The Trans-Pacific Partnership and Japan’s Agricultural Trade
-
Andrew Schmitz
and
David Zilberman
Abstract
The Trans-Pacific Partnership Agreement (TPPA) was concluded on October 5, 2015, by twelve countries that include the United States, Japan, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Under the TPPA, Japan will partially liberalize its five politically sensitive agricultural subsectors: (1) rice, (2) beef and pork, (3) wheat and barley, (4) sugar, and (5) dairy, none of which contain any genetically modified (GM) content. Under full liberalization, Japanese producers in these subsectors will lose (e. g., rice producers will lose over $6 billion and beef producers will lose over $2 billion). Excluding butter, the trade impact of the TPPA on the Japanese government will be negative because of tariff and resale-revenue losses. Our empirical results provide the full effects of complete trade liberalization. However, because the TPPA negotiations of 2015 resulted in only partial trade liberalization, our results can be easily modified to deal with the degree to which trade distortions are removed for each of the above agricultural subsectors. In terms of producers who lose from trade liberalization, the Japanese government will provide compensation.
Acknowledgements
The authors gratefully acknowledge the helpful comments and valuable advice from two anonymous reviewers and the editors of JAFIO Special Issue on GMOs and Trade Agreements, David Bullock and Norbert Wilson. The authors also thank Helen Carole Schmitz and Carol Fountain for their editorial help.
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Appendix
To empirically estimate the net social welfare effect, we first need values for
demand price elasticity (
for, and
for
If we also assume a constant supply price elasticity, then we will need the cutoff price
The demand price elasticity can be calculated from points
The area of
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Articles in the same Issue
- Implications of TTIP and TPP for GM/non-GM Coexistence
- Labeling Demands, Coexistence and the Challenges for Trade
- Food Labels, Information, and Trade in GMOs
- Approaches to Set Rules for Trade in the Products of Agricultural Biotechnology. Is Harmonization under Trans-Pacific Partnership Possible?
- The Trans-Pacific Partnership and Japan’s Agricultural Trade
- The Effects of T-TIP Market Access Reform on EU Beef Import Demand
- The Economics of GM Labeling and Implications for Trade
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Articles in the same Issue
- Implications of TTIP and TPP for GM/non-GM Coexistence
- Labeling Demands, Coexistence and the Challenges for Trade
- Food Labels, Information, and Trade in GMOs
- Approaches to Set Rules for Trade in the Products of Agricultural Biotechnology. Is Harmonization under Trans-Pacific Partnership Possible?
- The Trans-Pacific Partnership and Japan’s Agricultural Trade
- The Effects of T-TIP Market Access Reform on EU Beef Import Demand
- The Economics of GM Labeling and Implications for Trade
- The Product Line Strategy of a Company Selling Seed with a Licensed GM Trait
