Agriculture Reference
In-Depth Information
tariff reductions will promote production in some sectors quite strongly,
production factors will be drawn away from the milk sector; as a result,
the production of milk will fall by 0.03 per cent due to the relocation of
producton factors.
The economic impacts of the full implementation of the ACFTA
The macro effects of the full implementation of the ACFTA are much
larger than those of the EHP. The increases in real GDP and social welfare
in the ACFTA signatories are much larger than those in the EHP (Table
13.7). Welfare in all ACFTA signatories increases by US$1.8 billion, with
US$451 million in China,
US$1.25 bllon
in ASEAN+5 and US$92 million in
the new ASEAN members. ASEAN+5 is the largest beneficiary in absolute
and relatve terms. The negatve mpacts on the rest of the world are also
more significant than those of the EHP. The social welfare of other regions
declnes by US$1.9 bllon. The global welfare loss due to the creaton of
the ASEAN-China Free Trade Area is US$115 million.
The impacts on the returns to primary factors in ACFTA signatories
are substantial. As shown in Table 13.7, all the returns to primary factors
increase in China and in the new ASEAN members. As for ASEAN+5, returns
to labour and captal ncrease whle returns to land declne. Land s the
sluggish factor in the GTAP model, so its price can vary across sectors
(Hertel 1997). The land prices reported in Table 13.7 reflect the aggregate
effects of polcy changes on land use. Because the non-agrcultural sectors
in ASEAN+5 grow so strongly and draw labour and capital away from
agricultural sectors, the demand for land declines. As a result, land prices
drop after the full implementation of the ACFTA. The returns to primary
factors n the other regons declne margnally.
The results indicate that there will be trade gains for all ACFTA
sgnatores. Trade creaton wll easly offset trade dverson. As shown n
Tables 13.8 and 13.9, total exports and imports increase by US$6.5 billion
and US$6.8 billion, respectively, for China, by US$4.7 billion and US$4.9
billion for ASEAN+5 and by US$153 million and US$203 million for the new
ASEAN members. As a whole, the implementation of the ACFTA by 2010
will promote global exports of US$8.2 billion.
The effects on exports and mports vary remarkably across sectors. Whle
