This paper examines potential effects of reversing North American integration, focusing on recent USMCA trade disputes over Mexico's GE corn import ban. Using a CGE model, we simulate Mexico's reduction in GE grain imports and U.S. tariff escalation with partner retaliation. Results show significant disruptions: U.S. grain exports fall by 9.3%, and Mexican grain output rises 16% amid sectoral inefficiencies. Broad-based tariffs distort production, reduce GDP in Mexico and Canada, and shift global trade patterns. U.S. subsidies partially offset domestic losses but increase fiscal burdens. Our findings highlight the high economic costs and global spillovers from reversing regional agricultural integration.

This paper presents gtapshape, an R package that allows the user to flexibly disaggregate the national endowments used in the computational general equilibrium (CGE) models based on the GTAP-AEZ framework. By allowing the user to specify the set of subnational boundaries in the form of a shapefile, gtapshape allows for a richer understanding of how within-country heterogeneity impacts the results of CGE models. gtapshape's modular strategy also allows for fast updating of the database as new sources of data become available. gtapshape is fully written in R and hosted in GitHub as free and open software. This should facilitate its incorporation into specialized workflows.

Nitrogen fertilizer prices have been volatile, especially in recent years. This study decomposes nitrogen price changes into structural shocks related to supply and demand via a structural vector autoregression (SVAR) model and quantifies the relative contributions of these shocks to price movements over recent decades. Our findings reveal that corn and natural gas prices account for only a fraction of ammonia price fluctuations, while other factors in the nitrogen market have a more substantial influence.

Poultry is the second most consumed meat in the world and the most traded livestock commodity by volume. Much of this trade is driven by rising demand in developing country markets; as such, poultry trade is expected to continue to grow over the next decade as incomes increase in these countries. However, poultry trade is among the most heavily protected agricultural sectors in terms of tariffs and tariff rate quotas (TRQs). In addition, many nontariff measures (NTMs) limit or even prohibit poultry trade. This report combines data on World Trade Organization (WTO) poultry NTM notifications with domestic and international poultry trade flows to estimate whether and to what extent different types of NTMs affect the value of poultry trade. The results suggest that, on average, nondiscriminatory poultry NTM initiations notified to the WTO have a small positive effect on the value of international poultry trade compared to domestic poultry trade. In aggregate, this finding suggests that the trade facilitation effect dominates, but this may not be the case for any individual NTM or country pair. This study also finds that the effects of WTO notifications appear to vary by importer region

Increasing agricultural productivity is vital to ensure that global food demand can be met. However, the impact of a changing climate on temperatures and precipitation could potentially influence agricultural productivity by affecting crop yields. This report combines the latest estimates of yield changes from the Agricultural Model Intercomparison and Improvement Project with projections of future productivity changes in the form of total factor productivity (TFP) to gain a better understanding of the future of agricultural production (and thus of food supply). Yield estimates are used from a high greenhouse gas emissions scenario (to show an upper bound, as the impact of climate on yields is the strongest) for corn, rice, soybeans, and wheat. Yield changes are then combined with TFP estimates across four scenarios where research and development (R&D) assumptions determine the rate of TFP growth. Finally, the changes in yields and TFP, in conjunction with changes in populations and incomes, are assessed to shape the projected state of food supply in 2050. The results suggest that with no additional R&D expenditures, climate change would result in a production-consumption gap. When R&D investments are increased by amounts corresponding to the remaining three scenarios, TFP growth is sufficient to mitigate the impacts of climate change and projected population/income growth to maintain production at a level to meet global demand for food

Since joining the North American Free Trade Agreement, Mexico has increased its meat production and exports and become more dependent on imported feedstuffs such as genetically engineered (GE) corn. Mexico recently banned the use of GE corn in corn-based foods and called for a gradual substitution away from the use of GE corn for other uses (e.g., feed). This paper considers how a complete ban on GE corn might affect Mexican households using a computable general equilibrium (CGE) model to simulate the impact over the medium run (5 years). Results indicate that Mexico decreases corn imports by 76.9% and increases corn production by 65.6%-an increase that would require 3.3 million hectares more land for corn. The policy leads to a 24.8% increase in Mexico's corn price and up to a 6% increase in the prices of other agricultural products. But Mexico might have difficulty shifting land to corn; as such, we consider an alternative scenario that restricts land movements. We find that impacts are further exacerbated in this scenario-for example, corn prices triple. Our final contribution is to pair these results with a compensating variation calculation based on the almost ideal demand system. We find that Mexican households would need to spend, on average, between 6.7 and 13.9% more on food, depending on the scenario, to compensate for the resulting price escalations. Ultimately, our results show that a move toward greater food sovereignty in Mexico is ultimately borne by consumers via higher food prices.

The African Continental Free Trade Area (AfCFTA) is expected to provide trade gains for Africa, especially from reducing non-tariff measures (NTM). Unfortunately, data on NTMs is scarce, both by country and sector. Using three underlying NTM data sets and other data sources, we provide a range of estimates to fill the missing gaps in the existing estimates. Focusing on agriculture, we then use a computable general equilibrium model to estimate the effects of the AfCFTA. Results from all three data sets indicate that NTM reduction leads to much greater intra-Africa trade gains than tariff reduction alone.

The United States is one of the largest producers and exporters of corn and soybeans globally partly because of yields that are among the highest in the world. However, a changing climate could affect these yields, which could ultimately affect production and the availability of products for export. In this report, the authors estimate that U.S. corn yields could increase 3.1 percent and soybean yields could decrease 3.0 percent in 2036 relative to 2016, based on climate projections. These results are driven primarily by the increased frequency of periods of extreme heat and declines in precipitation in counties east of the 100th meridian part of the United States. These estimates are then used in a simulation model to explore the market implications from these yield projections, and those results indicate that these yield changes could affect U.S. production and ultimately trade. The estimated growth in U.S. corn yields increases corn production that could ultimately affect the amount of corn the United States has available to export. Holding yields in other countries fixed, the model indicates that U.S. corn exports increase 0.36 percent (the equivalent of $63 million). The decline in soybean yields decreases production, leading to a 1.17-percent drop in U.S. exports (the equivalent of $319 million) based on 2016 exports

Elasticities are often a combination of expert decisions and literature estimatesmany of which are outdated.Previous efforts have focused on estimating the most commonly used elasticities in economic models (e.g., the Armington elasticity of trade); however, several elasticities still have little empirical basis.The elasticity of substitution between intermediate inputs and value-added is one example, but this elasticity is quite important as it governs producers' production regimes across sectors and regions reflecting their level of efficiency.We examine and estimate this elasticity for one of the most widely used CGE models (parameter ESUBT in the GTAP model), using the latest five datasets available (2004, 2007, 2011, 2014, and 2017) in the version 11 GTAP database.Our work finds that the default value of zero in GTAP does not reflect the behavior implied by the data.Using our estimates, we propose a set of new values for the short run (about one year), two medium runs (three years and six years) and the long run (i.e., infinite time horizon).We demonstrate the importance of our new estimates using a scenario from the EU Farm to Fork policy where we find that using the estimated elasticities leads to much milder market and welfare impacts, and that these effects are further dampened as the time horizon of the simulation increases.

We use a ‘Nash in Nash’ framework within a computable general equilibrium model to determine the welfare maximizing set of bilateral trade agreements for countries in the Trans-Pacific Partnership. Comparing these agreements to an agreement involving all countries/sectors, we find that welfare is always larger in the multilateral agreement. This is because several sectors are often excluded from the bilateral agreements, and not all countries would have a bilateral agreement with others. The sectors that are often excluded from the agreements are agriculture, as these sectors are often deemed ‘sensitive’ in negotiations and are protected by high initial tariffs.

Since the turn of the century, Japan has relied on domestic pork production to supply around half of its pork consumption. In part, this production has been aided by import barriers that have helped shield domestic pork producers from foreign competition. Between 2018 and 2021, Japan ratified trade agreements with the United States, European Union, United Kingdom, and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) countries that will virtually eliminate these import barriers by 2028. With essentially all of Japan’s pork imports coming from these trade agreement partners, Japan’s pork market could change considerably in the next 6 years, with imports taking a larger share of domestic consumption. For the United States, this change is estimated to lead to an additional $281 million worth of pork exports to Japan. This report uses a global economic model to estimate the impacts of these trade agreements. Results from the Global Trade Analysis Project (GTAP) model suggest that when the trade agreements are fully implemented in 2028, there could be a 3.6- to 13.9- percent increase in pork imports into Japan in 2028 relative to 2018 levels. This increased exposure to foreign competition could also reduce Japan’s pork production between 4.2 and 11.8 percent

Global agricultural trade, which increased at the end of 2020, has been described as "resilient" to the impacts of the COVID-19 coronavirus pandemic; however, the size and channels of its quantitative impacts are not clear.Using a reduced-form, gravity-based econometric model for monthly trade, we estimate the effects of COVID-19 incidence rates, policy restrictions imposed by governments to curb the outbreak, and the de facto reduction in human mobility/lockdown effect on global agricultural trade through the end of 2020.We find that while agricultural trade remained quite stable through the pandemic, the sector as a whole did not go unscathed.First, we estimate that COVID-19 reduced agricultural trade by the approximate range of 5 to 10 percent at the aggregate sector level; a quantified impact two to three times smaller in magnitude than our estimated impact on trade occurring in the non-agricultural sector.Second, we find sharp differences across individual commodities.In particular, we find that non-food items (hides and skins, ethanol, cotton, and other commodities), meat products including seafood, and higher value agri-food products were most severely impacted by the pandemic; however, the COVID-19 trade effect for the majority of food and bulk agricultural commodity sectors were found to be insignificant, or in a few cases, positive.Finally, we also examine the effects across low vs high income countries, the changing dynamics of the pandemic's effect on trade flows, and the effects along the extensive product margins of trade.

Legislation has been proposed that would change the European Union (EU) agricultural supply chain, including targeted reductions in the use of agricultural inputs. Our results indicate that reducing those inputs (fertilizer, pesticides, land, and antimicrobials) could lead to a reduction in the EU agricultural production by 12%, less competitiveness in export markets, and negative impacts to consumer budgets and societal welfare. If the EU were to implement technological improvements, the impacts would be lessened; however, the necessary improvement in technology will require additional investment in research and development. Based on historical trends, these improvements are projected to take up to 27 years.

Policies that restrict the use of agricultural inputs have been shown to reduce output, farmers' incomes, and increase food prices, which could ultimately lead to more food insecurity. In this paper, we consider the EU Farm to Fork Strategy's proposed reductions of agricultural inputs on food security in 77 low- and middle-income countries under two implementation scenarios: EU-only and Global. Our findings indicate that compared with the status quo, each scenario results in a net increase in food insecurity, which ranges from 30 million (EU-only) to 171 million (Global) by 2030.

Mirror clauses have recently been discussed as a way of setting a level playing field for EU farmers in terms of the proposed European Green Deal (EGD) and the proposed reduction in usage of agricultural inputs. This study builds a Nash equilibrium model to determine if regions would implement these reductions to maintain open trade with the European Union. We find that more regions joining the EGD dampen the negative market impacts to the European Union, but we also find that major agricultural producers do not join the European Union in implementing the EGD.

The ten member countries of the Association of Southeast Asian Nations (ASEAN) have pursued trade agreements with major trade partners (Plus Three-China, Japan and Korea; and Plus Six-Plus Three, Australia, New Zealand and India). The recent ASEAN move towards further economic integration suggests potential future agreements with other major trade partners. This study examines the economic opportunities for such expansion, focusing on several options for ASEAN: removing tariffs within the trading bloc, removing the remaining tariffs on trade with the six countries that they already have trade agreements with or more external options (agreements with either the EU or the US). We use a computable general equilibrium model (CGE) to examine these options, highlighting changes to both agriculture and non-agriculture. Agriculture is the biggest beneficiary when considering an agreement with the EU or Plus Six, while non-agriculture gains the most in an agreement with Plus Three or the US. Deeper integration through trade facilitation and realising technological spillovers increase welfare gains from select agreements.

Much of the attention from COVID-19 has been on the impacts on tourism and other service sectors; but there has been a growing interest in some agricultural and food topics, such as the decline in food away from home (FAFH) expenditures. Our work considers the importance of FAFH in the overall economy, and we also consider changes in agricultural production and trade that have occurred because of COVID-19. We gather data on actual changes to these components, as well as similar shocks to non-agricultural sectors, and employ a simulation model to estimate the impacts on gross domestic product (GDP). Results indicate that changes from agriculture due to COVID-19 have had a larger effect on the overall U.S. economy than the share of agriculture in the economy at the beginning of COVID-19. But the non-agricultural shocks still outweigh the impacts from agriculture by a magnitude of 3. Breaking the results down along the components, we find that the loss in FAFH expenditures is the largest contributor to the change in GDP resulting from shocks to agricultural markets and conclude that agricultural production/trade markets have been very resilient during the pandemic. Our results also indicate that our model (computable general equilibrium) does reasonably well in estimating GDP compared to actual changes due to the inclusion of data on actual demand, supply, and fiscal responses to COVID-19.

Computable general equilibrium (CGE) models provide valuable insights into economy-wide and aggregate sectoral impacts of trade policies. However, when it comes to the assessment of specific interventions, the level of aggregation in these models is often deemed too coarse to inform negotiations. For example, in the Global Trade Analysis Project (GTAP) Data Base, all vegetables, fruits and nuts – over hundred individual commodities – are represented under one sector. Analysis at the tariff line level is typically provided by partial equilibrium (PE) models, which cannot, however, capture economy-wide effects. In this paper, we contribute to the development of the GTAP-HS framework, which comprises disaggregated values of output, trade flows and domestic absorption with supporting model components nested within the standard GTAP GE model. We construct the GTAP-HS database with GTAP vegetables, fruits and nuts sector disaggregated into 79 commodities. We apply this modelling framework to the assessment of the ongoing trade frictions between the United States and its trading partners. We find that there are significant advantages to using this nested approach to trade policy analysis, including possibilities of the trade policies assessment at the tariff line, representation of the commodity-specific substitution and avoidance of the ‘false competition’ critique.

Abstract Focusing on seven major agricultural commodities with a long history of trade, this study employs data-driven analytics to decipher patterns of trade, namely using supervised machine learning (ML), as well as neural networks. The supervised ML and neural network techniques are trained on data until 2010 and 2014, respectively. Results show the high relevance of ML models to forecasting trade patterns in near- and long-term relative to traditional approaches, which are often subjective assessments or time-series projections. While supervised ML techniques quantified key economic factors underlying agricultural trade flows, neural network approaches provide better fits over the long term.

Countries around the world carry very diverse sets of rules and practices when it comes to the regulation of agriculture. These differences stem from varying degrees of concern or perceived risk for food safety, animal and plant health concerns, and environmental protections and further the legacy of different regulatory traditions. Differences in standards across borders can in turn lead to sources of contention between trading partners. With growing concerns for climate change and increasing demand for food standards, major food systems are heading into different directions. Further, given the economic importance of market access and heterogeneity in demands for regulations across regions, production practices and standards by major global producers evolving under different spheres of influences. This study examines the adoption of international agri-food practices in the context of economic welfare tradeoffs between market access and costs of adoption, using the case of the EU’s Farm to Fork and Biodiversity Strategies. We introduce a modeling technique in our economic framework that endogenously determines a countries decision to adopt the EU’s farm to fork program. We present results based on if the benefits from joining (keeping trade markets open with other adopters, but enduring higher production costs) or greater than the benefits from not joining (closed trade markets, but no change in production costs). In addition, we use the recent departure of the UK from the EU to examine if the reduced size of the EU might affect other countries from participating in their policy.