1. International Trade: What Happens in
China Doesn’t Stay in China
Transatlantic Conference on Food and Fuels
October 16-18, 2011
E. Wesley F. Peterson
Department of Agricultural Economics
University of Nebraska-Lincoln

2. Agricultural trade is important for
producers and consumers in Nebraska,
the US and the EU
 Exports account for about 30 percent of the value of
agricultural production in Nebraska.
 Between 20 and 25 percent of agricultural production in the US
and EU is exported.
 Food and Agricultural imports in 2009 were valued at $101
billion in the US and $141 billion in the EU (6.3 and 8.4 percent
of total merchandise imports respectively).

3. Three important trends are influencing
the agricultural trade of Nebraska, the
United States and the European Union
1. Changing Composition of World Agricultural Trade
2. Neighborhood effects
3. Asia Rising

4. First trend: Changing Composition of World Agricultural
Trade.
Historically, US agricultural exports have been dominated by bulk
commodities (68 percent of agricultural exports in 1967 compared
with 14 percent for consumer-oriented goods). Today, bulk
commodities and consumer-oriented goods have similar shares
(41 and 39 percent respectively).
Shares of Bulk, Consumer-oriented and Intermediate Products
in US Agricultural Exports
80
70
60
50
40
30
20
10
0
Bulk Commodities Consumer-oriented Goods Intermediate Goods

5. The composition of world agricultural
trade has also changed:
 In 1961, consumer-oriented goods defined as meat, dairy,
fruits, vegetables and beverages made up 25 percent of world
agricultural exports compared with 56 percent in 2008.
Note that EU food and agricultural exports have always been
focused on consumer-oriented products. Consumer-oriented
goods made up about 53 percent of EU agricultural exports in
1961 compared with 51 percent in 2008.

6. Nebraska Agricultural Exports. Percentages made up of
bulk commodities, consumer-oriented goods and
intermediate goods
Bulk 30.2 28.6 34.7 30.1
Consumer 30.2 34.6 39.5 47.9
Intermediate 39.6 36.8 25.8 22.0
Value of Agricultural
Exports ($ million) 843.5 1,349.0 2,335.4 2,744.5
Source: USDA Foreign Agriculture Service and Author’s calculations

7. Second trend: Neighborhood effects
 As multilateral trade liberalization has stalled, countries have
turned to regional and bilateral trade agreements. Along with
earlier regional agreements such as the EU and NAFTA, these
trade pacts have led to increased regional food and agricultural
trade.
Percentage of US Agricultural Exports to Selected Regions, 1907-2010
80
70
60
50
40
30
20
10
0
1967 1970 1975 1980 1985 1990 1995 2000 2005 2010
Developing Countries East Asia North America
Latin America EU-27 Former USSR

8. EU agricultural exports divided by EU agricultural
imports (degree of food self-sufficiency)
1.2
1
0.8
0.6
y = -0.0002x2 + 0.0241x + 0.3781 Series1
R² = 0.9837 Poly. (Series1)
0.4
0.2
0

9. Percentage of Nebraska Food and
Agricultural Exports Destined for
Selected Regions
Developing countries 66.5 73.4 70.1 69.7
East Asia 32.5 28.6 28.3 34.2
North America 50.7 56.2 54.3 49.1
Latin America 38.7 46.8 44.0 41.5
EU-27 4.1 3.3 3.2 4.4
Former USSR 1.1 2.5 3.1 1.7

10. Third trend: Asia Rising – How significant are China
and India in the world economy?
Share of the World Economy Accounted For by Various Countries and Regions (%).
1993 2009
China 1.8 8.2
India 1.0 2.4
Brazil 1.9 2.6
Russia 1.4 2.2
BRIC 6.1 15.4
Japan 18.2 8.2
Korea 1.4 1.6
East Asia (China, Japan, Korea) 21.4 18.0
Emerging Asia (China, India, Indonesia, Malaysia) 3.9 11.6
EU-27 30.0 28.8
US 27.1 24.1
High-income (EU-27, US, Japan, Korea) 76.7 62.7
Source: World Bank

11. EU and US Trade with Asia and China, 2009
(billion dollars and percentages of totals).
Total Asia (%) China (%)
US merchandise exports 1,057 286 (27.1%) 70 (6.6%)
US merchandise imports 1,602 620 (38.7%) 310 (19.4%)
US agricultural exports 120 51 (42.5%) 18 (15.0%)
US agricultural imports 101 25 (24.8%) 6 (5.9%)
EU merchandise exports* 1,528 383 (25.1%) 113 (7.4%)
EU merchandise imports* 1,673 621 (37.1%) 299 (17.0%)
EU agricultural exports* 110 26 (23.6%) 5 (4.5%)
EU agricultural imports* 141 32 (22.7%) 7 (5.0%)
*Extra-EU trade (excludes intra-trade among EU members)
Source: WTO

12. Asia’s weight in the world is substantial and
growing. This is particularly true for trade.
 Note, however: If the Chinese economy grows at an annual rate
of 8 percent for the foreseeable future (unlikely) while the US
economy grows at an annual rate of 1.5 percent (not
unimaginable), it would take about 17 years for Chinese GDP to
equal US GDP.
 And when China’s economy is as large as that of the US, China
will still have about four times as many people so per capita
income would only be about one-fourth of per capita income in
the US. Currently per capita income in the US is eleven times
that of China.

14. US Agricultural Exports (bulk commodities, consumer
oriented goods and intermediate goods)
Con- Inter- Total* Bulk Cons. Intermed.
Year Bulk* sumer* mediate* share** share** share**
1967 4.34 0.89 1.16 6.39 67.9 13.9 18.2
1970 4.60 0.99 1.64 7.19 64.0 13.8 22.2
1975 16.49 2.21 3.14 21.84 75.5 10.1 14.4
1980 28.79 4.88 7.57 41.22 69.8 11.8 18.4
1985 17.87 4.76 6.41 29.04 61.5 16.4 22.1
1990 20.24 10.58 8.67 39.49 51.3 26.8 21.9
1995 26.01 19.06 11.14 56.21 46.3 33.9 19.8
2000 18.59 21.70 10.97 51.26 36.3 42.3 21.4
2005 23.22 27.21 12.75 63.18 36.8 43.1 20.1
2010 47.19 45.43 23.19 115.81 40.8 39.2 20.0
Source: FAS
*Billions of current dollars
** Share in total agricultural exports of bulk, consumer and intermediate
agricultural goods. Exports of forest and fish products have been excluded)

15. Percentage of US Agricultural Exports to
Selected Regions, 1967-2010.
Developing East North Latin Former
Year countries Asia America America EU-27 USSR
1967 39.6 18.9 9.9 9.4 36.9 0.3
1970 36.6 22.9 13.6 9.7 34.9 0.3
1975 46.8 21.4 8.7 10.5 34.2 5.2
1980 50.9 28.3 10.5 14.8 31.6 2.5
1985 51.7 29.5 10.5 14.5 24.0 6.5
1990 49.4 35.4 17.1 12.9 18.9 5.7
1995 53.4 38.5 16.6 14.2 15.6 2.4
2000 53.1 32.8 27.4 20.7 12.7 1.6
2005 58.7 29.4 31.7 23.6 11.1 2.1
2010 66.7 35.1 27.2 21.5 7.7 1.4
Source: USDA Foreign Agriculture Service
and author’s calculations.

16. Percentage of Extra-EU Agricultural
Exports to Selected Regions, 1998-2009.
Year Non-EU Middle
Europe CIS Asia Africa East US China
1998 -- -- 19.1 13.5 8.8 14.4 1.4
2000 -- -- 22.8 12.0 9.5 16.0 2.6
2003 19.2 9.2 21.7 12.7 8.2 19.4 2.2
2005 19.3 10.4 22.9 11.9 8.2 18.7 3.4
2007 17.5 13.0 22.7 13.2 8.3 16.9 4.1
2009 18.3 12.1 23.6 15.0 9.0 13.6 4.90
Source: WTO and author’s calculations

17. The table below traces the development of the EEC as it was
enlarged and took on further responsibilities culminating in the
EU with 27 members today.