Permalink : http://hdl.handle.net/2115/37278

The purpose of this paper is to evaluate the potential economic impact and the potential impact of nitrogen pollution from agriculture caused by agricultural trade liberalization under the Japan-Australia-New Zealand Free Trade Agreement (JANFTA),using the Global Trade Analysis Project (GTAP) model (Hertel, 1997)and the OECD Nitrogen Balance Database (OECD, 2001). We evaluate the potential economic and nitrogen impact caused by the JANFTA using the GTAP model and the OECD Nitrogen Balance Database (Rae and Strutt 2004, 2007). First, the GTAP model is used to estimate the changes in economic activities, such as agricultural production, caused by the JANFTA. Second, the GTAP results and the OECD Nitrogen Balance Database are used to estimate the potential impact of nitrogen pollution from agriculture caused by the JANFTA. The GTAP results show that farm outputs decrease while the real GDP slightly increases in Japan. Farm production of most commodities declines in Japan, while farm production in Australia and New Zealand exhibits some expansion. The nitrogen balance results show that the proposed JANFTA would have a comparatively greater impact on the nitrogen pollution from agriculture in Japan than the increase in the real GDP in Japan. In percentage terms, the decline in farm output would be larger than the decline in nitrogen pollution from agriculture in Japan.