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Trade Creation And Diversion Effects Of The North American Free Trade Agreement Of U.S. Sugar Imports From Mexico

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  • Devadoss, Stephen
  • Kropf, Jurgen
  • Wahl, Thomas I.

Abstract

A world sugar model consisting of 21 countries was developed to determine the effects of NAFTA of U.S. and Mexican sugar markets and to quantify the trade creation and diversion effects on U.S. imports from Mexico. Mexican sugar production increases under NAFTA, causing Mexico to become a net exporter. NAFTA induces sugar imports from Mexico to displace U.S. production, to meet demand expansion, and also to divert U.S. imports from other foreign suppliers to Mexico. Effects of NAFTA on the U.S. sugar market are small because of the side agreements which limit Mexican exports and which include corn sweetener consumption when computing Mexico's production surplus.

Suggested Citation

  • Devadoss, Stephen & Kropf, Jurgen & Wahl, Thomas I., 1995. "Trade Creation And Diversion Effects Of The North American Free Trade Agreement Of U.S. Sugar Imports From Mexico," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 20(2), pages 1-16, December.
    • Handle: RePEc:ags:jlaare:30773
    DOI: 10.22004/ag.econ.30773
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    References listed on IDEAS

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    1. William A. Messina & James L. Seale, 1993. "U.S. Sugar Policy and the Caribbean Basin Economic Recovery Act: Conflicts between Domestic and Foreign Policy Objectives," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 15(1), pages 167-180.
    2. Pelzman, Joseph, 1977. "Trade Creation and Trade Diversion in the Council of Mutual Economic Assistance: 1954-70," American Economic Review, American Economic Association, vol. 67(4), pages 713-722, September.
    3. Lopez, Rigoberto A., 1988. "Political Economy of the United States Sugar Policies," Working Papers 115808, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
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    Cited by:

    1. Dmitriy Aleksandrovich Izotov, 2021. "Trade Integration in the Asia-Pacific Region: Decomposition of Effects," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 66-96.
    2. Khanna, Madhu & Hector, Nunez & David, Zilberman, 2014. "The Political-Economy of Biofuel and Cheap Oil Policies in Brazil," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169471, Agricultural and Applied Economics Association.
    3. John C. Beghin & Barbara El Osta & Jay R. Cherlow & Samarendu Mohanty, 2003. "The Cost Of The U.S. Sugar Program Revisited," Contemporary Economic Policy, Western Economic Association International, vol. 21(1), pages 106-116, January.
    4. Kennedy, P. Lynn & Hughes, Karol W., 1998. "Welfare Effects Of Agricultural Trading Blocs: The Simulation Of A North American Customs Union," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(1), pages 1-11, July.
    5. Benirschka, Martin & Koo, Won W., 1997. "Liberalizing International Sugar Trade: The Impact of U.S. Tariff Rate Quota Changes," 1997 Annual Meeting, July 13-16, 1997, Reno\ Sparks, Nevada 35894, Western Agricultural Economics Association.
    6. von Ledebur, E.-O., 2001. "Agrarhandelsauswirkungen der Bildung einer präferenziellen Handelszone zwischen der EU und dem MERCOSUL," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 37.
    7. Howard J. Wall, 2003. "NAFTA and the geography of North American trade," Review, Federal Reserve Bank of St. Louis, vol. 85(Mar), pages 13-26.
    8. Marshall, Maria I., 2002. "Political Market Impacts On Mexican Import Permits For White Corn," 2002 Annual Meeting, July 28-31, 2002, Long Beach, California 36556, Western Agricultural Economics Association.
    9. Khanna, Madhu & Nuñez, Hector M. & Zilberman, David, 2016. "Who pays and who gains from fuel policies in Brazil?," Energy Economics, Elsevier, vol. 54(C), pages 133-143.
    10. Marshall, Maria I. & Marsh, Thomas L., 2003. "Endogenous Protection In The Mexican Corn And Sorghum Market," 2003 Annual meeting, July 27-30, Montreal, Canada 22242, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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