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Impact of China's WTO Accession and Bt Cotton Adoption on Chinese and U.S. Cotton Sectors

Cheng Fang, John C. Beghin and Bruce A. Babcock


ABSTRACT

This paper develops a framework to quantify the impact of China’s World Trade Organization (WTO) accession and Bt cotton adoption on Chinese and U.S. cotton sectors. The Chinese cotton sector model has the following components: supply, demand, price linkage, and textiles output equations. The supply side of the model includes 9 regional cotton supply equations. The developed model is connected to the Food and Agricultural Policy Research Institute (FAPRI) modeling system to simulate various scenarios of China’s WTO accession and BT cotton adoption. The results of China’s accession without BT cotton adoption indicate that imports and domestic production of cotton in China and U.S. cotton exports increase with WTO accession. The results of BT cotton adoption without the WTO suggest a significant increase in domestic cotton production and a decrease in cotton imports and exports of U.S. cotton. The results are dominated by the WTO accession under the scenarios of both WTO accession and BT cotton adoption assumption.





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Document last modified May 20, 2002