We estimate source-differentiated wine demand in China using the absolute price version of the Rotterdam demand system. Within the last decade, China has gone from obscurity to an important participant in global wine trade. The continual growth of Chinese wine imports suggests that a one-time structural shift approach may not fully capture how consumption patterns or demand preferences have changed over time. Thus, a rolling or moving regression procedure is used to account for continual adjustments in import demand patterns and to evaluate overall parameter instability. Our results confirm that Chinese consumers hold French wine in high regard and that French wine demand has consistently increased over the last decade, more than any other exporting source. Consumers in China have gone from allocating about 1/3 to over 1/2 of every dollar to French wine and the expenditure elasticity for French wine mostly increased while the market was expanding. Although Australian wine has a very solid standing in the Chinese market, results suggest that its market share will likely remain unchanged. Marginal budget share and expenditure elasticity estimates indicate that Australia will continue to account for about 20 per cent of the foreign wine market in China.

The special safeguard mechanism-both quantity-and price-based-was key in the July 2008 failure to reach agreement in the World Trade Organization negotiations under the Doha Development Agenda. A stochastic simulation model of the world wheat market is used to investigate the effects of the special safeguard mechanism. As expected, the quantity-based safeguard is found to reduce imports, raise domestic prices, and boost mean domestic production in the countries that implement it. However, rather than insulating developing countries in those regions from price volatility, the quantity-based safeguard increases domestic price volatility, largely by restricting imports when domestic output is low and prices are high. The quantitybased safeguard shrinks average wheat imports nearly 50 percent in some regions, and global wheat trade falls by 4.7 percent. The price-based safeguard discriminates against lower price exporters and contributes to producer price instability.

This study investigates the long-term adjustments to drought by crop and livestock sectors using a dynamic partial equilibrium quarterly model of the U.S. agricultural economy. Results show that short-term drought effects including increases in crop and forage prices are in tandem with decreased live cattle prices resulting from drought-induced beef cattle herd liquidation. Crop price increases in the long run cause livestock inventory reductions, leading to fewer animals moving through the U.S. meat supply chain and increased livestock prices. Longer-term market adjustments cause a significant decrease in consumer surplus, and prolonged drought amplifies and extends the model-predicted results.

The Special Safeguard Mechanism (SSM) was a key issue in the July 2008 failure to reach agreement in the WTO negotiations under the Doha Development Agenda. It includes both price (P-SSM) and quantity-triggered measures (Q-SSM). This paper uses a stochastic simulation model of the world wheat market to investigate the effects of policy makers implementing policies based on the SSM rules. As expected, implementation of the Q-SSM is found to reduce imports, raise domestic prices, and boost mean domestic production in the SSM regions. However, rather than insulating countries that use it from price volatility, it would actually increase domestic price volatility in developing countries, largely by restricting imports when domestic output is low and prices high. We estimate that implementation of the Q-SSM would shrink average wheat imports by nearly 50% in some regions, with world wheat trade falling by 4.7%. The P-SSM is discriminatory against low price, developing country exporters and tends to contribute to additional producer price instability.