Role of trade agreements in the global cereal market and implications for virtual water flows

Abstract

Understanding the dynamics of food trade, which involves a corresponding virtual trade in environmental resources, is relevant for its effects on the environment. Among the socioeconomic factors driving the international food market, trade agreements play a significant yet poorly understood role in facilitating access to worldwide trade. Focusing on the global trade of grain from 1993 to 2015, we investigate the role of trade agreements in activating new linkages and increasing traded volumes and their environmental implications. Through a data-driven approach, we show that the activation of a trade agreement among countries induces a more than six-fold increase in the probability of establishing a new link. Also, the presence of a trade agreement over time, not just its activation, relates to a more stable market since it reduces the probability of link deactivation by more than half. The trade links covered by agreements show larger flows and smoother inter-annual fluctuations. Furthermore, trade agreements encourage the development of more water-efficient flows by stimulating the exchange of crops with high water productivity values. The average economic water productivity of crops traded under trade agreements increases by 62% when considering total virtual water and even by 93% when focusing on blue water.

Unraveling the key drivers of community composition in the agri-food trade network

“…Regarding sustainability factors, water use efficiency (WUE) shows an increasing importance in our results. For example, as pointed out in the literature 29 , trade agreements favour goods with higher water productivity. Differences between trade links covered by agreements and those not covered are amplified when focusing on blue water.…”

“…For example, trade agreements play a significant role in global food trade dynamics, activating new links and increasing traded volumes. Such agreements contribute to a more stable market and carry essential environmental implications in the realm of food trade 28 , 29 . Moreover, the study of drivers in global food trade can inform efforts to promote sustainable agriculture practices, reduce waste and spoilage, and ensure equitable access to nutritious food for all 30 , 31 .…”

Agricultural socialized services and Chinese food security: examining the threshold effect of land tenure change

“…Fifthly, some scholars also explore the relationship between grain yields and rural development, poverty reduction, and the role of rural infrastructure, education, and health in improving productivity (Wang et al, 2015;Ge et al, 2018). Finally, market access and international trade are examined to understand the effects on domestic grain prices and production (Chan, 2022;Falsetti et al, 2022). This study examines the impact of the development level of ASS on grain production by analysing provincial panel data from China between 2011 and 2020, an area that has received little attention in previous research.…”

Mapping the virtual water trade in water-scarce basin: an environmentally extended input-output analysis in the Yellow River Basin of China

“…Studies have systematically analyzed VWT patterns based on multi-regional input-output models (Graham et al 2020;Islam et al 2021). In international trade, multi-regional input-output tables were constructed using global trade data, and a global VWT network was developed by combining sectoral water consumption data (Falsetti et al, 2022;Mekonnen & Hoekstra, 2020). The study found that developing countries undertake many waterintensive products, sacrificing water resources in exchange for economic rewards (Maroufpoor et al 2021).…”