A partnership with academia

Building knowledge for trade and development

NEWS

Dahai Fu (left) and Shantong LiThe September 9 afternoon session of the Vi trade and poverty seminar, chaired by project mentor, Marco Fugazza, of UNCTAD’s Division on International Trade in Goods and Services and Commodities, discussed the findings of research on China, the Philippines and Argentina.

“Although the impact of the renminbi (RMB) appreciation on the country’s trade flows, labour market and economic growth has been widely analyzed, the effects of exchange rate movements on consumers and poverty in China have not yet been studied in the existing literature,” began Dahai Fu (pictured, left), of Vi Chinese affiliate member, the Central University of Finance and Economics.

Fu’s analysis therefore looks at the impact of the RMB appreciation on domestic prices, and estimates the effect on household welfare in China. His estimates indicate that because the currency appreciation lowers prices of all goods, all households benefit to various degrees. However, because they usually spend less on food and housing, which became cheaper as a result of the appreciation, but pay more  for medical care, whose price did not decrease, the poor in rural areas benefit the least.

Policymaker partner and co-author, Shantong Li (pictured), of the State Council of China, said the government is taking action in line with the paper’s policy recommendations, in particular with respect to labour market effects and differentiated consumption patterns.

Next on the programme was Filipino researcher, George Manzano (pictured, left), of the University of Asia and the Pacific, who conducted research on the effects of the 2008 rice crisis in his country, the largest rice importer in 2008. Policymaker partner, Jerome D. Bunyi (pictured), of the Permanent Mission of the Philippines to the WTO, joined in the discussion of the findings.

“Self-sufficiency has always been a moving target,” Manzano said. “For the Philippines’ policymakers, the price spike in 2008 was a tough time.”

His analysis shows that 91 percent of households were negatively affected by the rice crisis, with female-headed, urban, and non-agricultural households suffering greater losses. In order to respond to an eventual crisis in the future, the study proposes targeted assistance programmes, such as subsidized rice or conditional cash transfers. In the long run, however, the study calls for action to improve rice productivity and increase the level of self-sufficiency in rice production.

Closing the second day of the seminar was Maria Priscila Ramos (pictured), of Universidad de la Empresa, who conducted research on the potential welfare gains from trade liberalization of environmental products in Argentina. Policymaker partner, Julia Hoppstock, of Cancillería Argentina, was unable to attend the seminar.

The research simulates the trade, welfare and environmental impact of four lists of environmental goods and services (EGS) proposed for liberalization, and sets out specific options for use by the government in WTO EGS negotiations.

“This Vi project was a very useful experience. I learned new approach, I had the possibility to apply it to a concrete case and even on a subject I love (trade and environment),” Ramos said. “I met professional and competent people, and have enlarged my network of contacts, which is invaluable for future opportunities in the international environment.”

For more information on the seminar and the book, visit http://vi.unctad.org/tap

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