United Nations Conference on Trade and Development Workshop on Agricultural Trade Policy Simulation Model (ATPSM)

Transcription

1 United Nations Conference on Trade and Development Workshop on Agricultural Trade Policy Simulation Model (ATPSM) David Vanzetti Trade Analysis Branch UNCTAD Geneva Jakarta, Indonesia, February 2004

2 Contact details ATPSM Project Coordinator Trade Analysis Branch UNCTAD / DITC Palais des Nations CH-1211 Geneva atpsm@unctad.org david.vanzetti@unctad.org

3 Outline ATPSM Workshop 1. Introduction to ATPSM: Overview, technical description, operation 2. Hands-on training of ATPSM 3. Specific exercises 4. Limitations, refinements, UNCTAD applications

4 ATPSM Documentation Online help from interface Documentation with CD Documentation from website Updates from website This ppt presentaion available on request

5 General Overview: What is ATPSM? Static, deterministic, partial equilibrium Analyse agricultural trade policy issues Quantify economic effects: - tariffs - export subsidies - domestic support - quotas - production shocks Comprehensive database * UNCTAD acknowledges funding from the UK DFID

6 Features Easy to use for and researchers, policymakers and negotiators Graphical user interface On-line help function and handbook available Report writer - Export to Excel

7 Coverage of ATPSM 175 countries EU one region Detailed trade policy data for 141 countries 36 agricultural commodities

8 ATPSM Commodity Aggregation (1) Bovine meat Sheepmeat Pigmeat Poultry Milk, fresh Milk, conc. Butter Cheese Wheat Maize Sorghum Barley Rice Sugar Oil seeds Vegetable oils Pulses Roots, tubers

9 ATPSM Commodity Aggregation (2) Tomatoes Non-tropical fruits Citrus fruits Bananas Other tropical fruits Coffee green bags Coffee roasted Coffee extracts Cocoa beans Cocoa butter Cocoa powder Chocolate Tea Tobacco leaves Cigars Cigarettes Other tobacco - mfr. Cotton linters

10 Data Sources TRAINS (UNCTAD) FAO WTO AMAD (Agricultural Market Access Database)

11 Trade Policies Specified Global import quota Bound in-quota tariff rates Bound out-of-quota tariff rates Applied tariff rates Distribution of quota rents Export subsidies Domestic support Two tier tariff structure

12 Crucial assumptions Two-way trade X=f(S) Armington Quota rents Allocation Distribution of rents Impact on production

13 Trade Policy Questions Impact of reductions in bound out-of-quota tariff rates in all developed countries on - trade flows - export revenues - tariff revenues Impact of reductions in export subsidies on - world market prices - net food importers Impact of possible WTO agreements on developing countries

14 More questions How long to run the model? Can we change the data? Can we change the equations? Do we need expensive software? Who updates the model? Operating the ATPSM

15 Limitations Data quality Allocation of quota rents Bilateral quotas Preferential tariffs Fill rates? Details of ATPSM

16 Outline ATPSM Workshop 1. Introduction to ATPSM: General Overview about the Agricultural Trade Policy Simulation Model 2. Details of ATPSM: Technical description of ATPSM, Assumptions, Equations and Database

17 Details of ATPSM Tariff rate quotas and quota rents Two-way trade Equations and assumptions Domestic support Database

18 Price Quota rents P D t 2 t 1 Quota rent Inquota tariff revenue Over quota tariff revenue P W Q M Imports

19 Quota rents: Assumptions Quotas are always filled Total rents add up to $12 billion Default assumption: Producers in exporting countries receive all quota rents No supply response if quotas are changed, e.g. through change of in-quota tariffs

20 Two-way trade: Volume determination Demand D is determined by the demand elasticity and cross-price demand elasticities Supply S is determined by the supply elasticity and cross-price supply elasticities Two versions to determine imports M and exports X : Standard and Armington Global market clearing (change of imports = change of exports)

21 Two-way trade Price Exports=f(S) Domestic Supply Total supply M=D-S+X P D t 1 Tariff revenue P W M Demand S D Quantity

22 Determination of Imports and Exports Standard : Percentage change of exports equals percentage change of supply / production Imports are the residual (in each country: production+imports=consumption+exports) Armington : Consumers first decide how much to consume and in a second step σ M α m P d how much to buy from abroad = D M α d Pm and from domestic producers Exports are the residual

23 ; 1 ˆ 1 ˆ ˆ 1) 1,,,,,,, = = J j i j r j c j w r j i r c i w i r i i r i t P t P D η η ; 1 ˆ 1 ˆ ˆ 2) 1,,,,,,, = = J j i j r j s w j r j i r i s wi r i i r i t P t P S ε ε ; ˆ ) 3,,, r i r i r i S X X = ; ˆ ˆ ) 4,,,,,, r i r i r i r i r i r i X S S D D M + = 0; ) ( 5) 1 = = N n X n M n Model equations Standard

24 Model equations Armington 1) 2) Dˆ i J ˆ, r = ηi, i, r Pw tc, r + η i i i, j= 1 i j ˆ ˆ J Si, r = εi, i, r P t wi s i, r + εi, j= 1 i j 3) X = M D Dˆ + S Sˆ ; ir, ir, ir, ir, ir, ir, j, r j, r P ˆ P ˆ w j w j t s t c j, r j, r ; ; A ˆ new Ainit A new α m P d 4) Mir, = Dir, Dir, Dir,, where Ay = ; 1+ Anew 1+ Ainit 1+ Anew αd P m y 5) N ( X n M n ) = 0; n= 1 σ ir,

25 Two-way trade: Price determination Heterogeneous products Domestic price is weighted average of import and export prices: t d = (M t m +X t x )/(M+X) Consumer price is weighted average of import and domestic prices: t c = (M t m +S t d )/D Producer price is weighted average of import and domestic prices plus domestic support: t s = (Xt x +S d t d )/S + t d

26 Domestic support What are the production effects of changes in domestic support? Decoupling of domestic support Complex issue: method of administration, effects of direct payments, Assumption here: most of the domestic support is decoupled

27 Welfare Consumer surplus Producer surplus (inc. quota rent) Net government revenue - Tariff revenue - Domestic support expenditure - Export subsidy expenditure -Quota rent

28 Price Welfare W=CS+PS+TR (-DS-ES) Supply Consumer surplus Dead weight losses P D t 1 Producer surplus Tariff revenue P W M Demand S D Quantity

29 Data Sources Applied tariffs: UNCTAD TRAINS Production, trade flows, elasticities, prices: FAO Bound tariff rates, export subsidies: WTO Bound tariff rates, quotas, within-quota tarrifs: AMAD (Agricultural Market Access Database) Domestic support: UNCTAD (de Gorter)

30 Limitations Data quality Allocation of quota rents Bilateral quotas Preferential tariffs Fill rates?

31 Outline ATPSM Workshop 1. Introduction to ATPSM: General Overview about the Agricultural Trade Policy Simulation Model 2. Details of ATPSM: Technical description of ATPSM, Assumptions, Equations and Database 3. Operating the ATPSM: Installation, Setting up Scenarios, Reading and Interpreting the Results

32 Operating the ATPSM Installation - A self installing.exe-file is downloadable - Manual installation possible Programme comes with documentation Graphical user interface Running a scenario Reporting the results Change the data

33 Installing ATPSM Computer requirement PC with + 64MB RAM Any operating system Free disk space of at least 40MB Program installs itself Introduction available on how to install it manually

34 Documentation and graphical user interface Documents delivered with the programme: - Introduction on the ATPSM (Installation, interface) - Handbook on ATPSM (Economic backgroud) - papers about simulating agriculture policy reforms with ATPSM A context-specific online help is available Running a scenario using the menu driven interface

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36 The graphical user interface Title Scenarios Country groups Commodity groups Results Help

37 Scenarios Load Save Name Insert Coverage (countries, commodities) Parameters (See next)

38 Parameters Outquota Inquota Export subsidy Domestic support Import quota Swiss cut {t1=t0*a/(t0+a)} Applied/bound Capture rate (quota rent to exporters)

39 Country Groups User defined Code (3 letters) Name (arbitrary) Insert (new group) Delete (old group) Countries (select/deselect members) Same for commodities

40 Results (1) Scenario Description Report Formula Commodities (by row, column, summed or individual) Countries (by row, column, summed or individual) Decimal places Export As Full screen

41 Results (2) Group commodities Group countries Can alter formula, e.g. divide by

42 Warning Don t aggregate across groups, not mutually exclusive Don t aggregate percentage changes Don t aggregates prices Red is negative (be careful when pasting to Excel)

43 Change the Data Data file: C:\ATPSM\atpsm.mdb Which data are in which sub-file is documented in the Handbook, Part E Open atpsm.mdb with MS Access and change the data while ATPSM is closed Next ATPSM session uses the new data

44 Likely Data Changes Policies Volumes Prices Elasticities Updates from UNCTAD Model recalibrates itself (so M=X, S=D)

45 Switch between Standard and Armington structure (concerning determination of imports and exports) Change the toggle that determines whether the Standard or the Arminton model is used C: /ATPSM/script/initialisedata.ods SC.ARMtoggle=1.0 means Armington model SC.ARMtoggle=0.0 means Standard model

46 Bugs, trips and tips 1. Reporting world prices 2. ODBC error (missing or unlinked atpsm.mdb) 3. No response (incorrect table name) 4. Aggregating percentage data (don t) 5. Too slow (use fewer commodities)

47 Enlarge the possibilities Problem: Negotiators are faster than model development Harbinson proposal: Reduction depends on initial tariff rates (bands) Cancun proposal: Combination of linear cut and Swiss formula C: / ATPSM / script / Variations / Bands or Cancun Copy files in folder and paste in folder «script» Bands: see Introduction to simulate tariff bands Cancun: new out-quota bound tariffs are calculated outside the model and saved in sub-file FinalRate in atpsm.mdb