AGFOODTRADE · NEW ISSUES IN AGRICULTURAL, FOOD AND BIOENERGY TRADE

International trade reflects complex dynamic processes driven by demographic, socio-economic, technological and political changes. Therefore, future evolution of world markets is highly uncertain. The project builds on past research but emphasizes issues usually overlooked by standard assessments of trade liberalization such as: • the impact of demand from energy markets which could affect agriculture and reverse the decline of real farm product prices; • the demographic changes, which in some developing and transition countries modify the demand for food, especially that for industrial food processing; • the concentration of firms in many global markets, which could modify the expected size and distribution of gains from trade liberalization among stakeholders; • the impact of trade liberalization on price volatility, which is a key concern but remains to be thoroughly evaluated; • the growing importance of sanitary and technical measures and their potential impact on food security, health issues, and trade. AGFOODTRADE helps answer the following questions: what are major trends and driving forces affecting world trade? What is their impact and how should trade policies deal with these processes in the future? A set of scenarios will be: a) assessed by analysing trends of a selection of indicators; b) quantified by a large scale dynamic general equilibrium model, a spatial trade model and a model of the EU farm sector; and c) tested in five case study countries. The project will provide information, expertise, and operational instruments to policymakers involved in trade negotiations, and agricultural policy design. Project outcomes – databases and trade methodologies – will have a strong foundation in policy realities thanks to the involvement of stakeholders. The quantitative instruments will ensure a forward-looking assessment of future agreements, including their effects on EU27 trade and the CAP, and answer the Commission's need for quantitative simulations.