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Measuring the impacts of distortions in the European Union cotton sector: a partial equilibrium analysis using the ATPSM model framework

Author

Listed:
  • Gadanakis, Yiorgos
  • Baourakis, George
  • Clapan, Carmen

Abstract

The “cotton issue” has been a topic of several academic discussions for trade policy analysts. However the design of trade and agricultural policy in the EU and the USA has become a politically sensitive matter throughout the last five years. This study utilizing the Agricultural Trade Policy Simulation Model (ATPSM) aims to gain insights into the global cotton market, to explain why domestic support for cotton has become an issue, to quantify the impact of the new EU agricultural policy on the cotton sector, and to measure the effect of eliminating support policies on production and trade. Results indicate that full trade liberalization would lead the four West African countries to better terms of trade with the EU. If tariff reduction follows the so-called Swiss formula, world prices would increase by 3.5%.

Suggested Citation

  • Gadanakis, Yiorgos & Baourakis, George & Clapan, Carmen, 2007. "Measuring the impacts of distortions in the European Union cotton sector: a partial equilibrium analysis using the ATPSM model framework," Working Papers 7285, TRADEAG - Agricultural Trade Agreements.
  • Handle: RePEc:ags:tragwp:7285
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    File URL: http://purl.umn.edu/7285
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    References listed on IDEAS

    as
    1. Stoforos, Chrysostomos E., 2003. "Production, Consumption and Welfare Implications of Trade Liberalisation: The Case of Greek Agriculture," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 4(1), January.
    2. Nicholas Minot & Lisa Daniels, 2005. "Impact of global cotton markets on rural poverty in Benin," Agricultural Economics, International Association of Agricultural Economists, vol. 33(s3), pages 453-466, November.
    3. Gillson, I & Poulton, Colin & Balcombe, Kelvin & Page, S, 2004. "Understanding the impact of Cotton Subsidies on developing countries," MPRA Paper 15373, University Library of Munich, Germany.
    4. Bruce A. Babcock & John C. Beghin & Jacinto F. Fabiosa & Stephane De Cara & Amani Elobeid & Cheng Fang & Chad E. Hart & Murat Isik & Holger Matthey & Alexander E. Saak & Karen Kovarik & FAPRI Staff, 2002. "Doha Round of the World Trade Organization: Appraising Further Liberalization of Agricultural Markets, The," Center for Agricultural and Rural Development (CARD) Publications 02-wp317, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    5. Stephen Tokarick, 2003. "Measuring the Impact of Distortions in Agricultural Trade in Partial and General Equilibrium," IMF Working Papers 03/110, International Monetary Fund.
    6. Baffes, John & Ajwad, Mohamed I., 1998. "Detecting price links in the world cotton market," Policy Research Working Paper Series 1944, The World Bank.
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