International Trade Case Study

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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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