Taipei, Taiwan : 5th Annual Conference on Global Economic Analysis, 2002-06-05/2002-06-07
LEI Internationaal Beleid
Contribution in proceedings
This paper analyses the impact of adopting non-food genetically modified organisms (GMOs) in China on production, trade and welfare. On the one hand the paper focuses on the productivity enhancing impact of GMOs and on the other hand it treats the consequences of some form of restrictions on Chinese exports of non-food GMO crops and related products (like cotton shirts). A main feature of this paper is that productivity impact of GMOs are based on econometric estimates that use micro-level data for the cotton sector (Huang, 2000). Biotechnology leads to crop specific factor biased technical change. A second feature is the linkage of a partial equilibrium model of the Chinese agricultural sector with a global computable general equilibrium model. China¿s Agricultural Policy Simulation Model (CAPSiM) is used in combination with the Global Trade Analysis Project (GTAP) model. CAPSIM¿s strength is the detailed representation of the Chinese agricultural sector, and especially the relation between agricultural R&D and productivity. By embedding the detailed representation of the Chinese agricultural sector into the GTAP general equilibrium framework we are able analyze vertical linkages between BT cotton and textiles. Furthermore, the representation of bilateral trade linkages between several regions in the GTAP model allows us to study a wide range of trade implications. First, the patterns of global trade in both the textiles and the garments sector are affected by increased productivity of the Chinese cotton sector. This has an immediate impact on other major exporters, most notable India and Bangladesh. Second, we investigate the possible impact of import restrictions pertaining to GMOs (e.g. EU, Japan). A baseline in both CAPSIM and GTAP that includes China¿s WTO accession is constructed for the period 1998-2010. Version 5 data are used in the GTAP model. First results indicate that the rapid adoption of Bt Cotton in China has an important impact on Chinas production, trade and welfare levels, whereas the impact of trade restrictions are less important. The use of empirical estimates that give a better indication of the magnitudes of the productivity impact of GMOs is therefore very important.
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