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How effective is the EU Entry Price System for Fresh Fruits and Vegetables?

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  • Goetz, Linde
  • Grethe, Harald

Abstract

The EU protects EU growers of 15 kinds of fresh fruits and vegetables against international competition not only by the means of ad valorem tariffs of up to 20%, but also by the EU entry-price system (EPS), which is designed to restrict imports below the product-specific, politically designated entry price level. This study investigates the influence of the EPS on import prices of fruits and vegetables per product and country of origin. We utilise a unique data set comprising about 60,000 observations of daily synthetic import prices. We develop two indicators for the effectiveness of the EPS, which serve as variables in a cluster analysis identifying four classes differing in the relevance of the EPS. Results suggest that the relevance of the EPS is heterogeneous among products as well as countries of origin for most fruits and vegetables. Thus, an adequate assessment of the importance of the EPS requires not only a product-specific but also a country-specific analysis. Overall, our results indicate that the effectiveness of the EPS is highest for the import of artichokes, courgettes, cucumbers, lemons, plums and tomatoes. The influence of the EPS on apples, clementines and pears is significantly lower, and of least relevance for EU imports of apricots, mandarins, oranges, peaches and nectarines and table grapes. The EPS has the greatest effect on countries which neighbour the EU, whereas it is of minor importance for exports from far-away countries with the exception of China and South Africa.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 2008 International Congress, August 26-29, 2008, Ghent, Belgium with number 44063.

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Date of creation: 2008
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Handle: RePEc:ags:eaae08:44063

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Related research

Keywords: threshold cointegration; spatial price transmission; vector error correction model; Agricultural and Food Policy; Demand and Price Analysis;

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References

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  1. Gomez, Victor D. Martinez, 2007. "Assessing Euro-Med Trade Preferences: The Case of Entry Price Reduction," 103rd Seminar, April 23-25, 2007, Barcelona, Spain 9447, European Association of Agricultural Economists.
  2. Cioffi, Antonio & dell'Aquila, Crescenzo, 2004. "The effects of trade policies for fresh fruit and vegetables of the European Union," Food Policy, Elsevier, vol. 29(2), pages 169-185, April.
  3. JosÈ-MarÌa GarcÌa-Alvarez-Coque, 2002. "Agricultural trade and the Barcelona Process: is full liberalisation possible?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 29(3), pages 399-422, July.
  4. Chemnitz, Christine & Grethe, Harald, 2005. "EU Trade Preferences for Moroccan Tomato Exports--Who Benefits?," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24686, European Association of Agricultural Economists.
  5. Goetz, Linde & Grethe, Harald, 2006. "The EU's Import Regime for Oranges - Much Ado about Nothing?," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25604, International Association of Agricultural Economists.
  6. Garcia Alvarez-Coque, Jose-Maria & Martinez-Gomez, Victor, 2007. "Assessing Euro-Med Trade Preferences: The Case of Entry Price Reduction," Working Papers 7293, TRADEAG - Agricultural Trade Agreements.
  7. Anton, Jesus & Muniz, Ignacio Atance, 2007. "Measuring domestic implications of tariff cuts under EU entry price regime," 103rd Seminar, April 23-25, 2007, Barcelona, Spain 9400, European Association of Agricultural Economists.
  8. Martinez-Gomez, Victor, 2007. "Assessing Euro-Med trade preferences: the case of entry price reduction," MPRA Paper 1865, University Library of Munich, Germany.
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