Lesson 3.1: Trade Liberalization

Application of the SEAMLESS-IF model chain to assess market level economic policies: effects of WTO trade liberalization on Europe
Icône de l'outil pédagogique Authors

Marcel Adenauer, Marijke Kuiper, Kamel Louhichi

Icône de l'outil pédagogique Definition of the application

An application in SEAMLESS-IF is the analysis of a set of realistic scenarios derived from economic, policy and technological changes. The application is first determined by the scale at which the policy is assessed (which can reach from field to global level), which determines the model chain to be used. Then the scenarios to be assessed are translated into a set of experiments (runs of the model chain). The experiments define external driving forces, the biophysical context and policy parameters.

In the practical illustration ‘Trade Liberalization: G20 proposal’ the effect of agricultural policies on agricultural markets is analysed. We focus at EU market level and at economic policies (which contrasts with the focus on regional level and environmental policies in the Nitrate Directive example). The analysis centres around the effects that price changes exert on production of agricultural commodities at different levels (from farm type to global markets) and the changes in welfare suffered by consumers and producers as well as environmental effects.

Focusing on economic policies we keep the biophysical context fixed, i.e. we assume that only the currently used technologies are available. In terms of driving forces, we use the standard SEAMLESS baseline, which accounts for developments between the base year (2003) and the simulation year (2013) that occur irrespective of the policy scenario being considered.

Although the G20 application focuses on market level, we are also interested in changes occurring at regional level. Ideally, we would use the full FSSIM – EXPAMOD – SEAMCAP –FSSIM model chain (i.e., farm model – extrapolation – market model). However, at the time of writing only FSSIM and EXPAMOD were operational, restricting us to a top-down SEAMCAP – FSSIM analysis.

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