IMPACTS OF DOMESTIC AND TRADE POLICIES ON AGRI-FOOD MARKETS

The overall goal of this project is to comprehensively document and measure in a unified framework the existing trade barriers, domestic supports, and export expansion policies that besiege agricultural trade, and analyze the impacts of these policies on commodity markets, trade, and economic welfare. The specific objective are to1. catalog and measure four classes of policies--tariffs, NTMs, domestic subsidies, and export promotion--for agricultural products;2. develop gravity trade models for highly disaggregated agricultural products to(a) estimate trade elasticities in a nested CES structure to obtain the elasticity of substitution for three tiers: across goods, across home and foreign goods, and across foreign source countries;(b) estimate tariff-rate equivalents of NTB and SPS barriers, and ad valorem equivalents of domestic subsidies and export expansion policies;(c) quantify the impacts of the four classes of policies on bilateral trade;3. develop a gravity model of US state-level trade for highly disaggregated agricultural products (as the composition of agricultural production varies across states) to evaluate the impact of the four classes of policies on state-level exports;4. perform both partial equilibrium and general equilibrium counterfactual analysis based on the estimates obtained from the gravity models to evaluate the effects of the removal of domestic subsidies, trade barriers, and export promotion policies on world agriculture and welfare.