IMPACT ASSESSMENT OF THE MULTILATERAL AGRICULTURAL TRADE NEGOTIATIONS ON CEMAC COUNTRIES By: Ernest BAMOU & Jean Pierre TCHANOU UNCTAD workshop on Trade and Poverty. Dar-Es-Salaam, Tanzania, November 2007

OUTLINE Research question; Importance of the question; Choice of the methodology; Choice of data; Modalities simulated Main results; Policy implications; Limitations and research areas.

RESEARCH QUESTION What are the potential impacts of the multilateral agricultural trade negotiations on the agricultural production and trade, government revenue and the population welfare of the Member Countries of the Central African Economic and Monetary Community (CEMAC)?

WHY THE QUESTION IS IMPORTANT? (1) As a Community, all CEMAC Member States have to coordinate their negotiation positions The implementation and impact of trade agreements depends on the development level of countries; The impact of agreements on the performance of signatory countries is closely determined by the volume of trade, factor endowments, fiscal system etc., which are specific to each country. The impact of agreements on the performance of signatory countries is closely determined by the volume of trade, factor endowments, fiscal system etc., which are specific to each country.

WHY THE QUESTION IS IMPORTANT? (2) Although priority of all CEMAC countries, engaged in poverty reduction strategies, is to promote rapid and sustainable economic growth and their interests in the agricultural trade negotiations are to retain appropriate measure of protection of their economies and eliminate or reduce external market access barriers and domestic exports supply constraints, Each government need to know how the negotiation issues will affect its own economy, in view to take an active part in the sub-region coordination of positions process and, finally in the negotiations them selves.

DETERMINANTS OF THE CHOICE OF THE METHODOLOGY ISSUES ANALYZED Market access (cut in tariffs, because agricultural trade is mostly protected by them); Export subsidies (elimination) Domestic support (reduce trade- distorting) DESIRED INDICATORS Growth (production) Trade (imports, exports and balance of trade) Consumption Government revenues (fiscal revenue) Population welfare (consumer and producer surplus) CHANNEL OF TRANSMISSION (prices) DATA AVAILABILITY

WHY ATPSM INSTEAD OF COMPUTABLE GENERAL EQUILIBRIUM (CGE) MODEL? CONSTRAINTS OF APPLYING CGE Data not available for all countries; Time constraint to build the model, even data were available; Expertise constraint. ADVANTAGES OF ATPSM The desired analysis framework is considered in the model; The model is available; Data are available for all countries; Results are given in the desired dimensions (product and country levels)

CHOICE OF DATA The multi-country character of the research and the need of disaggregating the results into specific products and countries Data which are Coherent and Consistent [Combination of the United Nation Trade data bases (Trains) and FAO data base]

RESULTS’ DETERMINANTS ‘Knowing that many decisional models are ‘Garbage In-Garbage Out’ specific, results depends among others, to the modalities simulated. The simulated modalities most by closely linked with the research question and the issues analyzed.

MODALITIES SIMULATED Simulation of the alternative proposed tariff reduction modalities [average (Sim. 1) and minimal (Sim. 2)]; Simulation of the SDT of CEMAC countries (Sim. 3 and Sim. 4); Simulation of reduction in export subsidies (Sim. 5); Simulation of reduction of domestic support by DCs (Sim. 6); Simulation of the elimination of quotas by EU (Sim. 7).

MAIN RESULTS Despite the SDT and the consideration of special products, the tariff reduction will lead to a net deterioration of the CEMAC population’s total welfare; The reduction of agricultural subsidies and domestic supports by trade partners shall further deteriorate consumer surplus and, consequently, undermine food security in the sub-region; The supply constraints are the main cause of this poor exploitation of market access opportunities offered by these modalities; The differential impacts of negotiations modalities on CEMAC countries recommend a step-by-step approach of negotiations, specific to each country.

POLICY IMPLICATIONS Bind the unilateral liberalization efforts to request for more SDT in the commitments implementation; Require financial compensations and oriented them towards the restructuring of economies of the sub-region in view to render them more competitive; The regional integration frame still appropriate for an adequate scheduling of complementary, compensatory and institutional measures that would help mitigate the nefarious effects of the agricultural trade liberalisation.

LIMITATIONS & RESEARCH AREAS The lack of linkages with the other sectors and actors recommended a more general model to capture the spillover effects of sectors and actors; An in-depth analysis of the sub-region export supply capacity constraints is required to well understand the reasons of the poor exploitation by the sub-region countries of the potential market access opportunities offered by the multilateral agricultural trade negotiations; Export diversification use to be cited as one way for LDCs, including the sub-region countries, to capitalize the market access opportunities offered by the multilateral agricultural trade negotiations. For the success of such policy, an analysis of the directions, in term of products and markets, of the diversification process of the sub-region is indispensable.

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