ADB Seminar on effect of trade policy on technological innovation

Induced technological innovation, which may be biased as a result of policy orientation, can have a complex impact on traded commodities, particularly in markets with highly differentiated products.

Induced technological innovation, which may be biased as a result of policy orientation, can have a complex impact on traded commodities, particularly in markets with highly differentiated products. Especially for developing economies, most of which are based on agriculture, it is important to understand that impact.

Lei Lei will discuss a study of a recent policy change at the European Union (EU), using an ex-ante method and a displacement model. She finds that the policy change affected global apple exports, particularly for large exporters such as Chile, the People’s Republic of China, South Africa, and the United States (US).

Considering data availability, the presentation focuses on the US market to study the impact of the EU’s policy-induced, biased, and technological innovation in the US agricultural industry. The results and policy implications are generally applicable to other major agricultural exporters, including those from developing countries.