The WTO, Agricultural Trade Reform and the Environment: Nitrogen and Agro-chemical Indicators for the OECD

The WTO Ministerial Statement of November 2001 mandates work on those situations where reduction of trade restrictions would benefit both trade and the environment. To contribute to such research, we use a modified version of the Global Trade Analysis Project (GTAP) model to estimate for OECD countries' changes in two environmental indicators resulting from simulated trade reforms: the impact on regional nitrogen balances, and associated changes in intensity of agro-chemical use. The trade reforms simulated lead to slightly improved nitrogen balances at the aggregate OECD level, with more ambitious trade reform resulting in a larger aggregate improvement. Most regions with a high initial per hectare nitrogen surplus are expected to experience some improvement in this environmental indicator at the national level. Cropping becomes less intensive in agro-chemical use in Western Europe and Northeast Asia, but more intensive in other OECD countries.