International Trade: What Happens in     China Doesn’t Stay in China       Transatlantic Conference on Food and Fuels     ...
Agricultural trade is important forproducers and consumers in Nebraska,the US and the EU   Exports account for about 30 p...
Three important trends are influencingthe agricultural trade of Nebraska, theUnited States and the European Union1.   Chan...
First trend: Changing Composition of World Agricultural              Trade. Historically, US agricultural exports have bee...
The composition of world agriculturaltrade has also changed:   In 1961, consumer-oriented goods defined as meat, dairy,  ...
Nebraska Agricultural Exports. Percentages made up ofbulk commodities, consumer-oriented goods andintermediate goodsBulk  ...
Second trend: Neighborhood effects   As multilateral trade liberalization has stalled, countries have    turned to region...
EU agricultural exports divided by EU agriculturalimports (degree of food self-sufficiency)       1.2        1       0.8  ...
Percentage of Nebraska Food andAgricultural Exports Destined forSelected Regions Developing countries   66.5   73.4   70.1...
Third trend: Asia Rising – How significant are China               and India in the world economy?Share of the World Econo...
EU and US Trade with Asia and China, 2009(billion dollars and percentages of totals).                                    T...
Asia’s weight in the world is substantial andgrowing. This is particularly true for trade.   Note, however: If the Chines...
US Agricultural Exports (bulk commodities, consumeroriented goods and intermediate goods)                   Con-          ...
Percentage of US Agricultural Exports toSelected Regions, 1967-2010.        Developing   East     North      Latin        ...
Percentage of Extra-EU AgriculturalExports to Selected Regions, 1998-2009.Year   Non-EU                             Middle...
The table below traces the development of the EEC as it wasenlarged and took on further responsibilities culminating in th...
19   wes peterson
19   wes peterson
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19 wes peterson

  1. 1. International Trade: What Happens in China Doesn’t Stay in China Transatlantic Conference on Food and Fuels October 16-18, 2011 E. Wesley F. Peterson Department of Agricultural Economics University of Nebraska-Lincoln
  2. 2. Agricultural trade is important forproducers and consumers in Nebraska,the US and the EU Exports account for about 30 percent of the value of agricultural production in Nebraska. Between 20 and 25 percent of agricultural production in the US and EU is exported. Food and Agricultural imports in 2009 were valued at $101 billion in the US and $141 billion in the EU (6.3 and 8.4 percent of total merchandise imports respectively).
  3. 3. Three important trends are influencingthe agricultural trade of Nebraska, theUnited States and the European Union1. Changing Composition of World Agricultural Trade2. Neighborhood effects3. Asia Rising
  4. 4. First trend: Changing Composition of World Agricultural Trade. Historically, US agricultural exports have been dominated by bulk commodities (68 percent of agricultural exports in 1967 compared with 14 percent for consumer-oriented goods). Today, bulk commodities and consumer-oriented goods have similar shares (41 and 39 percent respectively). Shares of Bulk, Consumer-oriented and Intermediate Products in US Agricultural Exports 80 70 60 50 40 30 20 10 0 Bulk Commodities Consumer-oriented Goods Intermediate Goods
  5. 5. The composition of world agriculturaltrade has also changed: In 1961, consumer-oriented goods defined as meat, dairy, fruits, vegetables and beverages made up 25 percent of world agricultural exports compared with 56 percent in 2008.Note that EU food and agricultural exports have always beenfocused on consumer-oriented products. Consumer-orientedgoods made up about 53 percent of EU agricultural exports in1961 compared with 51 percent in 2008.
  6. 6. Nebraska Agricultural Exports. Percentages made up ofbulk commodities, consumer-oriented goods andintermediate goodsBulk 30.2 28.6 34.7 30.1Consumer 30.2 34.6 39.5 47.9Intermediate 39.6 36.8 25.8 22.0Value of AgriculturalExports ($ million) 843.5 1,349.0 2,335.4 2,744.5 Source: USDA Foreign Agriculture Service and Author’s calculations
  7. 7. Second trend: Neighborhood effects As multilateral trade liberalization has stalled, countries have turned to regional and bilateral trade agreements. Along with earlier regional agreements such as the EU and NAFTA, these trade pacts have led to increased regional food and agricultural trade. Percentage of US Agricultural Exports to Selected Regions, 1907-2010 80 70 60 50 40 30 20 10 0 1967 1970 1975 1980 1985 1990 1995 2000 2005 2010 Developing Countries East Asia North America Latin America EU-27 Former USSR
  8. 8. EU agricultural exports divided by EU agriculturalimports (degree of food self-sufficiency) 1.2 1 0.8 0.6 y = -0.0002x2 + 0.0241x + 0.3781 Series1 R² = 0.9837 Poly. (Series1) 0.4 0.2 0
  9. 9. Percentage of Nebraska Food andAgricultural Exports Destined forSelected Regions Developing countries 66.5 73.4 70.1 69.7 East Asia 32.5 28.6 28.3 34.2 North America 50.7 56.2 54.3 49.1 Latin America 38.7 46.8 44.0 41.5 EU-27 4.1 3.3 3.2 4.4 Former USSR 1.1 2.5 3.1 1.7
  10. 10. Third trend: Asia Rising – How significant are China and India in the world economy?Share of the World Economy Accounted For by Various Countries and Regions (%). 1993 2009China 1.8 8.2India 1.0 2.4Brazil 1.9 2.6Russia 1.4 2.2BRIC 6.1 15.4Japan 18.2 8.2Korea 1.4 1.6East Asia (China, Japan, Korea) 21.4 18.0Emerging Asia (China, India, Indonesia, Malaysia) 3.9 11.6EU-27 30.0 28.8US 27.1 24.1High-income (EU-27, US, Japan, Korea) 76.7 62.7Source: World Bank
  11. 11. EU and US Trade with Asia and China, 2009(billion dollars and percentages of totals). Total Asia (%) China (%) US merchandise exports 1,057 286 (27.1%) 70 (6.6%) US merchandise imports 1,602 620 (38.7%) 310 (19.4%) US agricultural exports 120 51 (42.5%) 18 (15.0%) US agricultural imports 101 25 (24.8%) 6 (5.9%) EU merchandise exports* 1,528 383 (25.1%) 113 (7.4%) EU merchandise imports* 1,673 621 (37.1%) 299 (17.0%) EU agricultural exports* 110 26 (23.6%) 5 (4.5%) EU agricultural imports* 141 32 (22.7%) 7 (5.0%) *Extra-EU trade (excludes intra-trade among EU members) Source: WTO
  12. 12. Asia’s weight in the world is substantial andgrowing. This is particularly true for trade. Note, however: If the Chinese economy grows at an annual rate of 8 percent for the foreseeable future (unlikely) while the US economy grows at an annual rate of 1.5 percent (not unimaginable), it would take about 17 years for Chinese GDP to equal US GDP. And when China’s economy is as large as that of the US, China will still have about four times as many people so per capita income would only be about one-fourth of per capita income in the US. Currently per capita income in the US is eleven times that of China.
  13. 13. US Agricultural Exports (bulk commodities, consumeroriented goods and intermediate goods) Con- Inter- Total* Bulk Cons. Intermed.Year Bulk* sumer* mediate* share** share** share**1967 4.34 0.89 1.16 6.39 67.9 13.9 18.21970 4.60 0.99 1.64 7.19 64.0 13.8 22.21975 16.49 2.21 3.14 21.84 75.5 10.1 14.41980 28.79 4.88 7.57 41.22 69.8 11.8 18.41985 17.87 4.76 6.41 29.04 61.5 16.4 22.11990 20.24 10.58 8.67 39.49 51.3 26.8 21.91995 26.01 19.06 11.14 56.21 46.3 33.9 19.82000 18.59 21.70 10.97 51.26 36.3 42.3 21.42005 23.22 27.21 12.75 63.18 36.8 43.1 20.12010 47.19 45.43 23.19 115.81 40.8 39.2 20.0 Source: FAS *Billions of current dollars ** Share in total agricultural exports of bulk, consumer and intermediate agricultural goods. Exports of forest and fish products have been excluded)
  14. 14. Percentage of US Agricultural Exports toSelected Regions, 1967-2010. Developing East North Latin Former Year countries Asia America America EU-27 USSR 1967 39.6 18.9 9.9 9.4 36.9 0.3 1970 36.6 22.9 13.6 9.7 34.9 0.3 1975 46.8 21.4 8.7 10.5 34.2 5.2 1980 50.9 28.3 10.5 14.8 31.6 2.5 1985 51.7 29.5 10.5 14.5 24.0 6.5 1990 49.4 35.4 17.1 12.9 18.9 5.7 1995 53.4 38.5 16.6 14.2 15.6 2.4 2000 53.1 32.8 27.4 20.7 12.7 1.6 2005 58.7 29.4 31.7 23.6 11.1 2.1 2010 66.7 35.1 27.2 21.5 7.7 1.4 Source: USDA Foreign Agriculture Service and author’s calculations.
  15. 15. Percentage of Extra-EU AgriculturalExports to Selected Regions, 1998-2009.Year Non-EU Middle Europe CIS Asia Africa East US China1998 -- -- 19.1 13.5 8.8 14.4 1.42000 -- -- 22.8 12.0 9.5 16.0 2.62003 19.2 9.2 21.7 12.7 8.2 19.4 2.22005 19.3 10.4 22.9 11.9 8.2 18.7 3.42007 17.5 13.0 22.7 13.2 8.3 16.9 4.12009 18.3 12.1 23.6 15.0 9.0 13.6 4.90 Source: WTO and author’s calculations
  16. 16. The table below traces the development of the EEC as it wasenlarged and took on further responsibilities culminating in theEU with 27 members today.

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