Better Agri-food Trade Modelling for Policy Analysis (BATModel)

Economy-wide assessments of multilateral and regional trade agreements often fall short of capturing the complexity of trade policy design and negotiations related to agri-food markets and supply chains. “New generation” trade agreements are not limited to changes in tariffs and tariff rate quotas, but also include provisions on sanitary and phytosanitary (SPS) measures (part of what are called non-tariff measures, NTMs), geographical indications (GIs), public procurement and capital flows.

The overall goal of BATModel is to improve existing trade modelling tools and approaches, equipped for the analysis of 21^st century trade issues with a focus on agriculture and food to support policy analysis. The current needs of the users are to better account for previously neglected or insufficiently covered issues such as NTMs, GIs, zero  trade flows and quality differentiation, as well as GVCs and distributional and sustainability impacts of trade liberalization and trade policy. BATModel will address these shortcoming by building upon advances in international trade theory and global value chain framework. As a major contribution, BATModel will bridge the gap between the established simulation models, based on the aggregate agent paradigm, and the micro evidence revealed by models that account for heterogeneity in firms, territories, producers and customers. The enhancements enabled by BATModel will be operationally implemented through interchangeable and well-documented open-source modules. A test case of an existing free trade agreement and different case studies will be performed to assess the capability of the new modules to improve model-based assessment of agri-food trade. Ultimately, this will provide a new generation of modular trade modelling tool to support the European Commission in designing and assessing trade-related policies and international agreements.

Scientific objectives:

• To extend and improve existing trade simulation models for the analysis of agri-food trade policies by building upon and progressing beyond the state-of-the-art using relevant theory and econometric based evidence;
• To improve the representation of important agri-food trade features such as emerging trade flows, quality differentiation and global value chain issues in trade simulation models.
• To design and provide improvements achieved in BATModel can be used in a modular way in multiple well established trade models by creating BAT Modular Platform for Agri-food Trade Modelling to support policy-makers and other stakeholders in international trade negotiations, especially in the context of “new generation” trade agreements during and after the project’s lifetime.
• To thoroughly test the improved and extended models in policy-relevant applications to deliver operational modular modelling tool to scholars and practitioners for quantitate policy analysis. The end-users will be involved in the co-creation and testing phases of the models, in an iterative process.

Economic, societal and political objectives:

• To better address societal concerns with regard to employment, working conditions, health and income distribution, as well as preferences through new and improved economic modelling approaches that ensure the provision of relevant, i.e., salient, understandable, measurable and reliable results for all stakeholders (the private sector, NGOs and general public).
• To develop methodologies and related indicators to assess the (positive and negative) impacts of international agri-food trade policies on societal challenges, including income inequality, labour displacement, nutritional and environmental impacts across regional scales along the Sustainable Development Goals (SDGs).
• To share and discuss the approaches and findings of the project with research communities, to involve policy makers, the private sector, NGOs and the general public in a process of co-design of case studies and share results in a easily usable manner with via BAT Dissemination and Stakeholder Platform. It will be open to other platforms and policy-makers and will provide learning materials.

See the project website: https://batmodel.org/

Project funding: Horizon 2020

Leader of the consortium: Institut National de la Recherche Agronomique

Partners: Stichting Wageningen Research, Rheinische Friedrich-Wilhelms-Universitat Bonn, Universita Degli Studi di Milano, Sveriges Lantbruksuniversitet, Jrc -Joint Research Centre, Technische Universitaet Muenchen, Centre D’etudes Prospectives et D’informations Internationales, Centro de Investigacion y Tecnologia Agroalimentaria de Aragon, Universitaet Bern, Magyar Tudomanyos Akademia Kozgazdasag- es Regionalis Tudomanyi Kutatokozpont, Universita Degli Studi Roma Tre, Centre for European Policy Studies, CASE – Centrum Analiz Spoleczno-Ekonomicznych – fundacja naukowa, Inra Transfert s.a.