ABSTRACT
This chapter discusses how the European Union Nitrate Directive, intended to reduce residual nitrogen in the environment, also may affect trade. There is a consensus that both agricultural and environmental policies affect agricultural trade, as well as the environment. Considerable research has focused on quantifying the effects that agricultural policies, including their reform, have on trade. Linking environmental policies to agricultural trade and the environment is a relatively new effort. Manure is considered to be the major source of nitrate pollution in the vulnerable zones. Net trade for the other livestock products is similar in magnitude to the beef net trade numbers. The net trade effects arising from the combination of Common Agricultural Policy (CAP) reform and the Nitrate Directive are the result of decreases in grain supply because of CAP reform and decreases in feed demand from lower livestock production imposed by the Nitrate Directive.
