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The impact of an EU-US Transatlantic Trade and Investment Partnership Agreement on Biofuel and Feedstock Markets

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  • John C. Beghin
  • Jean-Christophe Bureau
  • Alexandre Gohin

Abstract

We assess the impact of a potential TTIP bilateral free trade agreement on the EU and US bio-economies (feedstock, biofuels, by-products, and related competing crops) and major trade partners in these markets. The analysis develops a multi-market model that incorporates bilateral trade flows (US to EU, EU to US, and similarly with third countries) and is calibrated to OECD-FAO baseline for 2013–2022 to account for recent policy decisions. The major policy reforms from a TTIP involve tariff and TRQ liberalization and their direct contractionary impact on US sugar supply, EU biofuel production, and indirect negative effect on US HFCS production. EU sugar and isoglucose productions expand along with US ethanol and biodiesel and oilseed crushing. EU sugar would flow to the US, US biofuels and vegetable oil to the EU. We further quantify nontariff measures (NTM) affecting these trade flows between the EU and the US. EU oilseed production contracts, and EU crushing expands with improving crushing margins following reduced NTM frictions. Our analysis reveals limited net welfare gains with most net benefits reaped by Brazil and not the two trading partners of the TTIP.

Suggested Citation

  • John C. Beghin & Jean-Christophe Bureau & Alexandre Gohin, 2014. "The impact of an EU-US Transatlantic Trade and Investment Partnership Agreement on Biofuel and Feedstock Markets," Center for Agricultural and Rural Development (CARD) Publications 14-wp552, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  • Handle: RePEc:ias:cpaper:14-wp552
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    References listed on IDEAS

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    Cited by:

    1. John C. Beghin & Jean-Christophe Bureau & Alexandre Gohin, 2017. "The Impact of an EU–US Transatlantic Trade and Investment Partnership Agreement on Biofuel and Feedstock Markets," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(2), pages 321-344, June.

    More about this item

    Keywords

    TTIP; bilateral trade agreement; biofuel; ethanol; biodiesel; sugar; nontariff measure JEL Codes: F13; Q17; Q42; Q48;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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