International Section Track Sessions

This session examines the impacts of free trade agreements (FTA) on major topics included in U.S. FTAs: agriculture, the environment and labor. These are included in U.S. agreements with and, while they are contentious, labor and the environment are required under the 2002 Trade Promotion Act. They became very important issues during the NAFTA negotiations and have had significant impacts in Mexico, the ten FTAs approved following NAFTA and are important in the three (Colombia, Panama and South Korea) approved by Congress in 2011. Agricultural trade, both imports and exports, have increased in volume and value and are important to the U.S trade position, producing a surplus in contrast to the deficits in most other sectors. The paper on the agricultural impacts examines how FTAs impacted this balance, which had declined in the early years of this century, but have rebounded in recent years. Labor issues have been a contentious topic in several FTA negotiations and was an important roadblock to approval of the U.S.-Colombia FTA. Unions and others have sought assurances that unfair labor practices will not give an unfair advantage to trading partners. Environmental issues were critical in the NAFTA negotiations as there was concern that low environmental standards and weak enforcement would produce a race to the bottom, with firms locating in Mexico to avoid complying with stricter requirements in the U.S. and Canada. The environmental provisions in NAFTA and subsequent agreements address this issue and also include cooperative arrangements to enable trading partners to improve the environment.

The food and financial crises of 2008 and 2009 led to social problems and unrest in scores of countries, and have added millions of people to the number of hungry and undernourished in the world while reversing progress towards the Millennium Development Goals hunger target. The economic crisis that hit hardest in 2009 severely depressed economic growth and the purchasing power of consumers; and the recovery from this recession has been very slow in many countries. Now in 2011 food prices have risen again and could remain high for a longer period than was the case in 2008. The economic shocks and the added impact of another food price surge in 2010 and 2011 are more severe for low-income populations, especially in food-deficit areas, and once again raise serious food security issues. One source of promise in the coming years is the underutilized potential of the grain growing areas of Kazakhstan, Russia and Ukraine (KRU), which have increased their exports substantially in recent years. The net imports of Kazakhstan, the Russian Federation and Ukraine once accounted for about 7 percent of global grain imports (from 1987 to 1990), but net exports of these three countries accounted for more than 12 percent of global grain exports from 2005 to 2008. This hopeful sign is offset by the policy reactions of this region, which have sometimes restricted exports just when global markets need them most. Thus there is both promise and concern about the future role of this region as a reliable supplier in the face growing world demand for food. This session is designed to bring a comprehensive perspective to these related issues by having a panel of experts on Europe and Central Asia, global food security and the outlook for food and commodity markets. The presentations will provide an overview of the emerging production and export progress and prospects in each of the three countries. Each will explore more generally the past policy reactions to prices surges and the impacts on food security in other countries and how such policies may evolve in the future.

Natural hazards can have significant impacts on the long term development of regions and countries. Application of economics to assess the relative benefits of adaptation responses to these potential hazards have progressed but still require more research. Given the significance of the problem for food security and development this area of research and application is highly relevant to policy and decision makers. The purpose of this session is to explore how agricultural economics can be used to pro-actively estimate the potential impact of natural hazards and the relative value of alternative adaptation options for the agricultural sector ex ante to support adaptation and disaster risk reduction.

In this session, we focus on demand and international trade issues in China. As a major market, structural changes in Chinese preferences are particularly important to exporting countries. As a major exporter, China is also affected by changing factors in destination markets such as the United States. The following topics are considered for this session: (1) Given the overall scale of the Chinese economy, changes in cotton textile consumption could have a profound impact on world textile and cotton markets. We examine cotton textile demand through a household survey conducted by Cotton Council International to estimate elasticities of demand for textile products. Using forecasted changes in demographics and income, we project cotton textile demand and global cotton prices. (2) The market for imported wine has been developing rapidly in China due to an expanding middle class, rising incomes, a growing interest in western lifestyle and tastes, and better wine education. We assess the importance of country of origin in determining wine preferences and further assess how preferences have structurally changed over time. (3) Income growth in urban areas has significantly increased expenditures on foods consumed away from home in China. We estimate expenditure elasticities for total quantities of 9 commodity groups using a complete demand system, while accounting for censored data and the effects of food away from home expenditures on these same commodities. (4) About 25% of U.S. aquaculture imports originated from China. Highly publicized incidents of food contamination and adulteration pose new challenges for consumers and food safety regulators. We focus on U.S. imports of Chinese shrimp and tilapia to evaluate consumer willingness-to-pay for enhanced food safety, use of antibiotics, and eco-friendly environmental practices used in production

In 2011, USDA/FDA jointly issued a new set of dietary goals and nutrition guidelines. The goal of these Dietary Guidelines for Americans 2010 is to substantially reduce intake of calories and fats as part of the fight against obesity. Will these Dietary Guidelines be any more effective at changing food consumption patterns and reducing obesity than the previous guidelines? If so, what impacts would there be on the U.S. agriculture sector, and on food processing and retailing?

The C-FARE panel on Agricultural Development is exploring frontier issues on topics related to (a) foreign assistance and food security, (b) domestic and trade policies as they affect development, and (c) impact assessment of agricultural development interventions. This International Track session will include presentations by panel members on reforms to foreign assistance including aid for improved humanitarian outcomes, economics of input subsidies to agriculture in Sub Saharan Africa, adaptation to climate change under uncertainty, and methods for measuring impacts of interventions affecting agricultural productivity, poverty reduction, nutrition, gender equity, health and environment. The discussion that follows the panel presentations will serve to identify related issues with respect to the three main topics above, and will provide feedback to the C-FARE Development Panel as it prepares additional materials for policy makers.

This session focuses on the role of China and other developing countries in high global food prices and global food price volatility, and the impacts of high prices and price volatility on China and other developing countries. Global food prices have been highly volatile during the past five years, with prices during 2007-2008 and in 2011 significantly above long-term averages. China, as a major player in global agricultural markets and home to approximately one-fifth of the world's population, is one of the most important countries to consider when examining the current global food price environment. The topics to be discussed in this session (with presenters listed in parentheses) include: (1) the impacts of Chinese domestic and international agricultural trade policies on global food prices and price volatility, and the role that Chinese agricultural policies could play in reducing price volatility (Shenggen Fan); (2) the consequences of high food prices in China for smallholder agricultural production, poverty alleviation, and China's international agricultural trade (Scott Rozelle); (3) the effects of high food prices on poverty in developing countries, the resulting incentives for policy makers to adopt policies to insulate their markets against changes in international prices, and the effectiveness of these policies in stabilizing domestic prices (Will Martin); and (4) as China continues its economic development, the prospect that its agricultural policies could become similar to those of other middle- and high-income Asian countries, where agriculture is heavily protected and inefficient, resulting in less food self-sufficiency and large agricultural imports (Keijiro Otsuka). The four presenters in this session are well-known for their expertise on global food prices, food price volatility, and China, and they will bring a range of economic modeling tools to bear in their presentations.

Developing countries are expected to be the main source of the projected growth in global food demand and trade in the future. Research by IATRC members and others suggests that one reason is the greater sensitivity of food spending in developing countries to income growth than in developed countries. Moreover, more supplying regions in developing countries seem to be integrating with world markets. Policy makers think ahead to what world agricultural trade and trade policy would look like in 5, 10, or more years if current trends in macroeconomic and market integration continue. Key questions include regional integration in the developing world, “south-south” trade agreements, and expectations about macroeconomic performance in coming decades and its impacts on both supply and demand. Researchers are asked to consider a future in which the leading developing countries take further strides forward, and a host of other developing countries that have only experienced initial steps forward at present press on towards greater market development, integration with world markets, and trade. We focus on four avenues of research. (1) Emerging market food demand is explored in terms of the relationships between prices, income, and food expenditures in low and middle income countries using ICP data from the World Bank. (2) A supply chain approach is used to assess the mechanics for moving agricultural commodities or other goods from place to place in emerging markets, and from agent to agent, now and in the future. (3) Broad trends in domestic and trade-related agricultural policy will be summarized, using the case of fast-growing China to explore the impacts on domestic market balances and trade. (4) The impact of bilateral and multilateral agreements on international trade and the emerging economies.