Extending General Equilibrium to the Tariff Line: U.S. Dairy in the Doha Development Agenda

International Relations/Trade,

Extending General Equilibrium to the Tariff Line: U.S. Dairy in the DOHA Development Agenda

Market access has been at the core of eight negotiating rounds of the General Agreement on Tariffs and Trade (GATT). Yet, agricultural trade remains a heavily protected sector, characterized by higher tariffs relative to industrial goods, large tariff dispersions, numerous specific tariffs and systems of tariff-rate-quotas. This has made the analysis of trade liberalization a formidable task among policy analysts. Previous studies of agricultural trade liberalization have used partial or general equilibrium models of trade. However, each of these modeling strategies has their drawbacks. General equilibrium (GE) models have been criticized because they face serious aggregation issues and miss much of the policy detail that occurs at the tariff line. Partial equilibrium (PE) models on the other hand are often more disaggregated but lack internal consistency and have nothing to say about the economy-wide effects from trade reform. The purpose of this paper is threefold. One, we develop a methodology that combines PE and GE modeling techniques permitting us to extend GE to the tariff line. Two, we introduce a fully disaggregated U.S. dairy sector and compare PE and GE liberalization results from global dairy reform, thereby offering some insight into the potential errors implicit in current GE studies. Finally, we illustrate how our methodology allows for an explicit treatment of tariff rate quotas in the U.S. dairy sector on a bilateral basis for narrowly defined product lines.agricultural trade, mixed-complementarity problem, partial equilibrium, general equilibrium, Doha Development Agenda, WTO, International Relations/Trade, Livestock Production/Industries, F01, F17, Q17, Q18,

Growth, globalization, and gains from the Uruguay Round

Emphasizing the importance of evaluating the Uruguay Round in the context of a changing world economy, the authors base their projections on a model that incorporates certain economic shifts: 1) that the center of economic gravity will shift toward the South and toward Asia (a shift that is already under way and shows no signs of abating), and 2) that the pattern of comparative advantage will continue to change, with the East Asian economies gaining comparative advantage in the production of physical and human-capital-intensive products. The authors argue that these changes in the global economy significantly affect their analysis of the Uruguay round reforms, for two reasons. First, with the global distribution of trade and production shifting toward Asia, the deeper Uruguay Round cuts inthat region become more important, giving rise to a 17 percent increase in the proportionate welfare gain after implementation of tariff cuts. Second, without the Round, almost all of the bilateral quotas associated with the Multifibre Arrangement (MFA) would have become more binding and the resulting distortion would have been significantly greater. In this analysis, the global gain from MFA reform is 60 percent greater than it would have been without taking into account the effects of growth. Of course, procedures for implementation of the MFA reforms are more complex than they have conveyed for purposes of analysis. In practice, one must also consider the impact of accel quota growth under the Agreement on Textiles and Clothing. But even when the Agreement on Textiles and Clothing is implemented over the period for which projections were made, quota rents rise for many bilateral flows. This is a consequence both of shifts in comparative advantage toward the supplying countries and of simultaneous cuts in tariffs on textiles and clothing. The projections approach used here may be viewed as a logical extension of the growing econometric literature seeking to explain the determinants of economic growth through regression analysis. By offering a bridge between econometric evidence and computable general equilibrium modeling, the authors hope to combine the two approaches to help shed light on the interaction between trade reform and economic growth.Payment Systems&Infrastructure,Economic Theory&Research,Environmental Economics&Policies,Export Competitiveness,Globalization and Financial Integration,Environmental Economics&Policies,Trade and Regional Integration,Achieving Shared Growth,Economic Theory&Research,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT

Biofuels and their By-Products: Global Economic and Environmental Implications

The biofuel industry has been rapidly growing around the world in recent years. Several papers have used general equilibrium models and addressed the economy-wide and environmental consequences of producing biofuels at a large scale. They mainly argue that since biofuels are mostly produced from agricultural sources, their effects are largely felt in agricultural markets with major land use and environmental consequences. In this paper, we argue that virtually all of these studies have overstated the impact of liquid biofuels on agricultural markets due to the fact that they have ignored the role of by-products resulting from the production of biofuels. Feed by-products of the biofuel industry, such as Dried Distillers Grains with Solubles (DDGS) and biodiesel by-products (BDBP) such as soy and rapeseed meals, can be used in the livestock industry as substitutes for grains and oilseed meals used in this industry. Hence, their presence mitigates the price impacts of biofuel production on the livestock and food industries. The importance of incorporating by-products of biofuel production in economic models is well recognized by some partial equilibrium analyses of biofuel production. However, to date, this issue has not been tackled by those conducting CGE analysis of biofuels programs. Accordingly, this paper explicitly introduces DDGS and BDBP, the major by-products of grain based ethanol and biodiesel production processes, into a worldwide CGE model and analyzes the economic and environmental impacts of regional and international mandate policies designed to stimulate bioenergy production and use. We first explicitly introduce by-products of biofuel production into the GTAP-BIO database, originally developed by Taheripour et al. (2007). Then we explicitly bring in DDGS and BDBP into the Energy-Environmental version of the Global Trade Analysis Project (GTAP-E) model, originally developed by Burniaux and Truong (2002), and recently modified by McDougall and Golub (2007) and Birur, Hertel, and Tyner (2008). The structure of the GTAP-E model is redesigned to handle the production and consumption of biofuels and their by-products, in particular DDGS, across the world. Unlike many CGE models which are characterized by single product sectors, here grain based ethanol and DDGS jointly are produced by an industry, named EthanolC. The biodiesel industry also produces two products of biodiesel and BDBP jointly. This paper divides the world economy into 22 commodities, 20 industries, and 18 regions and then examines global impacts of the US Energy Independence and Security Act of 2007 and the European Union mandates for promoting biofuel production in the presence of by-products. We show that models with and without by-products demonstrate different portraits from the economic impacts of international biofuel mandates for the world economy in 2015. While both models demonstrate significant changes in the agricultural production pattern across the world, the model with by-products shows smaller changes in the production of cereal grains and larger changes for oilseeds products in the US and EU, and the reverse for Brazil. For example, the US production of cereal grains increases by 10.8% and 16.4% with and without by-products, respectively. The difference between these two numbers corresponds to 646 million bushels of corn. In the presence of by-products, prices change less due to the mandate policies. For example, the model with no by-products predicts that the price of cereal grains grows 22.7% in the US during the time period of 2006 to 2015. The corresponding number for the model with by-products is 14%. The model with no by-products predicts that the price of oilseeds increases by 62.5% in the EU during 2006-2015. In the presence of by-products, this price grows 56.4%. Finally, we show that incorporating DDGS into the model significantly changes the land use consequences of the biofuel mandate polices.Resource /Energy Economics and Policy, Environmental Economics and Policy,

Three-dimensional magnetic flux-closure patterns in mesoscopic Fe islands

We have investigated three-dimensional magnetization structures in numerous mesoscopic Fe/Mo(110) islands by means of x-ray magnetic circular dichroism combined with photoemission electron microscopy (XMCD-PEEM). The particles are epitaxial islands with an elongated hexagonal shape with length of up to 2.5 micrometer and thickness of up to 250 nm. The XMCD-PEEM studies reveal asymmetric magnetization distributions at the surface of these particles. Micromagnetic simulations are in excellent agreement with the observed magnetic structures and provide information on the internal structure of the magnetization which is not accessible in the experiment. It is shown that the magnetization is influenced mostly by the particle size and thickness rather than by the details of its shape. Hence, these hexagonal samples can be regarded as model systems for the study of the magnetization in thick, mesoscopic ferromagnets.Comment: 12 pages, 11 figure

General-Relativistic Thomas-Fermi model

A system of self-gravitating massive fermions is studied in the framework of the general-relativistic Thomas-Fermi model. We study the properties of the free energy functional and its relation to Einstein's field equations. A self-gravitating fermion gas we then describe by a set of Thomas-Fermi type self-consistency equations.Comment: 7 pages, LaTex, to appear in Gen. Rel. Gra

Thomas-Fermi-Dirac-von Weizsacker hydrodynamics in laterally modulated electronic systems

We have studied the collective plasma excitations of a two-dimensional electron gas with an arbitrary lateral charge-density modulation. The dynamics is formulated using a previously developed hydrodynamic theory based on the Thomas-Fermi-Dirac-von Weizsacker approximation. In this approach, both the equilibrium and dynamical properties of the periodically modulated electron gas are treated in a consistent fashion. We pay particular attention to the evolution of the collective excitations as the system undergoes the transition from the ideal two-dimensional limit to the highly-localized one-dimensional limit. We also calculate the power absorption in the long-wavelength limit to illustrate the effect of the modulation on the modes probed by far-infrared (FIR) transmission spectroscopy.Comment: 27 page Revtex file, 15 Postscript figure

Time-dependent screening of a positive charge distribution in metals: Excitons on an ultra-short time scale

Experiments determining the lifetime of excited electrons in crystalline copper reveal states which cannot be interpreted as Bloch states [S. Ogawa {\it et al.}, Phys. Rev. B {\bf 55}, 10869 (1997)]. In this article we propose a model which explains these states as transient excitonic states in metals. The physical background of transient excitons is the finite time a system needs to react to an external perturbation, in other words, the time which is needed to build up a polarization cloud. This process can be probed with modern ultra-short laser pulses. We calculate the time-dependent density-response function within the jellium model and for real Cu. From this knowledge it is possible within linear response theory to calculate the time needed to screen a positive charge distribution and -- on top of this -- to determine excitonic binding energies. Our results lead to the interpretation of the experimentally detected states as transient excitonic states.Comment: 24 pages, 9 figures, to appear in Phys. Rev. B, Nov. 15, 2000, issue 2