IDEAS home Printed from https://ideas.repec.org/a/ags/joaaec/123786.html
   My bibliography  Save this article

Do U.S. Cotton Subsidies Affect Competing Exporters? An Analysis of Import Demand in China

Author

Listed:
  • Muhammad, Andrew
  • McPhail, Lihong Lu
  • Kiawu, James

Abstract

We estimate the demand for imported cotton in China and assess the competitiveness of cotton-exporting countries. Given the assertion that developing countries are negatively affected by U.S. cotton subsidies, our focus is the price competition between the United States and competing exporters (Benin, Burkina Faso, Chad, Mali, India, and Uzbekistan). We further project how U.S. programs affect China’s imports by country. Results indicate that if U.S. subsidies make other exporting countries worse off, this effect is lessened when global prices respond accordingly. If subsidies are eliminated, China’s cotton imports may not fully recover from the temporary spike in global prices.

Suggested Citation

  • Muhammad, Andrew & McPhail, Lihong Lu & Kiawu, James, 2012. "Do U.S. Cotton Subsidies Affect Competing Exporters? An Analysis of Import Demand in China," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(2), pages 1-15, May.
    • Handle: RePEc:ags:joaaec:123786
    DOI: 10.22004/ag.econ.123786
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/123786/files/jaae471.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.123786?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. George C. Davis, 1997. "Product Aggregation Bias as a Specification Error in Demand Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(1), pages 100-109.
    2. Stephen MacDonald & Suwen Pan & Agapi Somwaru & Francis Tuan, 2010. "China's role in world cotton and textile markets: a joint computable general equilibrium/partial equilibrium approach," Applied Economics, Taylor & Francis Journals, vol. 42(7), pages 875-885.
    3. Kym Anderson & Ernesto Valenzuela & Lee Ann Jackson, 2008. "Recent and Prospective Adoption of Genetically Modified Cotton: A Global Computable General Equilibrium Analysis of Economic Impacts," Economic Development and Cultural Change, University of Chicago Press, vol. 56(2), pages 265-296, January.
    4. Carlos Arnade & Daniel Pick & Mark Gehlhar, 2005. "Testing and incorporating seasonal structures into demand models for fruit," Agricultural Economics, International Association of Agricultural Economists, vol. 33(s3), pages 527-532, November.
    5. Cheng Fang & Bruce A. Babcock, 2003. "China's Cotton Policy and the Impact of China's WTO Accession and Bt Cotton Adoption on the Chinese and U.S. Cotton Sectors," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 03-wp322, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    6. Andrew Muhammad, 2009. "Would African Countries Benefit from the Termination of Kenya’s Economic Partnership Agreement (EPA) with the EU? An Analysis of EU Demand for Imported Roses," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(1), pages 220-238, February.
    7. Pan, Suwen & Hudson, Darren & Ethridge, Don E., 2010. "Market Structure Impacts on Market Distortions from Domestic Subsidies: The U. S. Cotton Case," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 11(2), pages 1-19, December.
    8. Deaton, Angus, 1987. "Estimation of own- and cross-price elasticities from household survey data," Journal of Econometrics, Elsevier, vol. 36(1-2), pages 7-30.
    9. Yuanlong Ge & Holly H. Wang & Sung K. Ahn, 2010. "Cotton market integration and the impact of China's new exchange rate regime," Agricultural Economics, International Association of Agricultural Economists, vol. 41(5), pages 443-451, September.
    10. Andrew Muhammad, 2007. "The impact of increasing non-agricultural market access on EU demand for imported fish: implications for Lake Victoria chilled fillet exports," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 34(4), pages 461-477, December.
    11. Suwen Pan & Samarendu Mohanty & Mark Welch & Don Ethridge & Mohamadou Fadiga, 2007. "Effects Of Chinese Currency Revaluation On World Fiber Markets," Contemporary Economic Policy, Western Economic Association International, vol. 25(2), pages 185-205, April.
    12. Frank Fuller & John Beghin & Stéphane De Cara & Jacinto Fabiosa & Cheng Fang & Holger Matthey, 2003. "China's Accession to the World Trade Organization: What Is at Stake for Agricultural Markets?," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 399-414.
    13. Maria Erlinda Mutuc & Samarendu Mohanty & Don Ethridge & Darren Hudson, 2011. "The effects of the removal of US safeguards on imports from China," Applied Economics Letters, Taylor & Francis Journals, vol. 18(10), pages 901-913.
    14. MacDonald, Stephen & Pan, Suwen & Somwaru, Agapi & Tuan, Francis, 2004. "China’s Role in World Cotton and Textile Markets," Conference papers 331298, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    15. Huang, Jikun & Hu, Ruifa & van Meijl, Hans & van Tongeren, Frank, 2004. "Biotechnology boosts to crop productivity in China: trade and welfare implications," Journal of Development Economics, Elsevier, vol. 75(1), pages 27-54, October.
    16. Denis Audet, 2007. "Smooth as Silk? A First Look at the Post MFA Textiles and Clothing Landscape," Journal of International Economic Law, Oxford University Press, vol. 10(2), pages 267-284, June.
    17. Arnade, Carlos Anthony & Pick, Daniel H. & Vasavada, Utpal, 1993. "Testing Dynamic Specifications For Import Demand Models: The Case Of Cotton," Working Papers 51119, International Agricultural Trade Research Consortium.
    18. Terry L. Kastens & Gary W. Brester, 1996. "Model Selection and Forecasting Ability of Theory-Constrained Food Demand Systems," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 301-312.
    19. Sims, Christopher A & Stock, James H & Watson, Mark W, 1990. "Inference in Linear Time Series Models with Some Unit Roots," Econometrica, Econometric Society, vol. 58(1), pages 113-144, January.
    20. Barten, A. P., 1969. "Maximum likelihood estimation of a complete system of demand equations," European Economic Review, Elsevier, vol. 1(1), pages 7-73.
    21. Clements, Kenneth W. & Theil, Henri, 1978. "A simple method of estimating price elasticities in international trade," Economics Letters, Elsevier, vol. 1(2), pages 133-137.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xinyao Wang & Dan Li & Yue Yu, 2022. "Current Situation and Optimization Countermeasures of Cotton Subsidy in China Based on WTO Rules," Agriculture, MDPI, vol. 12(8), pages 1-16, August.
    2. Sun, Changyou, 2015. "An investigation of China's import demand for wood pulp and wastepaper," Forest Policy and Economics, Elsevier, vol. 61(C), pages 113-121.
    3. Muhammad, Andrew & Jones, Keithly G., 2021. "The end of the trade war? Effects of tariff exclusions on U.S. forest products in China," Forest Policy and Economics, Elsevier, vol. 122(C).
    4. Luo, Xinjian & Sun, Changyou & Jiang, Hongfei & Zhang, Ying & Meng, Qian, 2015. "International trade after intervention: The case of bedroom furniture," Forest Policy and Economics, Elsevier, vol. 50(C), pages 180-191.
    5. Nazif Durmaz, 2014. "Inventories of Asian Textile Producers, US Cotton Exports, and the Exchange Rate," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(4), pages 397-413, September.
    6. Sun, Changyou, 2014. "Recent growth in China's roundwood import and its global implications," Forest Policy and Economics, Elsevier, vol. 39(C), pages 43-53.
    7. Yanfeng Lou & Yezhuang Tian & Kai Wang, 2020. "The Spillover Effect of US Industrial Subsidies on China’s Exports," Sustainability, MDPI, vol. 12(7), pages 1-12, April.
    8. Chen, Bowen & Villoria, Nelson & Xia, Tian, 2017. "Import Protections in China’s Grain Markets: An Empirical Assessment," 2017: Globalization Adrift, December 3-5, 2017, Washington, D.C. 266817, International Agricultural Trade Research Consortium.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Muhammad, Andrew & Ngeleza, Guyslain K., 2009. "European Union preferential trade agreements with developing countries and their impact on Colombian and Kenyan carnation exports to the United Kingdom:," IFPRI discussion papers 862, International Food Policy Research Institute (IFPRI).
    2. Wang, Xiaojin & Reed, Michael, 2014. "Estimation of U.S. Demand for Imported Shrimp by Country: A Two-stage Differential Production Approach," 2014 Annual Meeting, February 1-4, 2014, Dallas, Texas 162459, Southern Agricultural Economics Association.
    3. Muhammad, Andrew & Ngeleza, Guyslain K., 2009. "The role of the Generalised System of Preferences (GSP) in determining carnation demand in the United Kingdom: implications for Colombian and Kenyan exports," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 48(3), pages 1-16, September.
    4. Oh, Juhyun & Suh, Dong Hee, 2024. "Exploring the import allocation of wood pellets: Insights from price and policy influences under the renewable portfolio standard," Forest Policy and Economics, Elsevier, vol. 161(C).
    5. Andrew Muhammad, 2009. "Would African Countries Benefit from the Termination of Kenya’s Economic Partnership Agreement (EPA) with the EU? An Analysis of EU Demand for Imported Roses," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(1), pages 220-238, February.
    6. Yan Dong & Yuliang Yao & Kefeng Xu, 2008. "Designing Supply Chain Backorder Contracts for Customer Retention," Working Papers 0038, College of Business, University of Texas at San Antonio.
    7. James L. Seale & Mary A. Marchant & Alberto Basso, 2003. "Imports versus Domestic Production: A Demand System Analysis of the U.S. Red Wine Market," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(1), pages 187-202.
    8. Countryman Amanda M & Muhammad Andrew, 2017. "The Effects of T-TIP Market Access Reform on EU Beef Import Demand," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 15(1), pages 1-10, January.
    9. Andrew Muhammad, 2013. "Estimating import demand in the presence of seasonal trade and unobserved prices," Applied Economics Letters, Taylor & Francis Journals, vol. 20(5), pages 446-451, March.
    10. Subramanian, Arjunan & Qaim, Matin, 2009. "Rural Poverty and Employment Effects of Bt Cotton in India," 2009 Conference, August 16-22, 2009, Beijing, China 50555, International Association of Agricultural Economists.
    11. Malone, Trey & Lusk, Jayson L., 2016. "Putting the Chicken Before the Egg Price: An Ex Post Analysis of California's Battery Cage Ban," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-15, September.
    12. Amrita Chatterjee & Sanjib Pohit & Arpita Ghose, 2016. "Trade and Distributional Impacts of Genetically Modified Crops in India: A CGE Analysis," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 10(3), pages 381-407, August.
    13. Muhammad, Andrew & D’Souza, Anna & Amponsah, William, 2013. "Violence, Instability, and Trade: Evidence from Kenya’s Cut Flower Sector," World Development, Elsevier, vol. 51(C), pages 20-31.
    14. Zhu, Manhong & Onel, Gulcan & Seale, James L., 2015. "An empirical input allocation model for the cost minimizing multiproduct firm," Economics Letters, Elsevier, vol. 132(C), pages 73-76.
    15. Antoine Bouët & Guillaume P. Gruère, 2011. "Refining Opportunity Cost Estimates of Not Adopting GM Cotton: An Application in Seven Sub-Saharan African Countries," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(2), pages 260-279.
    16. Lila J. Truett & Dale B. Truett, 2008. "The South African Textile Industry: Challenges and Opportunities," Working Papers 0044, College of Business, University of Texas at San Antonio.
    17. Kehar Singh & Madan M. Dey & Prasanna Surathkal, 2014. "Seasonal and Spatial Variations in Demand for and Elasticities of Fish Products in the United States: An Analysis Based on Market-Level Scanner Data," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 62(3), pages 343-363, September.
    18. Washington, Andrew A. & Kilmer, Richard L., 2001. "The Derived Demand For Imported Cheese Into Japan By Country," 2001: International Trade in Livestock Products Symposium, January 2001, Auckland, New Zealand 14551, International Agricultural Trade Research Consortium.
    19. Antoine Bouet & Guillaume Gruère, 2010. "Refining opportunity cost estimates of not adopting GM cotton : An application in seven sub-saharan african countries," Larefi Working Papers 201002, Larefi, Université Bordeaux 4.
    20. Nazif Durmaz, 2014. "Inventories of Asian Textile Producers, US Cotton Exports, and the Exchange Rate," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(4), pages 397-413, September.

    More about this item

    Keywords

    International Relations/Trade;

    JEL classification:

    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:joaaec:123786. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/saeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.