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Effects Of Agri-Environmental Payment Policies On Agricultural Trade

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  • Cooper, Joseph C.
  • Peters, Mark
  • Claassen, Roger

Abstract

In many OECD countries, including the U.S., interest in developing agri-environmental payment programs is currently strong. In the future, the inclusion of an agri-environmental payment program into the WTO's "green box" could be more easily challenged by WTO member countries on the basis that it has more than "minimal" trade-distorting impacts on production. The goal of this paper is to conduct an ex ante analysis of the trade impacts of stylized examples of agri-environmental payment programs that have been proposed for implementation in the near future. To simulate the production and trade impacts of these programs, we use a partial equilibrium model of the U.S. agricultural sector in a sensitivity analysis across a range of design options for agri-environmental payments. For the three agri-environmental payment scenarios evaluated, the maximum change in exports ranges from a 7 percent decrease (wheat) to a 1 percent increase (soybeans). We do not expect the programs that decrease U.S. production, which would tend to have an upward pressure on world commodity prices, to be challenged before the WTO.

Suggested Citation

  • Cooper, Joseph C. & Peters, Mark & Claassen, Roger, 2003. "Effects Of Agri-Environmental Payment Policies On Agricultural Trade," 2003 Annual meeting, July 27-30, Montreal, Canada 22240, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea03:22240
    DOI: 10.22004/ag.econ.22240
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    1. Salhofer, Klaus & Streicher, Gerhard, 2005. "Production Effects of Agri-environmental "Green Box" Payments: Empirical Results from the EU," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24494, European Association of Agricultural Economists.
    2. Colyer, Dale, 2004. "Environmental Regulations And Competitiveness," Working Papers 19100, West Virginia University, Department of Agricultural Resource Economics.
    3. Herve Guyomard & Katell Le Bris, 2003. "Multifunctionality, agricultural trade and WTO negotiations : a review of interactions and issues [Multifonctionnalité, échanges agricoles et négociations à l'OMC : une synthèse des interactions et," Post-Print hal-02825715, HAL.
    4. Colyer, Dale, 2004. "Environmental Regulations and Agricultural Competitiveness," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 5(01), pages 1-17.

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