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Historic, Archive Document Do not assume content reflects current scientific knowledge, policies, or practices. “*, Z\N\ ———— LYOA X SS EC 1992 ag}e yilexelivelatwceys Lelio Mgme leye me /ste| yNeol((er0]}(0]ol m icel(e= Proceedings For more informa’ Contact David R. Ke ent of Agriculture, Room. --., 88. It’s Easy To Order Another Copy! Just dial 1-800-999-6779. Toll free in the United States and Canada. Other areas, please call 1-301-725-7937. Ask for EC 1992: Implications for World Food and Agricultural Trade (AGES 9133). The cost is $14.00 per copy. For non-U.S. addresses (includes Canada), add 25 percent. Charge your purchase to your VISA or MasterCard, or we can bill you. Or send a check or purchase order (made payable to ERS-NASS) to: ERS-NASS P.O. Box 1608 Rockville, MD 20849-1608. We'll fill your order by first-class mail. U.S. Department of Agriculture Economic Research Service 1301 New York Avenue, NW. Washington, DC 20005-4788 EC 1992: Implications for World Food and Agricultural Trade. David R. Kelch, editor. Agriculture and Trade Analysis Division, Economic Research Service, U.S. Department of Agriculture. Staff report number AGES 9133. Abstract The European Community (EC) has launched its quest for a border-free Europe as envisioned in 1957 in the Treaty of Rome. On January 1, 1993, all impediments to the free movement of goods, services, capital, and people inside the EC are to be eliminated. The elimination of internal trade barriers in the EC will have direct and indirect effects on the demand, supply, and trade of the EC’s food and agricultural sector. This volume addresses these implications in seven separate chapters, organized by theme. The first three chapters emphasize the effects of fiscal, physical, and technical changes that EC 1992 requires, with special emphasis on the food industry. The fourth and fifth chapters focus on the potential effects on the Common Agricultural Policy (CAP), with a special paper dedicated to the effects of German unification on the CAP. The last two chapters concern the regional implications for world food and agricultural trade. Keywords: European Economic Community, Common Agricultural Policy, economic integration, harmonization, sanitary and phytosanitary regulations, value-added taxes, agricultural trade, agrimonetary, EC commodity quotas, the environment. Note: The views expressed herein are those of the contributors and do not necessarily represent the views of the U.S. Department of Agriculture. (U.S. DEPT. OF AGRICULTURE |N ATIONAL AGRICULTURpA L LIBRAR Foe ny | MAR 2.0 1992 4 4’ Washington, DC 20005-4788 October 1991 Acknowledgments Without the foresight of the Administrator of ERS John E. Lee Jr., and the financial support provided by the then Director of ATAD, T. Kelley White, neither the conference in November of 1990 nor this monograph would have come to fruition. William T. Coyle, Chief of the Developed Market Economies Branch, provided constant financial, administrative, and intellectual support throughout the duration of the project and contributed as a reviewer. Walter Gardiner, Leader of the Western Europe Section, contributed as an author and reviewer and accepted a heavier workload so that the conference and monograph could be completed. Terri Raney helped to plan the conference, contributed two papers as an author, and reviewed manuscripts. Tim Josling was an excellent advisor, author, and collaborator from the beginning. Special thanks also go to Wilhelm Henrichsmeyer who contributed far more than required in the cooperative agreement. Dennis Henderson and Chuck Handy were responsible for the EC 1992 Task Force of the NC-194 committee that provided excellent contributions to the conference and to this monograph. Teri Thrash, the technical editor of the project, went far beyond her job description in order to shape papers from 7 different institutions, and different software packages, into a uniform and appealing format for the reader. Jim Sayre gave the EC 1992 project special consideration in allocating his scarce resources among the many manuscripts in his shop. Dee Midgette contributed beyond her official responsibilities in order to finalize the text. Michael Lopez deserves special thanks for his thorough reviews, useful suggestions, and his indispensable expertise in formatting tables. Ket Dolan prepared the majority of the more than 100 tables and performed admirably in what was for her a new position. Special mention should also go to Carol Stillwagon, who prepared the charts in a professional manner, and to Mike Price, whose FAPSIM model was used for the U.S. estimates in the paper by Howard McDowell. Appreciation for contributions to the preparation of the manuscript is also extended to Margaret Summers, Jennifer Braxton, and Wynette Phillips. Alan Webb, Jim Stout, and Mark Lundell reviewed manuscripts. Lindsay Mann’s preparation of materials for the November 1990 conference was indispensable as was his advice on organization. Jessie Pease also provided excellent assistance in the organization and management of the November 1990 conference and was in turn assisted most ably by Lamoine Evans and Wilma Davis. Contents Page Introduction The Role of Agriculture in European Unification 1 David R. Kelch Chapter 1: The Effects of Reforming Fiscal Barriers Dismantling the EC’s Agrimonetary System: Effects on European Agriculture 7 Timothy E. Josling and Walter H. Gardiner Harmonization of Indirect Taxes in the EC and its Implications for Agriculture zl H. Guyomard and L.P. Mahé Chapter 2: The Effects of Changing Technical Barriers EC 1992 Harmonization: Issues for Agricultural Trade 27 David Kelch and Ruth Elleson The Implications of the EC Single Market for Agricultural Input Industries 61 Carla Henry The EC Single Market Program Effects on Trade in Animal Products qT Kenneth W. Forsythe, Jr., Maury E. Bredahl, Philip C. Abbott, and Alejandro Reca Chapter 3: The Effects of 1992 on the Processed Food Industry An Exploration of the Economic Implications of Mutual Recognition in the Food Sector o7 Jim Burns and Alan Swinbank EC 1992 Market Imperfections and Their Implications for the Food Sector 109 Ian M. Sheldon and Harald von Witzke Implications of a Single EC Market for the U.S. Food Manufacturing Sector 121 Charles R. Handy and Dennis R. Henderson Chapter 4: European Agriculture after 1992--Farm Policy Environmental Considerations of the Single European Act 145 James A. Tobey and David E. Ervin Implications of the Single Market Program for National Production Quotas 153 on Milk and Sugar Steven A. Neff, Dale J. Leuck, and Timothy E. Josling Page Chapter 5: European Agriculture after 1992--Structure Abolishing Green Rates: The Effects on Cereals, Sugar, and Oilseeds 169 in West Germany Donald F. Larson, Simon Glance, Brent Borrell, Merlinda Ingco, and Jonathan Coleman The Effects of the Integration of East Germany on the CAP: First Calculations 187 and Indications Wilhelm Henrichsmeyer Cross-Country Comparisons of Cost-Efficiency in EC Agriculture 195 Eldon Ball, Hyunok Lee, and Agapi Somwaru Chapter 6: Developing and Centrally Planned Economies after 1992 Trade Implications of EC 1992 for a Reforming Eastern Europe and Soviet Union 205 Robert B. Koopman and Nancy J. Cochrane European Community Trade with African, Caribbean, Pacific, and Other 223 Developing Countries Liana Neff and Terri Raney Chapter 7: World Agricultural Trade after 1992--Developed Market Economies The Single European Market: Implications for European Community Trade 233 Tern Raney Implications of EC 1992 for U.S. Agricultural Commodity Trade 243 Howard McDowell EC Agricultural Trade with the Developed Pacific Rim: Implications of EC 1992 255 Pacific Rim Section, Developed Market Economies Branch, Agriculture and Trade Analysis Division EC 1992: Turning Point for European Free Trade Association? ea | Mary Lisa Madell Summary and Post-Conference Update 285 Introduction The Role of Agriculture in European Unification David R. Kelch, volume editor eA ee “ine Se6 ” t=we: Phe Ete: ee ovum inor Gix; aia toda feedliaeiee! sed ie | ee oo 2 eee tap Bo, i as‘ 5 44h vu y rotnubo ta Hwan) Nee wih wh cat vs(ley eana ie ' * <ea e — ~ a