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Latin American Agricultural Trade: The Role of the WTO in Sustainable Virtual Water Flows

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  • Niemeyer, Insa
  • Garrido, Alberto
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    Abstract

    International agricultural trade has been growing significantly during the last decade. Many countries rely on imports to ensure adequate food supplies to the people. A few are becoming food baskets of the world. This process raises issues about the food security in depending countries and potentially unsustainable land and water use in exporting countries. In this paper, we analyse the impacts of amplified farm trade on natural resources, especially water. Farm exports and imports of five Latin America countries (Brazil, Argentina, Mexico, Peru and Chile) are examined carefully. A preliminary analysis indicates that virtual water imports can save valuable water resources in water-short countries, such as Mexico and Chile. Major exporting countries, including Brazil and Argentina, have become big exporters due to abundant natural resource endowments. The opportunity costs of agricultural production in those countries are identified as being low, because of the predominant green water use. It is concluded that virtual water trade can be a powerful tool to alleviate water stress in semi-arid countries. However, for exporting nations a sustainable water use can only be guaranteed if environmental production costs are fully reflected in the commodity prices. There is no basis for erecting environmental trade tariffs on exporters though. Setting up legal foundations for them in full compliance with WTOs processes would be a daunting task.

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    Bibliographic Info

    Paper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 114615.

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    Date of creation: 02 Sep 2011
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    Handle: RePEc:ags:eaae11:114615

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    Related research

    Keywords: farm trade; water; blue water; green water; global sustainability; food production; global food demand; water pricing; WTO; International Relations/Trade; Resource /Energy Economics and Policy;

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    1. Reimer, Jeffrey J. & Li, Man, 2010. "Trade Costs and the Gains from Trade in Crop Agriculture," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61169, Agricultural and Applied Economics Association.
    2. Maria Berrittella & Katrin Rehdanz & Roberto Roson & Richard S.J. Tol, 2006. "The Economic Impact Of Water Pricing: A Computable General Equilibrium Analysis," Working Papers FNU-96, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2006.
    3. Aldaya, M.M. & Allan, J.A. & Hoekstra, A.Y., 2010. "Strategic importance of green water in international crop trade," Ecological Economics, Elsevier, vol. 69(4), pages 887-894, February.
    4. Yang, Hong & Wang, Lei & Zehnder, Alexander J.B., 2007. "Water scarcity and food trade in the Southern and Eastern Mediterranean countries," Food Policy, Elsevier, vol. 32(5-6), pages 585-605.
    5. Yang, Hong & Zehnder, Alexander J. B., 2002. "Water Scarcity and Food Import: A Case Study for Southern Mediterranean Countries," World Development, Elsevier, vol. 30(8), pages 1413-1430, August.
    6. Eglin, Richard, 2001. "Keeping the "T" in the WTO: where to next on environment and labor standards?," The North American Journal of Economics and Finance, Elsevier, vol. 12(2), pages 173-191, July.
    7. Bartolini, F. & Bazzani, G.M. & Gallerani, V. & Raggi, M. & Viaggi, D., 2007. "The impact of water and agriculture policy scenarios on irrigated farming systems in Italy: An analysis based on farm level multi-attribute linear programming models," Agricultural Systems, Elsevier, vol. 93(1-3), pages 90-114, March.
    8. Wichelns, Dennis, 2004. "The policy relevance of virtual water can be enhanced by considering comparative advantages," Agricultural Water Management, Elsevier, vol. 66(1), pages 49-63, April.
    9. Ringler, Claudia & Rosegrant, Mark W. & Paisner, Michael S., 2000. "Irrigation and water resources in Latin America and the Caribbean: challenges and strategies," EPTD discussion papers 64, International Food Policy Research Institute (IFPRI).
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