Publications

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  • A Short History of U.S. Agricultural Trade Negotiations

    AGES-8923, August 01, 1989

    The U.S. proposal to eliminate domestic farm subsidies worldwide, presented to the Uruguay Round of the General Agreement on Tariffs and Trade negotiations in 1987, is a significant break with past policies. Trade liberalization has been a U.S. goal since the Reciprocal Trade Agreements Act of 1934, but, until recently, the United States and many other nations have acted to preserve their own farm subsidies. In the 1980s, slower growth in international farm trade, the threat of trade wars, and higher subsidy costs have led to a reassessment of domestic as well as export subsidies and have created a climate favorable to eliminating subsidies.

  • Agricultural Export Programs: Background for 1995 Farm Legislation

    AER-716, June 01, 1995

    Since 1985, the United States has heavily supported agricultural exports with an array of programs. A central issue related to those programs is how best to support farm exports, and farm income, with lower price subsidies under the Uruguay Round Agreement of the General Agreement on Tariffs and Trade (GATT) and with U.S. budget constraints.

  • Exploring Linkages Among Agriculture, Trade, and the Environment: Issues for the Next Century

    AER-738, May 01, 1996

    Many trade and environment issues will confront agriculture over the next several years. This report provides an economic framework to better understand these issues and discusses prior empirical inquiries and findings. Four primary issues are addressed: (1) how will environmental policies affect agricultural trade?; (2) how will agricultural trade liberalization affect environmental quality?; (3) to what extent should there be international harmonization of environmental policies and product standards?; and (4) is there economic justification for using trade measures to protect the environment? This report demonstrates that basic economic paradigms can provide a basis for understanding how trade and the environment interact. The few empirical studies based on these concepts have found many of the linkages between trade and the environment to be weak or the effects small. Trade and environment issues remain important to monitor, however, because economic and environmental relationships and domestic and international policies are continually evolving, and decisionmakers need good information to confirm or disprove the numerous hypotheses that have surfaced in international discussions.

  • Bacterial Foodborne Disease: Medical Costs and Productivity Losses

    AER-741, August 01, 1996

    Microbial pathogens in food cause an estimated 6.5-33 million cases of human illness and up to 9,000 deaths in the United States each year. Over 40 different foodborne microbial pathogens, including fungi, viruses, parasites, and bacteria, are believed to cause human illnesses. For six bacterial pathogens, the costs of human illness are estimated to be $9.3-$12.9 billion annually. Of these costs, $2.9-$6.7 billion are attributed to foodborne bacteria. These estimates were developed to provide analytical support for USDA's Hazard Analysis and Critical Control Point (HACCP) systems rule for meat and poultry. (Note that the parasite Toxoplasma gondii is not included in this report.) To estimate medical costs and productivity losses, ERS uses four severity categories for acute illnesses: those who did not visit a physician, visited a physician, were hospitalized, or died prematurely. The lifetime consequences of chronic disease are included in the cost estimates for E. coli O157:H7 and fetal listeriosis.

  • APEC Agriculture and Trade: Asia-Pacific Economic Cooperation Region Buying More U.S. Consumer-Ready Food Products

    AER-734, September 11, 1996

    In fiscal 1995, more than 60 percent of U.S. farm exports, worth a record $33 billion, went to Asia-Pacific Economic Cooperation (APEC) forum members. Bulk exports showed the most dramatic growth, benefiting greatly from China's conversion from a net grain exporter into a major net importer. Chinese imports are projected to increase further over the long term. Continued trade liberalization throughout APEC, rapid economic growth in its developing economies, and limited arable land in China and East Asia will ensure continued growth in U.S. farm exports to APEC markets-especially meat for East Asia and grains for China and Southeast Asia.

  • U.S. Export Performance in Agricultural Markets

    TB-1854, February 01, 1997

    This report develops a method, called trade-share accounting (TSA), that establishes the relationship between trade structure and market share. U.S. market shares are commonly used as measures of export performance in international markets and are frequently cited statistics in USDA publications. A drop in the U.S. market share is not necessarily associated with displaced U.S. sales from competing suppliers. Accurate interpretation of change in the agricultural market share requires understanding of the changing structure of world trade.

  • Agricultural Baseline Projections to 2005, Reflecting the 1996 Farm Act

    WAOB-971, April 23, 1997

    This report provides long-run baseline projections for the agricultural sector through 2005 that incorporate provisions of the Federal Agriculture Improvement and Reform Act of 1996 (1996 Farm Act). The baseline assumes that the new farm legislation remains in effect through 2005. Projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income and food prices. Generally favorable global economic growth is projected in the baseline which, combined with liberalized trade associated with both the GATT agreement and unilateral policy reforms, supports strong growth in global trade and U.S. agricultural exports. Greater market orientation in the domestic agricultural sector under the 1996 Farm Act puts U.S. farmers in a favorable position for competing in the global marketplace. A tightening of the balance between productive capacity and demands results in rising nominal market prices, increasing farm income, and stability in the financial condition of the agricultural sector. However, management of risk will be important for farmers. With the reduced role of the Government in the sector under the 1996 Farm Act, farmers in general face greater risk of income volatility due to price variation, reflecting market price variability more directly. Consumer food prices are projected to continue a long term trend of rising less than the general inflation rate. The baseline projections presented are one representative scenario for the agricultural sector through the middle of the next decade, assuming no shocks and based on specific assumptions regarding macroeconomic conditions, policy, weather, and international developments. As such, the baseline provides a point of departure for discussion of alternative farm sector outcomes that could result under different assumptions. The projections in this report were prepared in October through December 1996, reflecting a composite of model results and judgmental analysis.

  • The Impact of China and Taiwan Joining the World Trade Organization on U.S. and World Agricultural Trade: A Computable General Equilibrium Analysis

    TB-1858, May 01, 1997

    This report quantifies the potential impact of China's and Taiwan's accession to the World Trade Organization on U.S. and world agricultural trade by means of a 12-region, 14-sector computable general equilibrium model for world trade and production. Integrating China and Taiwan into the global trading system could increase total world exports by as much as $78 billion (1992 constant prices), total world imports by $94 billion, and world real consumption by $45 billion annually, as well as induce more competition on labor-intensive products and reduce their prices.

  • U.S. Agricultural Growth and Productivity: An Economywide Perspective

    AER-758, January 01, 1998

    Growth of U.S. agriculture is dependent on increases in productivity, three-fourths of which is accounted for by public investment in agricultural research and development (R&D) and infrastructure, according to this research. Productivity growth in U.S. agriculture benefits consumers by putting downward pressure on real primary and processed food prices. Moreover, maintaining export growth in international markets relies on relative productivity growth against major competitors. Public investments in agricultural R&D have stagnated since the mid-1970's, raising questions about sustained productivity growth in U.S. agriculture.

  • USDA Agricultural Baseline Projections to 2007

    WAOB-981, February 02, 1998

    This report provides long-run baseline projections for the agricultural sector through 2007. Projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income and food prices. The baseline assumes no shocks and is based on specific assumptions regarding macroeconomic conditions, policy, weather, and international developments. The projections assume that current agricultural law of the 1996 Farm Act remains in effect throughout the baseline. Also, the baseline assumes that the Southeast Asian currency devaluations and related economic slowdowns are confined to that region, affecting growth through 2000, with policy reforms and international financial support leading to a recovery of economic growth in subsequent years. Despite the near-term slowdown in Southeast Asian economies, generally favorable global economic growth is projected in the baseline which, combined with liberalized trade associated with both the GATT agreement and unilateral policy reforms, supports strong growth in global trade and U.S. agricultural exports. Greater market orientation in the domestic agricultural sector under the 1996 Farm Act puts U.S. farmers in a favorable position for competing in the global marketplace. A tightening of the balance between productive capacity and projected demands results in rising nominal market prices, increasing farm income, and stability in the financial condition of the agricultural sector. Management of risk will be important for farmers, reflecting the reduced role of the Government in the sector under the 1996 Farm Act. Consumer food prices are projected to continue a long term trend of rising less than the general inflation rate. The baseline projections presented are one representative scenario for the agricultural sector for the next decade. As such, the baseline provides a point of departure for discussion of alternative farm sector outcomes that could result under different assumptions. The projections in this report were prepared in October through December 1997, reflecting a composite of model results and judgmental analysis.

  • U.S. Foreign Direct Investment in the Western Hemisphere Processed Food Industry

    AER-760, March 01, 1998

    Foreign direct investment (FDI) has become the leading means for U.S. processed food companies to participate in international markets. Affiliates of U.S.-owned food processing companies had $30 billion in sales throughout the Western Hemisphere in 1995, nearly 4 times the level of processed food exports. This report puts U.S. foreign direct investment and trade in processed foods to the region into global perspective, and finds evidence that, in the aggregate for the 1990's, trade and FDI are complementary--not competitive--means of accessing international food markets. Incomes have grown sufficiently in most countries to support growth in affiliate sales and U.S. exports, indicating a strong demand for a wide variety of processed foods.

  • The Food and Fiber System: Contributing to the U.S. and World Economies

    AIB-742, August 03, 1998

    Even though farming accounts for only about 1 percent of the total national workforce, it is at the core of the food and fiber system. The system is one of the largest sectors in the U.S. economy, and is comprised of industries related to farming, including feed, seed, fertilizer, machinery, food processing, manufacturing, and exporting. The interrelationships among the sectors of the food and fiber system and the U.S. and world economies are many and complex. As a result, U.S. and world policies and economic factors--such as interest and inflation rates--play a critical role in everything from the cost and availability of farm credit to the demand for farm products at home and abroad. The farm crisis of the 1980's illustrates how specific economic events can impact the food and fiber system. In addition, long-term changes in the system have occurred in response to shifts in consumer incomes, demographics, lifestyles, and perceptions of health and diet.

  • Regional Trade Agreements and U.S. Agriculture: An Overview

    AIB-745, October 01, 1998

    Please also see Regional Trade Agreements and U.S. Agriculture. This report summarizes the implications of regionalism for the United States, focusing on the effects of major RTA's on U.S. agriculture. Regional trade agreements (RTA's) have become a fixture in the global trade arena. Their advocates contend that RTA's can serve as building blocks for multilateral trade liberalization. Their opponents argue that these trade pacts will divert trade from more efficient nonmember producing countries. U.S. agriculture can benefit from participating in RTA's and may lose when it does not. Agriculture is the source of most potential U.S. gains from RTA's.

  • Regional Trade Agreements and U.S. Agriculture

    AER-771, November 02, 1998

    Regional trade agreements (RTA's) have become a fixture in the global trade arena. Their advocates contend that RTA's can serve as building blocks for multilateral trade liberalization. Their opponents argue that these trade pacts will divert trade from more efficient nonmember producing countries. U.S. agriculture can benefit from participating in RTA's and may lose when it does not. Agriculture is the source of most potential U.S. gains from RTA's. While the United States, as a global trader with diverse trade partners, can gain potentially more from global free trade than from RTA's, many recent RTA's have been more comprehensive in their liberalization of agricultural trade than the Uruguay Round. A strong multilateral process can help ensure that RTA's are trade creating, rather than protectionist. (Please also see Regional Trade Agreements and U.S. Agriculture: An Overview).

  • A Framework for Analyzing Technical Trade Barriers in Agricultural Markets

    TB-1876, March 01, 1999

    Technical trade barriers are increasingly important in the international trade of agricultural products. Designing technical trade measures that can satisfy the growing demand for food safety, product differentiation, environmental amenities, and product information at the lowest cost to the consumer and to the international trading system requires an understanding of the complex economics of regulatory import barriers. This report proposes a definition and classification scheme to frame discussion and evaluation of such measures. Open-economy models that complement the classification scheme are developed graphically to highlight the basic elements that affect the economic impacts of changes in technical trade barriers.

  • Introduction to State Trading in Agriculture

    AER-783, November 01, 1999

    State trading enterprises are far more prevalent in agriculture than in other industries. STEs account for significant shares of world trade in grains, dairy products, and sugar. Attempts to measure the impacts of STEs and their activities on international agricultural trade have just begun. This report presents a classification scheme for STEs that provides a qualitative index of an STE's ability to control domestic markets and its ability to influence external trade. We applied the classification scheme to nine major agricultural STEs and concluded that only a few of them are able to affect international trade substantially. Recent policy reforms have eroded some of the nine's powers to influence trade.

  • The Road Ahead: Agricultural Policy Reform in the WTO--Summary Report

    AER-797, January 25, 2001

    Agricultural trade barriers and producer subsidies inflict real costs, both on the countries that use these policies and on their trade partners. Trade barriers lower demand for trade partners' products, domestic subsidies can induce an oversupply of agricultural products which depresses world prices, and export subsidies create increased competition for producers in other countries. Eliminating global agricultural policy distortions would result in an annual world welfare gain of $56 billion. High protection for agricultural commodities in the form of tariffs continues to be the major factor restricting world trade. In 2000, World Trade Organization (WTO) members continued global negotiations on agricultural policy reform. To help policymakers and others realize what is at stake in the global agricultural negotiations, this report quantifies the costs of global agricultural distortions and the potential benefits of their full elimination. It also analyzes the effects on U.S. and world agriculture if only partial reform is achieved in liberalizing tariffs, tariff-rate quotas (limits on imported goods), domestic support, and export subsidies.

  • USDA Agricultural Baseline Projections to 2010

    WAOB-011, February 22, 2001

    This report provides long-run (10-year) baseline projections for the agricultural sector through 2010. Projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income and food prices.

  • Implications of Trade Liberalization on Food Security of Low-Income Countries

    AIB-765-5, April 26, 2001

    This issue paper discusses how agricultural trade liberalization will affect low-income, food-insecure countries. Most countries and regions show modest reductions in food insecurity from liberalization due to domestic supply response that reacts to high prices.

  • Agricultural Policy Reform in the WTO--The Road Ahead

    AER-802, May 15, 2001

    Agricultural trade barriers and producer subsidies inflict real costs, both on the countries that use these policies and on their trade partners. This report quantifies the costs of global agricultural distortions and the potential benefits of their full elimination. The report concludes that eliminating global agricultural policy distortions would result in an annual world welfare gain of $56 billion. The report also analyzes the effects on U.S. and world agriculture if only partial reform is achieved in liberalizing tariffs, tariff-rate quotas (limits on imported goods), domestic support, and export subsidies.