Research Reports
Measures to respond to the Bangkok Agreement on agriculture
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AuthorEor, Myongkeun
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Publication Date2003.08.01
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Original
SUMMARY
Agricultural Sector's Responses to the Bangkok Agreement
1. Objectives of the Study
The objectives of this study are to review the request list presented by member countries at the Third Round of Bangkok Agreement and to forecast its impacts on agricultural sector to provide strategic responses and policies. Moreover, in the circumstance of increasing pressures to offer agricultural products in the Third Round of Bangkok Agreement, this study searched for all possible measures to adjust domestic agriculture to the changing external conditions.
2. Contents and Methodologies
Major contents of this study are divided into three parts: outlook on the Bangkok Agreement followed by analyses of the Third Round and Request List to implement the measurement of the impacts on agricultural imports.
In order to determine the possibility of concession of agricultural products in the Bangkok Agreement, this study adapted the concept of "Intra-Industry Trade." Then to measure the trade diversion effects on agricultural products, we employed Potential Bilateral Trade(PBT) approach. Because of the data availability, empirical measurement was limited on the bilateral trade between Korea and China.
3. Major Findings
(1) Import share of the 122 commodities in the Request List
China requested 122 agricultural commodities (HS 6 digit) to Korea. Import share of those items in the Korea-China agricultural trade was 66 percent in 2002 which was reduced from 74 percent in 2000. On the other hand, Export share of the Chinese interest item was 53 percent in 2002 showing rapid increase from 30 percent in 2000. Considering that the share of those products are nearly 80 percent of Korean agricultural product, we need to be careful in providing offer of agricultural products in the bangkok Agreement.
(2) Possibilities of Intra-Industry Trade
Trade Specialized Indices(TSI) for 35 important agricultural products selected from the request list were measured during the period of 2000 and 2002. Because of the competitive agricultural structure of Korea and China, the results show that there were only limited possibilities for the Intra-Industry Trade between Korea and China in agricultural sector. This can be interpreted that Chinese agricultural products may dominate Korean market rather than expand its market share if all the barriers to trade were abolished.
(3) Potential Bilateral Trade
Potential Bilateral Trade(PBT) with China for 122 agricultural products were measured. PBT, which may be interpreted as a maximum level of the trade diversion effect was US$ 1.6 billion in total, which exceeded current total agricultural import from China. The biggest PBT was US$ 345 million for corn (HS100590), followed by US$ 250 million for food preparations (HS210690) and US$ 200 for tobacco(HS240220).
e-mail Address: myongeor@krei.re.kr, skchoi@krei.re.kr
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