Asia-Pacific Food Markets and Trade in 2005: A Global, Economy-wide Perspective
Rapid industrialization in East Asia, particularly China, is raising questions about who will feed the region in the next century and how Asia will pay for its food imports. The paper addresses this question by first reviewing existing food sector projections and then taking an economy-wide perspective using projections to 2005, based on the global CGE model known as GTAP. After showing the impact of implementing the Uruguay Round, the paper explores the effects of slower global agricultural productivity growth and of slower economic growth in China. Several policy shocks are also examined. They include the entry of China (and hence Taiwan) into the World Trade Organization (WTO), and the failure to fully abolish the bilateral quotas on textiles and clothing trade as promised under the Uruguay Round. A slow-down in farm productivity growth could be very costly to the world economy, as could slower economic growth in China. Failure to honour Uruguay Round obligations to open textile and clothing markets in OECD countries is shown to reduce East Asia’s industrialization and thereby slow its net imports of food. On the other hand, the trade reform that is likely to accompany China’s WTO membership would greatly benefit the economies of China and the world. It would boost exports of manufactures and strengthen food import demand, not only by China, but also its densely populated neighbours with whom its intra- and inter-industry trade in manufactures would intensify.
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