Integration of global rice market after the agricultural trade liberalization

다국어 초록 (Multilingual Abstract)

Japan and Korea partially opened its rice market through the Uruguay Round Agreement implemented in 1995, and widened it through tariffication in 1999 and 2014, respectively. To this day, however, they are considered protective markets in the global trade. This is because these countries have implemented several protective measures, such as price and income support programs as well as a diversion program in rice farming. Therefore, an attempt was made in this study to determine if the two aforementioned markets have actually been separated from the global rice market since after the implementation of the UR agreement. In this study, cointegration and causality tests were mainly performed to examine the existence and direction of market integration among rice markets. Especially, the Korean and Japanese rice markets for the periods before and after the implementation of the UR agreement in 1995 were focused on. Three main study results were obtained. First, there is a long-run relationship among the rice exporters in both subperiods. Second, the Korean and Japanese rice products were found to have no long-run relationship with other rice markets in both periods. Third, it can be expected that the Korean rice market will be temporarily isolated from global market based on the empirical result of the Japanese market for the second period (1995-2014). In the long-term perspective, however, the border protection measures will be continuously reduced as a result of several agricultural trades. Therefore, it will be inevitable for the Korean rice market to compete with the global rice markets.

목차 (Table of Contents)

• 1. Introduction 1
• 1.1 Characteristics of the global rice market: Thin and volatile 1
• 1.2 Global rice trade: Indica and Japonica rice 4
• 1.3 Rice market opening in Japan and Korea 5
• 1.4 Objectives and structure of the study 9
• 2. Korean and Japanese Rice Economies 10
• 2.1 Structural changes in the rice market 10
• 2.2 Changes in the rice policies in Korea and Japan 17
• 3. Literature Review 21
• 4. Data and Methodology 26
• 4.1 Data 26
• 4.2 Methodology 29
• 5. Empirical Results 33
• 5.1 Cointegration tests 34
• 5.2 Causality tests 40
• 5.3 Impulse response and variance decomposition analyses 42
• 6. Conclusion 54
• References 59