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Special Course University of Tirana/University of Hawaii AHEED Program, Tirana,
Albania March 29 –April 9, 2010.
Title: International Agricultural Trade and Policy.
Instructor: Alex F. McCalla, Professor Emeritus of Agricultural and Resource
Economics, University of California, Davis.
Course Description: The course seeks to acquaint students with the nature of
agricultural trade and how it is influenced by domestic and international policies.
General equilibrium trade theory will be briefly reviewed. A simple partial
equilibrium trade model will be the basic analytical framework used to analyze
the impacts of protective trade and domestic agricultural policies on world
markets. Attention will be paid the WTO Agriculture Agreement which resulted
from Uruguay Round negotiations and on-going efforts to further implement
agricultural trade liberalization in the Doha Round of WTO negotiations. Special
topics will include new trade remedy law, globalization, biotechnology and trade,
the price spike of 2007/08, new trade theory and the economic meltdown
2009/10.
Text Book: Neil Vousden. The Economics of Trade Protection. Cambridge Univ
Press: 1990.
Class Procedures: We are scheduled for 3 hours per day, five day per week, for
two weeks. I propose breaking the three hours into two 1 hour, 20 minute
sessions with a 20 minute break in the middle. This will give us 20 periods
to work with. At least two of those will be needed for examinations. The
course will consist of lectures and plenty of opportunities for questions and
discussion.
Exams 2: mid-term Friday April 2 in the second period of the day, final April 9th.
Grading: Midterm 35 %; Final 55 %; class participation 10%.
Class Material – power points for each lecture and Additional Readings will be
posted on the AHEED web site.
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Course Outline & Required Readings
Section 1: The nature, Evolution and Current Status of International
Agricultural Trade.
Lecture #
1 -March 29. Introduction to course; Why we should study agricultural trade;
While it is a declining share of total trade it remains the most protected
sector; Nations pursue domestic support policies which require border
protection yet international trade is critical to national food security
strategies.
2 –March 29. The History of Agricultural Protectionism. Readings –1.McCalla
“Protectionism in.. Ag History 1969; 2. McCalla “Liberalizing Ag.
Trade…JARE 2003; 3. Brooks “Why is Ag. Trade Policy so…”EuroChoices
2009
3 –March 30. A Quantitative Snap shot of agricultural trade- commodity
composition, bulk vs processed, major players and trade flows. Reading:
Hand out in class
4 –March 30. Agricultural trade in the broader macro context- BRIC’s, growth
rates, trade flows and Balance of Payments.Readings- 1. Corden “The
World Credit Crisis…” World Economy 2009; 2. World Bank. Global
Economic Prospects ..2010
5 –March 31. (Public Lecture). Agricultural Commodity Markets in a broader
context- linkages to other commodity and financial markets.
6 –March 31. (Public Lecture). The Commodity Price Spike of 2007/08- what
caused it? Some alternative theories. Does it portend an end to declining
real grain prices? What has happened since and why? Readings: 1. Hebling
et al. “Riding a Wave” IMF March 2008; 2. FAO. World Fod and Ag…2009.
Section 2: A Review of Neo-classical Trade Theory.
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7 –April 1. Classical approaches- Adam Smith – absolute advantage; Ricardian
trade theory-comparative advantage; Heckscher-Ohlin –Samuelson (HOS)
neo-classical model. Reading:Text Chapter 1
8 –April 1. HOS cont.; financial flows and balance of payments. Reading: Text
Chpt 1
Section 3. Approaches to Trade Policy Analysis and Modeling.
9. –April 2. A partial –equilibrium approach. The simple graphics of excess S & D
functions; a two country world; introduction of transport costs and simple
unit tariffs. Readings: 1. Text Chpt 2; 2. McCalla and Josling Chpt 2 Policy
linkages..1985
April 2. MID-TERM EXAM 1 hour
10- April 5. Modeling country interventions; ad valorem tariffs, quotas, variable
levies; impacts on price stability and price transmission. Reading: Text
Chpts 2&3
11 –April 5. Tariff Rate Quota’s (TRQ’s).Reading : Skully “Economics of
TRQ..”April 2001
12 – April 6. Empirical approaches to trade modeling: General Equilibrium (CGE)
models-World Bank; Partial Equilibrium IFPRI IMPACT model. Readings: 1.
McCalla and Nash, Reforming Ag Trade..Vol 2,Chapters 2, 4 & 6; 2.
MIRAGE, Updated Version of the Model…
13–April 6. Trade Remedy Law & Agriculture: anti dumping, countervailing duties,
and dispute resolution. Readings: Prusa, “Anti-Dumping…”World Economy
, May 2005
Section 4: Topics.
14–April 7. New Trade Theory; Political Economy of Trade. Reading: Text
Chapters 7 & 8
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15 –April 7. Globalization and Agriculture. Readings: 1. Bhagwati “AntiGlobalization..”J Policy Modelling 2004; 2. Carter “Agriculture” 2006:
Crafts “Globalization…” Jan 2004; 3. IMF “Globalisation ..” Summary April
2008.
16–April 8. (Public Lecture) A Case Study of an Emerging Trade IssueBiotechnology and GMO’s . Readings: 1. FAO Ag Biotechnolgy…Rome 2004;
2. Economist Monsanto…Nov 2009; 3. Rauch “Will Frankenfoods..” The
Atlantic Oct 2003
17 –April 8. (Public Lecture) What’s Ahead for the World Economy? Reading;
Economist “The Long Climb” Oct. 3, 2009
April 9 Class summary and FINAL EXAM (2 hours)
REFERENCE READINGS
Bhagwati, J. “Anti-globalization: why?” Journal of Policy Modeling, 26(2004):43963.
Brooks, J. "Why is Agricultural Trade Policy so Difficult to Reform?" Eurochoices,
Volume 8 Issue 2 (August 2009).
Carter, C. “Agriculture” in Globalization Encyclopedia of Trade, Labor and Politics.
ABC-CLIO Publishers. 2006.
Corden, M. "The World Credit Crisis: Understanding It, and What to Do" The
World Economy, Vol. 32, Issue 3, March 2009.
Crafts, N. “Globalisation and Economic Growth: A Historical Perspective” The
World Economy, Volume 27, Issue 1, Page 45-58, Jan 2004.
Economist "Monsanto –The Parable of the Sower" Nov. 19, 2009.
Economist. “The Long Climb” October 3, 2009
FAO. “Agricultural Biotechnology: Meeting the needs of the poor?” Rome. 2004.
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FAO. “World Food and Agriculture in Review” Part II of The State of Food and
Agriculture, 2009. Rome 2009
Helbling Thomas, Valerie Mercer-Blackman, and Kevin Cheng “Riding a Wave”
Finance & Development, IMF, March 2008, Volume 45, Number 1.
IFPRI, MIRAGE, Updated Version of the Model for Trade Policy Analysis. 2007. Oct
15.
IMF , Press points for Chapter 5 Globalization, Commodity Prices and Developing
Countries. April 2008
McCalla, A.F. “Protectionism in Agricultural Trade” Agricultural History, Vol. XLIII
No. 3 July 1969.
McCalla, A.F, “Liberalizing Agricultural Trade: Will It Ever Be a Reality?” Journal of
Agricultural and Resource Economics Vol. 28(3): 419-434.
McCalla, A. F. and T.E. Josling. Agricultural Policies and World Markets. Macmillan:
1985. Chapter 2
McCalla, A. F. and J. Nash (Editors), Reforming Agricultural Trade for Developing
Countries. Vol 2. World Bank 2007: Chapter 2 (pps 20-39); Chapter 4 (pps 7989); Chapter 6 (112-145)
Prusa, Tom "Anti-dumping: A Growing Problem in International Trade" The World
Economy, Vol. 28, No. 5, pp. 683-99, May 2005.
Rauch, J. “Will Frankenfood Save the Planet?” The Atlantic, October 2003.
Skully, D. “The Economics of TRQ Administration” ERS, USDA, Technical Bulletin
No. 1893, April 2001.
World Bank. Global Economic Prospects 2010. Overview pps 1-14 Jan 2010.
3/18/2010