@article{Runge:14449,
      recid = {14449},
      author = {Runge, C. Ford},
      title = {ENVIRONMENTAL EFFECTS OF TRADE IN THE AGRICULTURAL SECTOR:  A CASE STUDY},
      address = {1992},
      number = {1687-2016-137212},
      series = {Working Paper P92-1},
      pages = {69},
      year = {1992},
      abstract = {Agriculture has been at the center of conflicts over world  trade from the beginning in 1986 of the eighth, Uruguay  Round, of multilateral trade negotiations.  Yet it is only  in the final phases of the Round that linkages from trade  to the environment have come to the fore.  In this paper,  the specific linkages from trade to the environment in the  agricultural sector are developed.  The impacts of trade  flows and policies on environmental quality in agriculture  have features which make them unusually difficult to  resolve.  In many respects, the same domestic agricultural  policies at the root of trade distortions also encourage  environmental damages.  Hence, reforming these domestic and  trade policies would be a partial, though not a complete,  step in the direction of greater environmental benefits.  A  complete set of policies will require targeted  environmental interventions as well.

Market failures in  agricultural production and consumption have widespread  effects on soil, water, human health, and natural  ecosystems which are difficult to monitor and therefore to  estimate.  These market failures are generally reinforced  by government policies which distort the prices of  agricultural products and inputs (water, fertilizers,  pesticides).  These distortions occur in agriculture to a  greater extent than in many sectors of both developed and  developing countries.  Trade flows and policies are a  direct result of these domestic distortions.

This case  study will consider market failures with adverse  environmental impacts in agriculture and their interaction  with failures in agricultural trade policy in developed and  developing countries.  Section II develops a theoretical  perspective on market and government failures in  agriculture.  In it, a simple model is discussed which  emphasizes the distinction between the welfare effects of  trade liberalization with and without appropriately  targeted environmental policies.  Section III provides some  concrete examples of trade flows in agriculture and their  environmental impacts in developed and developing  countries, and analyzes the domestic policies at the root  of distortions in agricultural trade.  Section IV considers  the likely impact of agricultural trade liberalization on  market failures with adverse environmental effects, and the  need to integrate environmental and trade policy reforms.   Section V discusses the relationship between trade and  environmental policy instruments in this context, and  proposes some principles to guide trade and environmental  policy in the agricultural sector.  Section VI offers a  summary and some proposed guidelines for the agricultural  sector.},
      url = {http://ageconsearch.umn.edu/record/14449},
      doi = {https://doi.org/10.22004/ag.econ.14449},
}