A study of imperfect competition of the Asian dairy markets: The impacts of Doha round agricultural negotiations and further trade liberalization

The objectives of this thesis are to address the knowledge gap between perfect competition and imperfect competition in the world dairy sectors, and study the impacts of Doha round agricultural negotiations on the Asian and/or world dairy markets. Using the conjectural variation (CV) method, a model is built which allows any degree of market structure from perfect competition to monopoly or monopsony. One spatial price arbitrage condition derived from this model is estimated econometrically to test the existence of market power.; From a statistical point of view, it is found that imperfect competition model is more appropriate to explain China's butter and skim milk powder (SMP) imports, Japan's cheese, butter and skim milk powder imports, and South East Asia's skim milk powder imports. From the empirical results, it is found that the impacts of imperfect competition are positively related to trade distortions. However, from the empirical results on market power, the use of perfect competition assumptions to study world dairy sectors by current models is roughly justified if imperfect competition only applies to a limited number of products in a few regions.; The impacts of different degrees of trade liberalization on world dairy sectors are similar to each other with different magnitudes. Full dairy sector liberalization has significant impacts on Japan, Korea and SEA dairy markets, but the impacts on China and India dairy markets are small. Australia and New Zealand producers gain from trade polices reform while suffer from domestic support policy reform. EU dairy producers suffer the biggest losses from world dairy trade liberalization. Compared with other regions, the impacts of world dairy trade liberalization on the U.S. dairy market is generally moderate in the medium term context. Canada's dairy producers also suffer significant losses from full dairy sector liberalization. Overall, full dairy sector liberalization has little impact on world aggregate welfare, but it changes the location of production and redistributes welfare across different countries.