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Analyzing the Agricultural Trade Impacts of the Canada-Chile Free Trade Agreement

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  • Malhotra, Nisha
  • Stoyanov, Andrey

Abstract

In this paper we study the agricultural trade impacts of the Canada Chile Free Trade Agreement (CCFTA). We find that the effect of the CCFTA on Chilean agricultural exports to Canada is large and positive. We estimate that approximately one-half of a 90 percent increase in Chilean exports to Canada can be attributed to trade preferences that the country received under the agreement. We found no effect of the agreement on Canadian exports to Chile. As far as we know, our paper is among the few that carries out a detailed empirical analysis of \ the effect of the FTA on agriculture. Most empirical papers that have studied the trade impact of FTAs rely on country-wide gravity models and aggregate trade data. These aggregate analyses can hide negative effects of FTAs on some sectors (like agriculture) where a country may have a comparative disadvantage. Our approach is industry-focused and differs from the mainstream literature analyzing FTAs.

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Bibliographic Info

Paper provided by Canadian Agricultural Trade Policy Research Network in its series Working Papers with number 46628.

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Date of creation: Oct 2008
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Handle: RePEc:ags:catpwp:46628

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Related research

Keywords: Canada; Chile; FTA; regional; Agricultural and Food Policy; International Relations/Trade;

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  1. John Gilbert & Robert Scollay & Bijit Bora, 2011. "Assessing Regional Trading Arrangements in the Asia-Pacific," Working Papers 2001-20, Utah State University, Department of Economics.
  2. Thomas L. Vollrath & Charles B. Hallahan & Mark J. Gehlhar, 2006. "Consumer Demand and Cost Factors Shape the Global Trade Network in Commodity and Manufactured Foods," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(4), pages 497-511, December.
  3. W. H. Furtan & Blain M. van Melle, 2004. "Canada's Agricultural Trade in North America: Do National Borders Matter?," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 26(3), pages 317-331.
  4. Lucian Cernat, 2001. "ASSESSING REGIONAL TRADE ARRANGEMENTS: ARE SOUTH–SOUTH RTAs MORE TRADE DIVERTING?," International Trade 0109001, EconWPA.
  5. Tamim Bayoumi & Barry Eichengreen, 1995. "Is Regionalism Simply a Diversion? Evidence From the Evolution of the EC and EFTA," NBER Working Papers 5283, National Bureau of Economic Research, Inc.
  6. Jeffrey A. Frankel and Shang-Jin Wei., 1993. "Emerging Currency Blocs," Center for International and Development Economics Research (CIDER) Working Papers C93-026, University of California at Berkeley.
  7. Frankel, Jeffrey & Stein, Ernesto & Wei, Shang-jin, 1995. "Trading blocs and the Americas: The natural, the unnatural, and the super-natural," Journal of Development Economics, Elsevier, vol. 47(1), pages 61-95, June.
  8. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," Journal of Economic Literature, American Economic Association, vol. 42(3), pages 691-751, September.
  9. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-23, June.
  10. Caroline Freund, 2000. "Different Paths To Free Trade: The Gains From Regionalism," The Quarterly Journal of Economics, MIT Press, vol. 115(4), pages 1317-1341, November.
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