THE IMPLICATIONS OF THE WTO NEGOTIATIONS ON THE CANADIAN CHICKEN MARKET: TWO REPRESENTATIONS OF CHICKEN AND STOCHASTIC WORLD PRICES

Current Doha Development Agenda (DDA) World Trade Organisation negotiations include proposals that would affect the trade barriers that protect Canada’s chicken producers from foreign competition. This research analyses the effects of the most recent proposals to emerge from the DDA negotiation on Canada’s chicken industry. We develop a partial-equilibrium model that generates welfare effects for the Canadian chicken industry supply chain. We also introduce stochastic prices to evaluate the effects of world price instability on the Canadian chicken industry. The model is also adapted to represent chicken as two distinct products; white meat and dark meat. Simulation results suggest that the welfare effects of the DDA proposals on the Canadian chicken industry would be small, providing that chicken receives the sensitive products designation. Liberalisation leads to higher total welfare in the chicken industry, which is accounted for by consumer welfare that increases by a larger amount than producer welfare decreases. These results hold across models that incorporate risk and that differentiate products.