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Post-Uruguay Round price linkages between developed and developing countries

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  • Yavapolkul, Navin
  • Gopinath, Munisamy
  • Gulati, Ashok

Abstract

The Uruguay Round Agreement on Agriculture attempted to lower distortions in the global agricultural markets. However, the significant fall in commodity prices in late 1990s may have reduced the incentives for both developed and developing countries to better integrate into the world markets. This study analyzes price linkages and adjustment between developed and developing countries during the post-Uruguay Round period. Prices of two key commodity markets, long-grain rice and medium-hard wheat, are assembled for major exporters and producers. Results from the multivariate cointegration analysis suggest partial market integration between developed and developing countries in the post-Uruguay Round period. Developed countries are found to be price leaders in these two markets, and in most cases, the changes in their prices have relatively large impacts on those of the developing countries. The new entrants into world markets (Vietnam and Argentina) have faced considerable price adjustment due to changes in the developed countries' prices.

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series MTID discussion papers with number 76.

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Date of creation: 2004
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Handle: RePEc:fpr:mtiddp:76

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Keywords: Price linkages ; Wheat markets ; Rice markets ; Uruguay Round Agreement on Agriculture (URAA) ; Doha Developmental Round of the World Trade Organization (WTO) ;

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References

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Cited by:
  1. Mesbah Motamed & Kenneth A. Foster & Wallace E. Tyner, 2008. "Applying cointegration and error correction to measure trade linkages: maize prices in the United States and Mexico," Agricultural Economics, International Association of Agricultural Economists, vol. 39(1), pages 29-39, 07.
  2. Alam, Mohammad Jahangir & Buysse, Jeroen & McKenzie, Andrew M. & Wailes, Eric J. & Van Huylenbroeck, Guido, 2010. "Linkage between World and Domestic Prices of Rice under the regime of Agricultural Trade Liberalization in Bangladesh," 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia 58878, Australian Agricultural and Resource Economics Society.

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