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Trade Creation, Trade Diversion effects of NAFTA on vegetable and fruit trade flows

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  • David Karemera
  • Viceola D. Sykes
  • Lucy J. Reuben
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    Abstract

    The present study empirically estimates and evaluates the impact of NAFTA in the vegetable and fruit trade between the USA and Mexico. The import price elasticities suggest that imports are not sensitive to price changes. However, the income elasticities of import demand vary by commodities. As expected, the vegetables and fruits exhibit strong seasonality while the import dynamics are commodity-specific. The amount of trade expansion is estimated using import price elasticities from a dynamic import demand model for the commodities. This study demonstrates that there is trade expansion attributable to NAFA in the vegetable and fruit trade. The amount of Trade Creation (TC) is greater than the amount of Trade Diversion (TD) in most commodities examined.

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    Bibliographic Info

    Article provided by Inderscience Enterprises Ltd in its journal World Review of Entrepreneurship, Management and Sustainable Development.

    Volume (Year): 3 (2007)
    Issue (Month): 2 ()
    Pages: 142-157

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    Handle: RePEc:ids:wremsd:v:3:y:2007:i:2:p:142-157

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    Web page: http://www.inderscience.com/browse/index.php?journalID=173

    Related research

    Keywords: vegetable trade; fruit trade; import model; NAFTA; trade creation; trade diversion; USA; United States; Mexico.;

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