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Do U.S. Cotton Subsidies Affect Competing Exporters? An Analysis of Import Demand in China

Published online by Cambridge University Press:  26 January 2015

Andrew Muhammad ,
Lihong McPhail  and
James Kiawu
Andrew Muhammad
Affiliation:
U.S. Department of Agriculture, Economic Research Service, Market and Trade Economics Division, Washington, D.C.
Lihong McPhail
Affiliation:
U.S. Department of Agriculture, Economic Research Service, Market and Trade Economics Division, Washington, D.C.
James Kiawu
Affiliation:
U.S. Department of Agriculture, Economic Research Service, Market and Trade Economics Division, Washington, D.C.
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Abstract

We estimate the demand for imported cotton in China and assess the competitiveness of cotton-exporting countries. Given the assertion that developing countries are negatively affected by U.S. cotton subsidies, our focus is the price competition between the United States and competing exporters (Benin, Burkina Faso, Chad, Mali, India, and Uzbekistan). We further project how U.S. programs affect China's imports by country. Results indicate that if U.S. subsidies make other exporting countries worse off, this effect is lessened when global prices respond accordingly. If subsidies are eliminated, China's cotton imports may not fully recover from the temporary spike in global prices.

Keywords

Chinacottonimport demandRotterdam modelsubsidiesUnited StatesWest AfricaF17Q11Q17
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 44 , Issue 2 , May 2012 , pp. 235 - 249
Copyright
Copyright © Southern Agricultural Economics Association 2012

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