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International Trade Case Study

Decent Essays
4.5 RESULTS The main results of damages associated with international trade are presented in Table 4.1. For example, the first row shows that exported crop products generate approximately $2,351 million damages (DEX), and create $14,754 million value-added (VEX) to the US economy. While, imported crop products correspond to $2,246 million damages (DIM) and $11,020 million value-added (VIM) that would otherwise be generated by the domestic production. Net damages generated by trade of crop products is $106 million (ΔD=106 million), which accounts for 2.83% (ΔD/ΔVA=2.83%) of net value-added created by trade of crop products (ΔVA=3,734 million). That is, on average for each thousand-dollar value-added generated by net exports of crop…show more content…
In addition, as a source of external annual benefits to the US citizens, the accumulative values of the benefits over years can be tremendous. Furthermore, this net environmental benefit accounts for 2.7% of trade deficit in 2002 ($399 billion), and 3.4% of the net value-added loss from trade (see Table 4.1). The latter ratio indicates that on average for each thousand dollar of value-added loss associated to net imports, the actual loss is $34 lower, when air emission damages are taken into account. Although damage to value-added ratio is lower than 5% at the national level, in some industries this ratio can be greater than 50%. For instance, in the Carbon Black Manufacturing industry and All the Other Petroleum and Coal Products Manufacturing industry, damage to value-added ratios are 51% and 54%, respectively (see Table A4.11 in Appendix E). This implies exports in these industries are so hazardous that more than half of its value-added gains would disappear due to environmental damages. In the sector level, large but less extreme ratios are found (see Table 4.1), such as Animal Production sector (ΔD/ΔVA=26.72%), Forestry and Logging sector (ΔD/ΔVA=23.48%), and Utilities sector (ΔD/ΔVA=28.95%). In those sectors, about a quarter of value-added gains (loss) are deteriorated (compensated) by environmental damages (benefits). From Table 4.1, we find net environmental benefits (or costs)
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