Permalink : http://hdl.handle.net/2115/63050

The purpose of this paper is to assess the domestic impacts of GATT Agreement on Agriculture with respect to Japanese livestock and dairy industries. For this aim we developed a Japanese 26-sector domestic Applied General Equilibrium Model, which is based on the recent available Input-Output Table (1990). In order to conduct simulations, the change of agricultural import quantity under the GATT Agreement is required. Since the GATT Agreement on Agriculture is applied to more than 110 countries over the world, it is quite difficult to assess the GATT Agreement on Agriculture from a worldwide perspective. Thus we employ an outcome from the FAPRI/CARD (Iowa State University) International Agricultural Commodity Trade Model, which is one of the standard international agricultural trade models. From our simulation, the impact of trade liberalization with respect to dairy industry is not so influential to domestic economy as it is the case of livestock under the GATT Agreement. Thus when we consider these two industries simultaneously, the effects are almost the same as that of livestock. The notable simulation results are as follows: (1) The output levels, especially, of manufacture and service sectors increase via the re-allocation of primary factors. (2) While the labor productivity in all sectors increases, the capital productivity in noncultivate sectors decreases. These two results cannot be obtained without Applied General Equilibrium Approach. (3) Moreover the employment on livestock industry declines about 6%. We can infer that the released labor from this industry will be employed in manufacturing sector under the condition that there is no adjustment cost.