IDEAS home Printed from https://ideas.repec.org/a/rae/jouces/v82-83y2007p57-73.html
   My bibliography  Save this article

Agricultural multifunctionality and trade liberalisation

Author

Listed:
  • Thilo Glebe

    (Technische Universität München, Lehrstuhl für VWL-Umweltökonomie und Agrarpolitik, Alte Akademie 14, 85350 Freising-Weihenstephan,Germany)

  • Uwe Latacz-Lohmann

    (Department of Agricultural Economics, Christian-Albrechts University, Olshausenstr. 40, 24118 Kiel, Germany)

Abstract

This paper employs a partial equilibrium trade model to analyse the interaction of trade and environmental policy in the context of agriculture’s multifunctionality. We formally demonstrate that free trade is suboptimal if no efficient environmental policy addressing the provision of multifunctional benefits is in place. However, tariff reductions in a large net-importing country reinforce the incentive for that country to introduce environmental policy, though this policy will be strategically distorted to partly substitute for the tariff. Despite its strategic character, this environmental policy programme will unambiguously enhance global welfare if it is introduced in conjunction with tariff reductions. We conclude that, although the multifunctionality argument may lend some support to the criticism of trade liberalisation, the argument is not solid when trade liberalisation induces the introduction of environmental policy.

Suggested Citation

  • Thilo Glebe & Uwe Latacz-Lohmann, 2007. "Agricultural multifunctionality and trade liberalisation," Cahiers d'Economie et Sociologie Rurales, INRA Department of Economics, vol. 82, pages 57-73.
    • Handle: RePEc:rae:jouces:v:82-83:y:2007:p:57-73
    as

    Download full text from publisher

    File URL: http://ageconsearch.umn.edu/bitstream/189749/2/82-83-58-73.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alan Swinbank, 1999. "EU Agricultural, Agenda 2000 and the WTO Commitments," The World Economy, Wiley Blackwell, vol. 22(1), pages 41-54, January.
    2. P. Lynn Kennedy & Won W. Koo & Mary A. Marchant, 1999. "Key Issues and Challenges for the 1999 World Trade Organization Agriculture Round," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1134-1141.
    3. Kyle Bagwell & Robert W. Staiger, 2001. "The WTO as a Mechanism for Securing Market Access Property Rights: Implications for Global Labor and Environmental Issues," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 69-88, Summer.
    4. Alexandre Gohin & GianCarlo Moschini, 2006. "Evaluating the Market and Welfare Impacts of Agricultural Policies in Developed Countries: Comparison of Partial and General Equilibrium Measures," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(2), pages 195-211.
    5. Krutilla, Kerry, 1991. "Environmental regulation in an open economy," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 127-142, March.
    6. Romeo M. Bautista & Sherman Robinson & Finn Tarp & Peter Wobst, 2001. "Policy Bias and Agriculture: Partial and General Equilibrium Measures," Review of Development Economics, Wiley Blackwell, vol. 5(1), pages 89-104, February.
    7. Tim Josling, 2003. "Key Issues in the World Trade Organization Negotiations on Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(3), pages 663-667.
    8. R. G. Lipsey & Kelvin Lancaster, 1956. "The General Theory of Second Best," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 24(1), pages 11-32.
    9. Latacz-Lohmann, Uwe & Hodge, Ian D., 2003. "European agri-environmental policy for the 21st century," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(1), pages 1-17.
    10. David Blandford & Richard N. Boisvert & Linda Fulponi, 2003. "Nontrade Concerns: Reconciling Domestic Policy Objectives with Freer Trade in Agricultural Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(3), pages 668-673.
    11. Anderson, Kym, 2000. "Agriculture's 'multifunctionality' and the WTO," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 44(3), pages 1-20.
    12. Ian Hodge, 2000. "Agri‐environmental Pelationships and the Choice of Policy Mechanism," The World Economy, Wiley Blackwell, vol. 23(2), pages 257-273, February.
    13. H. Guyomard & L. P. Mahé & K. J. Munk & T. L. Roe, 1993. "Agriculture In The Uruguay Round: Ambitions And Realities," Journal of Agricultural Economics, Wiley Blackwell, vol. 44(2), pages 245-263, May.
    14. Josling, Tim & Tangermann, Stefan, 1999. "Implementation of the WTO Agreement on Agriculture and Developments for the Next Round of Negotiations," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 26(3), pages 371-388, August.
    15. Runge, C. Ford, 1999. "Beyond The Green Box: A Conceptual Framework For Agricultural Trade And The Environment," Working Papers 14417, University of Minnesota, Center for International Food and Agricultural Policy.
    16. Jeffrey M. Peterson & Richard N. Boisvert & Harry de Gorter, 2002. "Environmental policies for a multifunctional agricultural sector in open economies," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 29(4), pages 423-443, December.
    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. Thilo W. Glebe & Uwe Latacz-Lohmann, 2008. "Assessing the production and welfare effects of agri-environmental policy: a conceptual analysis," Journal of Socio-Economics in Agriculture (Until 2015: Yearbook of Socioeconomics in Agriculture), Swiss Society for Agricultural Economics and Rural Sociology, vol. 1(1), pages 75-92.
    2. Carl GAIGNÉ & Cathie LAROCHE DUPRAZ & Alan MATTHEWS, 2015. "Thirty years of European research on international trade in food and agricultural products," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 96(1), pages 91-130.
    3. Elsholz, Rudiger & Harsche, Johannes, 2011. "Price Changes, Policy Impacts and Instability in Farmers’ Revenues," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114342, European Association of Agricultural Economists.
    4. Rudiger Elsholz & Johannes Harsche, 2014. "Determinants of regional disparities in farm income: markets or policy?," Economia agro-alimentare, FrancoAngeli Editore, vol. 16(1), pages 13-36.

    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. Glebe, Thilo & Latacz-Lohmann, Uwe, 2007. "Agricultural multifunctionality and trade liberalisation," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 82.
    2. Thilo Glebe & Uwe Latacz-Lohmann, 2007. "Agricultural multifunctionality and trade liberalisation," Post-Print hal-01201147, HAL.
    3. Glebe, Thilo W., 2011. "Welfare economics of agricultural trade liberalisation and strategic environmental policy," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 8(2).
    4. Thilo W. Glebe & Uwe Latacz-Lohmann, 2008. "Assessing the production and welfare effects of agri-environmental policy: a conceptual analysis," Journal of Socio-Economics in Agriculture (Until 2015: Yearbook of Socioeconomics in Agriculture), Swiss Society for Agricultural Economics and Rural Sociology, vol. 1(1), pages 75-92.
    5. Glebe, T., 2006. "Agricultural multifunctionality: a case against trade liberalisation?," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 41, March.
    6. GAIGNE, Carl & LAROCHE DUPRAZ, Cathie & MATTHEWS, Alan, 2015. "Thirty years of European research on international trade in food and agricultural products," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 96(1), March.
    7. Glebe, Thilo W. & Latacz-Lohmann, Uwe, 2005. "Agricultural Trade Liberalisation and Strategic Environmental Policy," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24609, European Association of Agricultural Economists.
    8. Edwards, Geoff & Fraser, Iain, 2001. "Reconsidering agri-environmental policy permitted by the Uruguay round agreement," Ecological Economics, Elsevier, vol. 37(2), pages 313-326, May.
    9. Chang, Hung-Hao & Boisvert, Richard N. & Blandford, David, 2005. "Achieving Environmental Objectives Under Reduced Domestic Agricultural Support and Trade Liberalization: An Empirical Application to Taiwan," Agricultural and Resource Economics Review, Cambridge University Press, vol. 34(1), pages 16-31, April.
    10. Bertoni, Danilo & Olper, Alessandro, 2012. "The Political Economy Of Agri-Environmental Measures: An Empirical Assessment At The Eu Regional Level," APSTRACT: Applied Studies in Agribusiness and Commerce, AGRIMBA, vol. 6(3-4), pages 1-12, November.
    11. Sturm, Daniel & Ulph, Alistair, 2002. "Environment, trade, political economy and imperfect information: a survey," Discussion Paper Series In Economics And Econometrics 0204, Economics Division, School of Social Sciences, University of Southampton.
    12. Casamatta, Georges & Rausser, Gordon & Simon, Leo, 2011. "Optimal taxation with joint production of agriculture and rural amenities," Resource and Energy Economics, Elsevier, vol. 33(3), pages 544-553, September.
    13. Runge, C. Ford, 2001. "A Global Environment Organization (Geo) And The World Trading System: Prospects And Problems," Working Papers 14448, University of Minnesota, Center for International Food and Agricultural Policy.
    14. Defrancesco, Edi & Gatto, Paola & Runge, C. Ford & Trestini, Samuele, 2006. "Factors Affecting Farmers' Participation in Agri-Environmental Measures: Evidence from a Case Study," Conference Papers 6688, University of Minnesota, Center for International Food and Agricultural Policy.
    15. Arovuori, Kyösti & Kola, Jukka, 2005. "Policies and Measures for Multifunctional Agriculture: Experts' Insight," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 8(3), pages 1-31.
    16. Arovuori, Kyösti & Kola, Jukka, 2006. "Multifunctional Policy Measures: Farmers' Choice," 2006 Annual meeting, July 23-26, Long Beach, CA 21400, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    17. Ollikainen, Markku & Lankoski, Jussi E., 2005. "Multifunctional agriculture: The effect of non-public good on socially optimal policies," Discussion Papers 11866, MTT Agrifood Research Finland.
    18. Sturm, Daniel & Ulph, Alistair, 2002. "Environment, trade, political economy and imperfect information: a survey," Discussion Paper Series In Economics And Econometrics 204, Economics Division, School of Social Sciences, University of Southampton.
    19. Heikki Lehtonen & Jussi Lankoski & Jyrki Niemi, 2005. "Evaluating the Impact of Alternative Policy Scenarios on Multifunctionality: A Case Study of Finland," ENARPRI Working Papers 013, ENARPRI (European Network of Agricultural and Rural Policy Research Institutes).
    20. Kirschke, D. & Weber, G., 2004. "Internationale Wettbewerbsfähigkeit und Optionen für die EU-Agrarpolitik," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 39.

    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:rae:jouces:v:82-83:y:2007:p:57-73. 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: Nathalie Saux-Nogues (email available below). General contact details of provider: https://edirc.repec.org/data/inrapfr.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.