade Organization (WTO) negotiations. Under the Doha Round framework agreements, countries may name some products such as dairy as "sensitive," thereby excluding them from further reforms. However, new Doha Round framework agreements depart from the current WTO rule and call for product-specific spending caps. Such caps will greatly affect the dairy sector because dairy accounts for much of the aggregate measure of support (AMS) in several countries, including the United States and Canada. Also, the amounts of dairy AMS in several countries may be recalculated relative to an international reference price. In addition, all export subsidies are targeted for elimination in the Doha Round, including export credit programs and state trading enterprises, which will limit options for disposing of surplus dairy products in foreign markets. Currently, with higher domestic prices, measures for cutting or disposing of surpluses have been used in many countries. Supply control, which is not regulated by WTO rules, remains as an option. Although explicit export subsidies are restricted by WTO rules, many countries use esoteric measures to promote dairy exports. If countries agree to eliminate "consumer financed" export subsidies using a theoretical definition and measurements proposed herein as Export Subsidy Equivalents (ESE), dairy exports in many countries may be affected. Although domestic supports and export subsidies will be reduced in the Doha Round, possible exclusion of "sensitive" products from tariff reduction will help some countries' dairy sectors survive after those final agreements. A key concern for those countries will be the simultaneous restriction of surplus-disposing measures. With fewer marketing options for surpluses, countries that continue border protection and high internal prices will likely be forced to use domestic supply control programs in the future.

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An Economic Analysis of the Effects on the World Dairy Sector of Extending Uruguay Round Agreement to 2005

Cited by 28 publications

References 3 publications

An economic analysis of the impacts of trade liberalization on Asian dairy market

An economic analysis of the impacts of trade liberalization on Asian dairy market

Supply and demand for commodity components: implications of free trade versus the AUSFTA for the US dairy industry*

Impacts of the Doha Round Framework Agreements on Dairy Policies

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