Agricultural and trade policy reform in Mexico: PROCAMPO, NAFTA, and pre-GATT

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2000-01-01
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Hansen, James
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William H. Meyers
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Economics

The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).

History
The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.

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1898–present

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  • Department of Economic Science (1898–1910)
  • Department of Economics and Political Science (1910-1913)
  • Department of Applied Economics and Social Science (1913–1924)
  • Department of Economics, History and Sociology (1924–1931)
  • Department of Economics and Sociology (1931–1967)

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Changes in Mexico's domestic agricultural policy (PROCAMPO) and continued liberalization of trade through GATT and NAFTA have had strong effects on Mexico's agricultural production, consumption, and trade with the United States. The main objective of this study is to analyze these effects in Mexico's grain and livestock sectors. Policies within the NAFTA and GATT international trade agreements may overlap to some degree, and Mexico's domestic agricultural liberalization program (PROCAMPO) may include policies that overlap those in one or both of the international trade agreements. This study analyzes the effects of PROCAMPO, NAFTA, and pre-GATT policies compared to a baseline of current policy for 1994 through 2000 and forecast to 2005;To achieve this objective, the study analyzes the crop and livestock sectors within Mexico's economy and develops a domestic econometric supply and demand system based on economic theory. International agricultural trade is analyzed by deriving import demand and export supply relationships from the agricultural supply and demand model. Policy instruments for agricultural and trade liberalization are incorporated into the economic sectors developed in the model. Finally, changes in Mexico's production, consumption, and net trade patterns with the United States for grain crops and livestock are analyzed;The following procedures are employed in this research. An econometric model is developed for Mexico's livestock and crop sectors that includes supply and demand systems. An argument for determining the appropriate type of model is presented. The model represents economic behavior and policies as closely as possible, given such constraints as data availability and reliability. Mexico's import demand and export supply are derived from the supply and demand system. Policy instruments are incorporated into the model for PROCAMPO, GATT, pre-GATT, and NAFTA economic policies. Current trade and domestic policy as implemented by the government of Mexico are incorporated into the model's baseline scenario. The impacts of PROCAMPO, pre-GATT, and NAFTA policies on changes in production, consumption, and trade in Mexico's grain and livestock sectors are analyzed. An alternative scenario that depicts changes in Mexico's exchange rate is analyzed.

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Sat Jan 01 00:00:00 UTC 2000