IV 1 V. Global issues and national responses. IV 2 Soil erosion effects of global trade reforms: Indonesia Soil erosion is estimated to cost Indonesia.

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Presentation transcript:

IV 1 V. Global issues and national responses

IV 2 Soil erosion effects of global trade reforms: Indonesia Soil erosion is estimated to cost Indonesia ~$400m/yr – About 0.4% GDP per yr –80% on-site, 20% off-site How is this affected by global trade reform? Strutt (1998) uses GTAP to assess this.

IV 3 Key features of the model Includes variable land between agr and forestry, by region (Java-Bali, Sumatra,OI) Land is also mobile among ag. sectors Cereals (except irr. rice) more erosion-intensive Erosion reduces land quality (on-site effect) and also productivity of some downstream sectors.

IV 4 Policy experiment Uruguay Round trade reforms: –17 commodity groups, including: Rice, wheat, coarse grains,other crops Wood & paper products Textiles & apparel (NB: MFA) –6 country groups: Indonesia, industrialized APEC, developing APEC, EU, China, ROW NB: China assumed not to be a signatory

IV 5

6

7 Conclusions With global adoption of Uruguay Round trade reforms, –Production & erosion rise in coarse grains sector, but fall in non-grain & other sectors. –Net land productivity gain is positive –Off site effect changes are very small –Total effects are tiny in relation to total $ gain.