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Does the WTO Increase Trade? The Case of U.S. Cocoa Imports from WTO-Member Producing Countries

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  • Yeboah, Osei-Agyeman
  • Shaik, Saleem
  • Wozniak, Shawn J.
  • Allen, Albert J.
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    Abstract

    This study analyzes U.S. cocoa bean imports from twenty-one major cocoa-producing and exporting countries during the pre- and post-liberalization period of 1970-2008 using the gravity equation and a linear one-way fixed effects model. The objective was to measure trade creation for a World Trade Organization (WTO) member that has undergone trade liberalization. Cocoa beans can serve as a proxy for any tropical commodity upon which a developing country heavily relies on for export revenue, such as is the case with cocoa for Côte d’Ivoire and Ghana, for example. Our results find participation in free trade agreements (FTAs) and WTO membership do contribute to increased U.S. cocoa bean imports at the one percent and five percent confidence levels, respectively.

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    Bibliographic Info

    Article provided by Food Distribution Research Society in its journal Journal of Food Distribution Research.

    Volume (Year): 42 (2011)
    Issue (Month): 2 (July)
    Pages:

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    Handle: RePEc:ags:jlofdr:139423

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    Web page: http://fdrs.ag.utk.edu/
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    Related research

    Keywords: Crop Production/Industries; International Relations/Trade; Production Economics;

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    1. Helpman, Elhanan, 1987. "Imperfect competition and international trade: Evidence from fourteen industrial countries," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 62-81, March.
    2. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November.
    3. Marius Brülhart & Mary J. Kelly, 1999. "Ireland’s Trading Potential with Central and Eastern European Countries - A Gravity Study," The Economic and Social Review, Economic and Social Studies, vol. 30(2), pages 159-174.
    4. Shang-Jin Wei & Arvind Subramanian, 2003. "The WTO Promotes Trade, Strongly But Unevenly," IMF Working Papers 03/185, International Monetary Fund.
    5. Gros, Daniel & Gonciarz, Andrzej, 1996. "A note on the trade potential of Central and Eastern Europe," European Journal of Political Economy, Elsevier, vol. 12(4), pages 709-721, December.
    6. Nilsson, Lars, 2000. "Trade integration and the EU economic membership criteria," European Journal of Political Economy, Elsevier, vol. 16(4), pages 807-827, November.
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