Progress 03/01/14 to 08/31/16
Outputs
Target Audience:we have the same targeted academic and policy-making audiences as in previous period, in agricultural and international economics with interest in EU-US trade in agricultural and food products. Changes/Problems:
Nothing Reported
What opportunities for training and professional development has the project provided?
Nothing Reported
How have the results been disseminated to communities of interest?Results were presented to two major international conferences, the annual Global Tradee Analysis conference in Melbourbe, Australa, in June 2015, and the 2015 International Conference of Agricultural Economists in Rome, Italy, in August 2015. in 2016, we presented results at several conferences (2016 AAEA annual meetings, and 1 presentation planned at the 2017 AARES annual meetings in Australia in February 2017). These new investigations are available online via agecon search, Google Scholar andother online repositories. What do you plan to do during the next reporting period to accomplish the goals?
Nothing Reported
Impacts
What was accomplished under these goals?
Impact statement Situation: the issue addressed is the impact on welfare and trade of a potential bilateral trade agreement between the EU and the US. The research mostly impacts other researchers and policy makers and analysts who can use our analyses and results to make more informed decisions with a better understanding of the consequences of a TTIP agreement. The presumably value the information for that purpose. The project had 3 major initiatives, one looking at the impact of such agreement on the bio-economy of the 2 countries and associated markets. A second major effort was to analyze the impact of pesticide residues regulation on trade of the two countries and see what kind of policies could allow to reduce barriers created by these policies using an economteric model. The 3d one developed a comprehensive CGE model and analyzed the combined effects of tariffs, TRQs, and non tariffs measures on the two economies. Results/impact: Stakeholders for this project are policy makers/analysts and researchers. They will benefit from the new knowledge created and dissiminated with our conference presentations, working papers posted online and a forthcoming journal article). Broader outcomes are difficult to assess and are speculative in nature for social sciences research. Here is a conjectural impact. It is possible that some of the knowldge created by the project becomes instrumental in some big component of TTIP, for example sugar imports in the US. A TTIP without special treatment for sugar would open sugar trade substantially and most US consumers and users of sugar would benefit immensely from such outcome. 1. Assess the impact of a potential EU-US free trade agreement (FTA) on respective agricultural, food and bio-energy markets, trade, and welfare. In 2015, we presented results on bio-energy markets as well as grains, oilseeds and sweetener markets. We presented our results to two international academic audiences in Australia and Rome in 2015. Our report has been cited in the emerging literature on TTIP, and our report has been widely diffused (more than 50 downloads and more than 100 abstract views). Our results show that the US sugar industry and EU bio-energy sectors would be under pressure under a TTIP agreement and that EU sugar and US bio-energy sectors would benefit from such TTIP agreement with expanded trade opportunities for the winners and reduced output for the losers. in 2016, we completed several analyses. One analysis led by David Orden built a large model to assess tariffs, TRQs, and nontariff barriers distorting international trade between the EU and the US. Beghin and Xiong, led another investigation of the effects on some specific nontariff measures between the EU and the US, using some econometric techniques. Results of both studies reveal the importance of nontariff measures such as quality standards for food safety in trade impediments between the EU and the US. the two analyses also show that these policies are hard to identify properly and their effects are challenging to measure. 2. Assess and decompose the impact of various policy components in the agreement (tariffs, two-tier tariffs in Tariff Rate Quotas (TRQs), export subsidies/credit guarantees, and possible exceptions for sensitive products) to inform the policy formation process. The analysis undertaken and disseminated in 2015 focused on taxes and tariff rate quotas at the border. Sugar in the US and bio-energy in the EU are likely to be declared sensitive products/sectors and the negative impact of a TTIP on these sectors will be mitigated by longer transition periods if and when a new agreement is implemented. In 2016, we decomposed the impact of these various policies in our two investigations. The investigation led by Orden looked at the impact of tariffs, TRQs, and aggregate estimates of Nontariif barriersfor large agricultural and food sectors. The investigation of Beghin and Xiong looks at tariffs and some specific nontariff measures (pesticide residue maximum limits in agriicultural products). Both taxes at the border and nontariff measures are important, and their removal would induce welafre and trade gains that are significant. 3. Assess non-tariff measures (NTMs) for which the negotiations might lead directly (in the text of the FTA) or indirectly (via subsequent technical collaboration and dispute settlement) to increased harmonization or equivalence recognition that would facilitate trade. With respect to objective 3, in 2015, we completed a new analysis of the impact of phytosanitary regulations in agro-food markets. We find that the EU has more stringent phyto-sanitary regulations than the US does. Harmonization of these SPS regulations would be difficult to accomplished as the EU enforces standards that exceed international ones. Hence we point to difficulties in the realm of phytosanitary policies with a potential TTIP agreement. As explained in objective 2 in 2016, we have made great progress at identifying the impact of NTMs on trade and welfare. The work by Beghin and Xiong also looked at 2 scenarios to harmonize and or use reciprocity in NTM policies and shows that export increase would be significant for both countries. Nontariff measure changes are hard to negotiate because of different approaches to food safety and food regulation in the EU and US. The former tends to have more stringent policies than the US. 4. Contribute to the academic field of international trade on the combined analysis of tariff-like and NTM policies using an integrated analytical framework parameterizing a large set of tariff-like border and domestic support policies and quantifiable NTMs and policies acting like standards. With respect to objective 4, in 2015 we integrated a combined analysis of taxes at the border with a tax equivalent to other trade cost created by nontariff measures and we found that a reduction of these non-tariff measure (NTM)-related trade costs would increase import penetration in the EU. The 2 investigations completed in 2016 (see publications for conference presentation) do just that, they incorporate conventional tariff policies and non tariff measures and decompose their individual effects on the analyzed sectors and markets.
Publications
- Type:
Journal Articles
Status:
Accepted
Year Published:
2017
Citation:
Beghin, John C., Jean-Christophe Bureau, and Alexandre Gohin. "The impact of an EU-US Transatlantic Trade and Investment Partnership agreement on biofuel and feedstock markets." Forthcoming in Journal of Agricultural Economics.
- Type:
Conference Papers and Presentations
Status:
Submitted
Year Published:
2016
Citation:
Xiong, Bo, and John Beghin. TTIP and agricultural trade: The case of tariff elimination and pesticide policy cooperation. Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University, 2016. Presented at the 2016 AAEA annual meetings,Boston.
- Type:
Conference Papers and Presentations
Status:
Submitted
Year Published:
2016
Citation:
Cororaton, Caesar B., and David Orden. "GII Working Paper No. 2016-1 Preliminary Report: Potential Economic Effects of the Reduction in Trade Barriers in the Transatlantic Trade and Investment Partnership." (2016).Presented at the 2016 AAEA annual meetings, Boston
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Progress 03/01/15 to 02/29/16
Outputs
Target Audience:We have two targeted audiences: the agricultural and international economics academic audience, and policy makers/advisors who guide the policy formulation process in Congress and government such as federal governmental agencies. Changes/Problems:The delays encountered in year 1 have been overcome and we are completing the investigation. What opportunities for training and professional development has the project provided?
Nothing Reported
How have the results been disseminated to communities of interest?Results were presented to two major international conferences, the annual Global Tradee Analysis conference in Melbourbe, Australa, in June 2015, and the 2015 International Conference of Agricultural Economists in Rome, Italy, in August 2015. Our reports and presentation slides are available online and have been downlaoded about 50 times in 2015 and abstracts views are over 100 for 2015. What do you plan to do during the next reporting period to accomplish the goals?We have completed the tariff and TRQ analysis for all agro-food sectors and we also have completed the phyto-sanitary analysis. We are in the process of writing 2 major reports to diffuse and disseminate these new results. A paper presentation has been submitted to the 2016 Agricultural and Applied Economics Association for presentation this summer 2016 at the annual conference.
Impacts
What was accomplished under these goals?
The long-term goal of this project is to assess the competitiveness and prosperity of US EU agricultural and food industries in the context of the economic and trade integration of the two regions (EU-27 and North America). The project provides and propagates important new knowledge to the policy debate regarding a potential US-EU Transatlantic Trade and Investment Partnership (TTIP) agreement by providing a quantitative assessment of the likely consequence of a US-EU TTIP agreement. The project influences the public policy debate by providing estimated effects of policy changes which would come about with a TTIP. Objective 1. Assess the impact of a potential EU-US free trade agreement (FTA) on respective agricultural, food and bio-energy markets, trade, and welfare. In 2015, we have presented results on bio-energy markets as well as grains, oilseeds and sweetener markets. We presented our results to two international academic audiences in Australia and Rome in 2015. Our report has been cited in the emerging literature on TTIP, and our report has been widely diffused (more than 50 downloads and more than 100 abstract views). Our results show that the US sugar industry and EU bio-energy sectors would be under pressure under a TTIP agreement and that EU sugar and US bio-energy sectors would benefit from such TTIP agreement with expanded trade opportunities for the winners and reduced output for the losers. Objective 2. Assess and decompose the impact of various policy components in the agreement (tariffs, two-tier tariffs in Tariff Rate Quotas (TRQs), export subsidies/credit guarantees, and possible exceptions for sensitive products) to inform the policy formation process. This analysis undertaken and disseminated in 2015 focuses on taxes and tariff rate quotas at the border. Sugar in the US and bio-energy in the EU are likely to be declared sensitive products/sectors and the negative impact of a TTIP on these sectors will be mitigated by longer transition periods if and when a new agreement is implemented. Objective 3. Assess non-tariff measures (NTMs) for which the negotiations might lead directly (in the text of the FTA) or indirectly (via subsequent technical collaboration and dispute settlement) to increased harmonization or equivalence recognition that would facilitate trade. With respect to objective 3, we have completed a new analysis of the impact of phytosanitary regulations in agro-food markets. We find that the EU has more stringent phyto-sanitary regulations than the US does. Harmonization of these SPS regulations would be difficult to accomplished as the EU enforces standards that exceed international ones. Hence we point to difficulties in the realm of phytosanitary policies with a potential TTIP agreement. Objective 4. Contribute to the academic field of international trade on the combined analysis of tariff-like and NTM policies using an integrated analytical framework parameterizing a large set of tariff-like border and domestic support policies and quantifiable NTMs and policies acting like standards. With respect to objective 4, we integrated a combined analysis of taxes at the border with a tax equivalent to other trade cost created by nontariff measures and we found that a reduction of these non-tariff measure (NTM)-related trade costs would increase import penetration in the EU.
Publications
- Type:
Conference Papers and Presentations
Status:
Other
Year Published:
2015
Citation:
The impact of an EU-US Transatlantic Trade and Investment Partnership Agreement on Biofuel and Feedstock Markets (#4580). Presentation at the 18th Annual Conference on Global Economic Analysis, in Melbourne Australia, June 17-19, 2015.
- Type:
Conference Papers and Presentations
Status:
Other
Year Published:
2015
Citation:
The impact of an EU-US Transatlantic Trade and Investment Partnership Agreement on Biofuel and Feedstock Markets. Author(s): Beghin, John; Bureau, Jean Christophe; Gohin, Alexandre, the 29th International Conference of Agricultural Economists, Rome, August 2015.
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Progress 03/01/14 to 02/28/15
Outputs
Target Audience:The targeted audience is the academic and policy-making audience attending academic and policy conferences such as agricultural economics academic conferences, the International Agricultural Trade Research Consortium and academic seminar series. A paper was completed on the impact of a potential TTIP agreement between the US and the EU with a focus on biofuel markets and associated feedstock markets (corn, other grains, sugar crops, oilseed and vegetable oil). The paper was presented at the annual IATRC annual meetings in San Diego in December 2014 and at several academic workshops. A working paper is available on the internet and is reaching a wide audience. Changes/Problems:We had major problems identifying and building the panel data base on NTMs, which is necessary to undertake the econometric analysis. This delay has been unfortunate and we have requested a no-cost extension of the data completion as a necessary step for the rest of the project. We hope we can move on with a dataset somewhat less general and complete on the NTM coverage than we had hoped but that is workable. What opportunities for training and professional development has the project provided?
Nothing Reported
How have the results been disseminated to communities of interest?The results have been disseminated to our targeted audiences. We have presented the paper and research results in several academic and policy venues (conference, workshops, on the web), and the paper has been downloaded 22 times in the first 2 months it was available on the internet (late in 2014). What do you plan to do during the next reporting period to accomplish the goals?We will go on with the data collection effort on NonTariif Measures (NTM) and undertake an econometric investigation of NTM's impact on bilateral trade in agricultural and food products. These estimates will be used in a trade model to simulate the impact of NTMs on the bilateral trade between the EU and the US and see how their coordinations can help reduce the trade effects of these NTMs. The quantitative trade model used for the analysis of biofuel markets will be extended to other food markets (mainly dairy and meat) to extend the analysis of the reduction in tariffs and Tariff Rate Quotas (TRQs) affecting meat and dairy markets. The extended model will also be used to run a scenario on trade costs created by non tariff measures affecting these markets. The working paper issued in late 2014 will be submitted to a refereed journal for publication.
Impacts
What was accomplished under these goals?
This past year, we have assessed the impact of a potential Transatlantic Trade and Investment Partnership (TTIP) bilateral free trade agreement on the EU and US bio-economies (feedstock, biofuels, by-products, and related competing crops) and major trade partners in these markets. The analysis develops a multi-market model that incorporates bilateral trade flows (US to EU, EU to US, and similarly with third countries) and is calibrated to Organisation for Economic Co-operation and Development (OECD)-Food and Agriculture Organization (FAO) baseline for 2013-2022 to account for recent policy decisions. The major policy reforms from a TTIP involve tariff and Tariff-Rate Quota (TRQ) liberalization and their direct contractionary impact on US sugar supply, EU biofuel production, and indirect negative effect on US High fructose corn syrup (HFCS) production. EU sugar and isoglucose productions expand along with US ethanol and biodiesel and oilseed crushing. EU sugar would flow to the US, US biofuels and vegetable oil to the EU. We further quantify nontariff measures (NTM) affecting these trade flows between the EU and the US. EU oilseed production contracts, and EU crushing expands with improving crushing margins following reduced NTM frictions. Our analysis reveals limited net welfare gains with most net benefits reaped by Brazil and not the two trading partners of the TTIP. We also started a data collection effort on nontariif measures (NTM) but this effort is going slow because of difficulties in finding panel data (for several years), which is a necessary step for an econometric investigation of NTM's impact on bilateral trade in agricultural and food products.
Publications
- Type:
Other
Status:
Other
Year Published:
2014
Citation:
Beghin, John C., Jean-Christophe Bureau, and Alexandre Gohin. The impact of an EU-US Transatlantic Trade and Investment Partnership Agreement on Biofuel and Feedstock Markets. No. 38241. 2014, also presented at the 2014 IATRC meetings in San Diego, December 2014.
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