Analysis Of The Impact Of China's Agricultural Trade Policy Changes Against The Backdrop Of Trade Liberalization

In the area of international trade, agricultural trade is in a very special status. As agriculture is associated with food security, environmental protection, domestic politics, and many other factors, in the GATT era, the international trade of agricultural products in international trade has been out of the liberalization of the system, although the trade liberalization process continued to deepen. In the late 1980s, growing protectionism in agricultural trade becomes increasingly intense, such as the agricultural export subsidies war between the United States and Europe. Until 1986, during the Uruguay Round of multilateral trade negotiations, agricultural trade has finally been formally included in the scope of the negotiations. So, the Uruguay Round "agricultural agreement" marked the breakthrough of agricultural trade liberalization negotiations. Since then, agricultural trade is no longer an exception to the field of trade liberalization, formulation and subsequent adjustments of the national agricultural trade policy has been further attention and development in the multilateral trade negotiations.November 11,2001, China entered the WTO. As a formal member of the WTO, China must fulfill affirmatory obligations of reduction of the trade and non-trade barriers reduction. China's Agricultural trade policy would be adjusted according to the WTO agreement: a lot of the agricultural border protection measures would be cancelled, and agricultural market access would be gradually expanded. At the same time, the existing domestic agricultural support measures inconsistent with the WTO rules also need to be adjusted. Especially, the most important means of support measures- price support policy will be strictly limited. A series of issues need to be concerned with to achieve the goal above: China's agricultural trade policy had been made notable changes after entering the WTO. What are these changes? What will happen to China's agricultural development? What will happen to peasants' interests? Are there still problems in China's current trade policy formulation and adjustment process? What are them? After entering the WTO, China fully participated in the new round of WTO negotiations on agriculture. In this round, negotiating parties advanced further liberalization of agricultural trade policies and reduction schemes. What kind of scheme should China choose? This problem should also be concentrated on. After reviewing the related literature and theory, this study used a GTAP model and the latest updated version of GTAP₆ database to analyze the issues above. On this basis, further use of Holt-Winters extrapolation method to forecast GDP, population and other exogenous changes in macroeconomic forecasts. What we do above is to establish a dynamic recurrent method to improve the limitations of general equilibrium under the relatively static. In addition, according to the ways brought forward by Elbehri and Pearson in 2002, this study will adjust the model of the structure and data and enable it to better simulate the impact of the changes caused by tariff quota, thereby to more accurately reflect the impact of changes in trade policy mechanism.The model was firstly used to analyze the impact on cotton market and related industries of the change in cotton market access, and we also analyzed the impact on farmers Income and employment caused by this agricultural trade policy changes. The result showed that positively performance the reduction obligations in accordance with WTO commitments to will be able to better promote the interests of all parties. Negative impact on the cotton industry and cotton growers' interests lied in that high out-quota tariff was not adopted in accordance with WTO commitment instead of low tariff rate the same as out-quota tariff rate. The results also showed that only strict compliance of the high out-quota tariffs could the government control cotton's import and export market effectively through quota limitation. Since most of the agricultural sectors shocked are in accordance with the tariff quota management, therefore, the conclusion of the study is worth china learning in the future.Secondly, the study also simulated the impact on food production, trade and fanners produce and employment of domestic foodstuff supporting policy after entering the WTO. The result showed that the implementation of domestic grain supporting policy promoted china's grain production, reduced China's dependence on food imports and protected China's food security. At the same time, the implementation of the policy played a positive role in increasing the income of the farmers and agricultural employment. Strengthening direct subsidies to grain in the future can significantly increase the income of peasants, but the grain output and farmers' role in promoting employment is not obvious. On the contrary, the future to enhance grain input subsidy policies can significantly promote grain production and farmers' employment, but fanners' role in promoting income is not obvious. Thereby, grain input subsidy policies also could not completely replace the price support policy or direct subsidies.Finally, the study made a review and summary for the initial results of the Doha Round negotiations on agriculture (including the results achieved in market access, domestic support and export subsidies). On this basis, this study simulated impact of the Doha Round of China's agricultural production, trade, farmers' income and employment. To do this work, we developed three scenarios to the according to different reduction intensity posed in this new round negotiation (moderate scenario, middle scenario and radical scenario). The results showed: First, China's imports and exports of agricultural products have been improved in three scenarios and the growth rate of exports and imports increase more when trade barriers decrease more. However, the growth rate of agricultural imports is far below that of exports, and this shows that the success of the Doha Round negotiations will enhance China's international competitiveness of agricultural products. As the growth rate and absolute number of most agricultural export is not great, it is impossible to upgrade the level of China's comprehensive of agricultural products only rely on other countries to reduce trade barriers. Secondly, in the three scenarios, the prices of agricultural products in general have declined, but not as much less, so what consumers gain is finite. At the same time, agricultural output will be adjusted in accordance with the comparative advantages, but agricultural output increase or decease slightly, so the Doha Round negotiations will not influence China's agricultural production too much. Third, in the three scenarios, the farmers' total income increases, but mainly concentrated in food, fruits, vegetables and meat industries. At the same time, the farmers' income changes will bring farmers' employment in the corresponding changes. So the Doha Round negotiations will promote the income and employment of farmers, but the effect is not clear too. Generally speaking, China's agricultural development and farmers will benefit more when the trade barriers reduce more, but the most positive influence the Doha Round negotiations on agriculture brings to China is Comparative advantage in agricultural production and trade will play a greater role in the process, and this is conducive to the restructuring of agriculture as well as to configuration agricultural resources c effectively.Based on the conclusions above, this study put forward the corresponding recommendations for the reorientation of China's future agricultural trade policy so as to better promote the interests of farmers and agricultural development.