Date of Graduation

5-2015

Document Type

Thesis

Degree Name

Master of Science in Agricultural Economics (MS)

Degree Level

Graduate

Department

Agricultural Economics and Agribusiness

Advisor/Mentor

Eric Wailes

Committee Member

Guido Van Huylenbroeck

Second Committee Member

Alvaro Durand-Morat

Keywords

Social sciences, Bilateral trade agreement, Equilibrium model, Rice trade, Tariff removal, Transatlantic trade and investment partnership

Abstract

In 2013, trade negotiations began between the United States and the European Union to create a free trade agreement with the goal of phasing out tariffs for all but the most sensitive products. To aid negotiators in analyzing potential agriculture agreements, the objective of this study is to quantify policy impacts of a potential trade liberalization of rice. This study will also be a useful analysis for various participants in the rice market to make educated business decisions.

This study utilizes the spatial partial equilibrium model RICEFLOW to project the differences in market prices, production volumes, trade volumes, and consumption volumes that would result from a 10 year straight line decrease of bilateral import tariffs. The global rice market is disaggregated by rice type and milling level in the model, which helps to generate interesting results that would not be apparent in a model that is more highly aggregated.

The results suggest US rice becomes more competitive in the EU market causing an increase in the US rice prices. US production is projected to increase greatly, both in paddy production and the milling sector from the trade policy reform. EU production is projected to decrease. The results suggest that there will be some substitution by type in the EU as a result of the agreement.

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