Assessing the environmental impact of liberalising agricultural trade - with special reference to EU-Mercosur

Abstract

A bi-lateral trade agreement between the EU and the South American trading bloc known as Mercosur has been under consideration since 1995, with periodic hiatuses in negotiations since their inception. During the past twelve years there have been concurrent multilateral negotiations taking place under the WTO Doha Development Agenda. This work examines the potential production, trade and environmental outcomes for the EU and Mercosur that could arise under each of the trade negotiations using the Lincoln Trade and Environment Model, a multi-commodity and multi-country partial equilibrium model focused on projecting changes in international markets for agricultural products, and the greenhouse gas and nitrate implications from the outputs of these markets. The Scenarios presented include trade liberalisation, both global and EU/Mercosur specific, those which have been proposed under the Doha Development Agenda ranging around the 2008 Revised Draft Modalities document, and the 2004 and 2006 EU bi-lateral trade offer to Mercosur.