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

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Author Info
Malhotra, Nisha
Stoyanov, Andrey

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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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Publisher 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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Web page: http://www.catrade.org/
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Related research
Keywords: Canada; Chile; FTA; regional; Agricultural and Food Policy; International Relations/Trade;

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References listed on IDEAS
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  1. Bayoumi, Tamim & Eichengreen, Barry, 1995. "Is Regionalism Simply a Diversion? Evidence from the Evolution of the EC and EFTA," CEPR Discussion Papers 1294, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  3. Lucian Cernat, 2001. "ASSESSING REGIONAL TRADE ARRANGEMENTS: ARE SOUTH–SOUTH RTAs MORE TRADE DIVERTING?," International Trade 0109001, EconWPA. [Downloadable!]
  4. 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. [Downloadable!] (restricted)
  5. 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. [Downloadable!] (restricted)
  6. W. H. Furtan & Blain M. van Melle, 2004. "Canada's Agricultural Trade in North America: Do National Borders Matter?," Review of Agricultural Economics, American Agricultural Economics Association, vol. 26(3), pages 317-331, 09. [Downloadable!] (restricted)
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