Potential gains from reducing trade barriers in manufacturing, services and agriculture

Trade barriers

A GLOBAL PERSPECTIVE ON REGIONAL INTEGRATION IN NORTH AMERICA

International Relations/Trade,

A Survey of Findings on the Poverty Impacts of Agricultural Trade Liberalization

The purpose of this survey is to review the available empirical evidence on the impacts of agricultural trade liberalization on poverty – considering both the impact of domestic and international liberalization. Since trade liberalization is generally an economywide phenomenon, with tariff cuts occurring across a wide range of commodities, we do not restrict ourselves to episodes where only agricultural trade was liberalized, although emphasis in this survey is given to agricultural trade policies. Furthermore, given the difficulty of isolating the effects of trade policies alone, we will also consider the impact of other types of external shocks which have the effect of changing the relative prices of tradeable and non-tradeable goods. By examining the way in which households adjust to such external shocks, we can learn a great deal about how they would respond to sharp reductions in tariffs, or significant changes in a country’s international terms of trade engendered by multilateral trade liberalization.Poverty, rural development, agriculture, Food Security and Poverty, International Relations/Trade,

Commodity Price Volatility and Nutrition Vulnerability

In this paper we examine the impact of commodity price volatility on nutritional attainment of households at the nutritional poverty line in Bangladesh. We focus on the first two moments of the distribution of nutrition and consider the differential impacts across socio-economic groups within the country. We also examine the direction and magnitude of the shift in these moments as a result of implementation of special safeguards measures aimed at preventing import surges.price volatility, calories, vulnerability, food consumption, poverty, household data, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Research Methods/ Statistical Methods,

Economic and Poverty Impacts of Agricultural, Trade and Factor Market Reforms in China

Capitalizing on the most recent estimates of agricultural price distortions in China and in other countries, this paper assesses the economic and poverty impact of global and domestic trade reform in China. It also examines the interplay between the trade reforms and factor market reforms aimed at improving the allocation of labor within the Chinese economy. The results suggest that trade reforms in the rest of the world, land reform and hukou reform all serve to reduce poverty, while unilateral trade reforms result in a small poverty increase. Agricultural distortions are important factors in determining the distributional and poverty effects of trade reform packages, although their impacts on aggregate trade and welfare appear to be small. A comprehensive reform package which bundles the reforms in commodity and factor markets together may benefit all broad household groups in China.Distorted incentives, agricultural and trade policy reforms, national agricultural development, Agricultural and Food Policy, International Relations/Trade, F13, F14, Q17, Q18,

Poverty Vulnerability and Trade Policy: Are the Likely Impacts Discernable?

Trade policy reform prospects have generated debate about the impacts on poverty. Some critics assert that price changes induced by trade reform are minimal and may not be distinguishable from price fluctuations induced by other shocks to the global economy. This paper addresses this issue by developing an approach to assess whether poverty changes induced by trade reform can be statistically discernable, based on a comparison in the grains sector. Fluctuations in grains markets are implemented by incorporating stochastic simulations into a CGE model of the global economy. The resulting price distributions are inputted to a micro-simulation based on national household surveys. The conclusions are based on the comparison of the resulting poverty distributions from the weather-induced variability only, versus the combined effect of the latter and trade reform. Results indicate that, in this conservative approach of evaluating only the global grains markets, the short-run impacts on poverty of trade liberalization can not be distinguished from market volatility in some countries.International Relations/Trade,

The Poverty Impacts of Global Commodity Trade Liberalization

This paper examines the poverty impacts of global merchandise trade reform by looking at a wide range of developing countries in Africa, Asia and Latin America. Overall, we find that trade reform tends to reduce poverty primarily through the inclusion of agricultural components. The majority of our developing country sample experiences small poverty increases from non-agricultural reforms. We explore the relative poverty-friendliness of agricultural trade reforms in detail, examining the differential impacts on real after-tax factor returns of agricultural versus non-agricultural reforms. This analysis is extended to the distribution of households by looking at stratum-specific poverty changes. Our findings indicate that the more favorable impacts of agricultural reforms are driven by increased returns to peasant farm households’ labor as well as higher returns for unskilled wage labor. Finally, we examine the commodity-specific poverty impacts of trade reform for this sample of countries. We find that liberalization of food grains and other processed foods represent the largest contributions to poverty reduction. More specifically, it is tariff reform in these commodity markets that dominates the poverty increasing impacts of wealthy country subsidy removal.Distorted incentives, agricultural and trade policy reforms, national agricultural development, Agricultural and Food Policy, International Relations/Trade, F13, F14, Q17, Q18,

THE WTO DOHA DEVELOPMENT ROUND AND OECD AGRICULTURAL POLICY

A global CGE model featuring agricultural sector detail is used to assess WTO agricultural reform. Parametric uncertainty is considered with model results evaluated based on confidence intervals. We find that continued shift in domestic support to green box payments maintains farmer welfare while providing significant welfare gains to developing regions.International Relations/Trade,

Commodity price volatility and nutrition vulnerability:

"In this paper we examine the impact of commodity price volatility on calorie attainment and its variability for households at the nutritional poverty line in Bangladesh. We focus on the first two moments of the distribution of calorie consumption and consider the differential impacts across socioeconomic groups within the country. The framework developed is then used to examine the direction and magnitude of the shift in those moments as a result of implementation of a special safeguard mechanism aimed at preventing import surges." from authors' abstractGlobalization, Markets, Price volatility, Nutritional vulnerability, Calorie intake, household consumption, Computable general equilibrium (CGE), Model validation,

Predicting the poverty impacts of trade reform

An important area of research in recent years involves assessing the microeconomic implications of macro-level policies-particularly those related to international trade. While a wide range of research methodologies are available for assessing the microeconomic incidence of micro-policies, as well as for assessing the effect of macro-level policies on markets and broad groups of households, there is a gap when it comes to eliciting the disaggregated household and firm level effects of trade policies. Recent research addresses this knowledge gap and the present survey offers an overview of this literature. The preponderance of the evidence from the studies encompassed by this survey points to the dominance of earnings-side effects over consumption-side effects of trade reform. This is problematic, since household surveys are notable for their underreporting of income. From the perspective of the poor, it is the market for unskilled labor that is most important. The poverty effects of trade policy often hinge crucially on how well the increased demand for labor in one part of the economy is transmitted to the rest of the economy by way of increased wages, increased employment, or both. Further econometric research aimed at discriminating between competing factor mobility hypotheses is urgently needed.Health Economics&Finance,Environmental Economics&Policies,Economic Theory&Research,Labor Policies,Payment Systems&Infrastructure,Environmental Economics&Policies,Economic Theory&Research,Poverty Assessment,Achieving Shared Growth,Health Economics&Finance