A Gravity Approach to Assess the Effects of Association Agreements on Euromediterranean Trade of Fruits and Vegetables

Garcia-Alvarez-Coque, Jose Maria and Martí-Selva, Maria-Luis (2006): A Gravity Approach to Assess the Effects of Association Agreements on Euromediterranean Trade of Fruits and Vegetables.

Abstract

The paper is intended to draw on a gravity methodology to assess the impact of EuroMediterranean Association Agreement on Fruit and Vegetable trade from Mediterranean Partner Countries (MPC) to the EU. The Association Agreements appear to be significant as an explanatory of both fruit and vegetables’ trade flows to the EU. However, while the impact of such arrangements has contributed to boost MPC’s horticultural exports, it has not been sufficient to compensate the export loss related to the nature of MPCs as third countries. MPCs may have obtained gains from the EuroMed Agrements but the Barcelona process is still far to achieve its initial goals, at least concerning crucial products for the MPCs’ export strategy. The presented approach supplies a method to monitor future developments in the EuroMediterranean process.

• Item Type: MPRA Paper
• Institution: TRADEAG Project
• Language: English
• Keywords: agricultural trade; Euro-Mediterranean agreements; fruit and vegetables
• Subjects: F - International Economics > F1 - Trade > F15 - Economic Integration; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q18 - Agricultural Policy ; Food Policy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q17 - Agriculture in International Trade

References

Anania, G. (2001): “Modelling agricultural trade liberalization and its implications for the European Union”. Working Paper n.12. Instituto Nazionale di Economia Agraria.

Bchir M. H., Bouët A., Decreux Y., Fontagné L., Guérin J.-L., Jean S., Mimouni M., Pichot X. (2002): Les conséquences économiques d'un accord de libre-échange entre l'Union européenne et les pays membres du programme Euromed, Report for the Directorate for External Economic Relationships (DREE) and for the Forecasting Directorate (DP), Ministry of Finance, Paris, February.

Beghin, JC and Bureau, JC (2001): “Measurement of Sanitary, phytosanitary and technical barriers to trade” OECD. September.

Bergstrand, JH (1985): “The gravity equation in international trade: some microeconomic foundations and empirical evidence” The review of economics and statistics, nº 71, pp 143-153.

Bergstrand, JH (1989): “The generalized gravity equation, monopolistic competition, and the factor-proportions theory in international trade” The review of economics and statistics, nº 67, pp 474-481.

Burfisher, M., Pick, D., Pompelli, G., and Zahniser, S (2001): “North American trade in an Era of Multiple Trade Agreements: A Gravity Analysis”. Paper presented at the annual meeting, American Agricultural Economics Association and Canadian Agricultural Economic Society, Chicago, August 5-8.

Dean JM, Feinberg, R, Ferrantino M, and Ludema R (2003). “Estimating the tariff-equivalent of NTMs” working paper. APEC Capacity-Building Workshop on Quantitative Methods for Assessing NTMs and Trade Facilitation. October 8-10, Bangkok, Thailand.

Deardorff, A and Stern R (1997). “Measurement of Non-Tariff Barriers” Economics Dept. Working Paper Nº 179 OECD.

Dessus, S.; Devlin, J. and Safadi, R. (eds.) (2001): Towards Arab and Euro-Med Regional Integration, Development Centre of the Organisation for Economic Co-Operation and Development Economic Research Forum for the Arab Countries, Iran And Turkey-The World Bank, Development Centre Seminars, Paris: 129 - 146.

García Alvarez-Coque, J.M. (2002a): “Agricultural trade and the Barcelona process. Is full liberalisation possible? European Review of Agricultural Economics Vol. 29, pgs. 399-422.

Grethe, H., Nolte, S. and Tangermann, S. (2005): The Development and future of EU Agricultural Trade Preferences for North-African and Near-East Countries, Paper prepared for presentation at the 99th seminar of the EAAE (European Association of Agricultural Economists), "The Future of Rural Europe in the Global Agri-Food System", 23-27 August 2005, Copenhagen.

Kuiper, M. (2004). “Fifty Ways to Leave Your protection. Comparing Applied Models of the Euro-Mediterranean Association Agreements”. ENARPRI Working Paper No.6/April 2004.

Helpman, E and Krugman, P (1985): Market structure and foreign trade. Increasing returns, imperfect competition and the international economy, The MIT Press, Cambridge, MA/London.

Martinez-Zarzoso I and Nowak F (2003): “Augmented gravity model: an empirical application to Mercasur-European Union trade flows” Journal of Applied Economics, Vol VI, nº 2. pp 291-316. November.

Nilsson, L (2002): “Trading relations: is the roadmap from Lomé to Cotonou correct?” Applied Economics, nº 34. pp 439-452.

OECD (2005): “Preferential Trading Arrangements in Agricultural and Food Markets. The case of the European Union and the United States”.

Otsuki, T., Wilson, JS. and Sewadeh M (2000): “Saving two in a Billion: a case Study to Quantify the trade effect of European food safety standards in African exports” World Bank, Washington D.C.

Pöyhönen, P (1963a): “A tentative model for the volume of trade between countries”. Weltwirschaftliches Archiv, pp 93-99.

Pöyhönen, P (1963b): “Toward a general theory of international trade” Ekonomiska Samfundets Tidskrift, nº16, pp 69-78.

Rae, Allan N. (2004). “International Trade in Fruits and Vegetables: Barriers to Trade, WTO Proposals for Reform and Modelling Alternative Outcomes” Acta Horticulturae 655: 429-438.

Sandberg, HM (2004): “The impact of historical and regional linkages on free trade in the Americas: a gravity model analysis across sectors”. Selected paper prepared for presentation at the American Economics Association Annual Meeting, Denver, Colorado, August 1-4.

Swinbank, A. and Ritson, C. (1995): "The impact of the GATT Agreement on EU Fruit and Vegetable Policy". Food Policy, Vol 20.

Tinbergen, J (1962): “Shaping the world Economy: suggestions for international economic policy” New York: The Twentieth Century, Inc.

Vido, E., Prenctice, B (2001): “Methodological issues in gravity model analysis with applications to pork and lentil trade” Paper presented at the annual meeting, American Agricultural Economics Association and Canadian Agricultural Economics Association.