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Trade Agreements and Trade Opportunities: A Flexible Approach for Modeling Australian Export and Import Elasticities


  • Kevin J. Fox
  • Ulrich Kohli
  • Alice Shiu


Patterns of trade have changed enormously over the last 30 years, particularly due to the economic emergence of several Asian countries. With the increasing international tendency for bilateral preferential trade agreements, it is important for countries to be aware of trade substitution possibilities. This paper estimates import and export price elasticities for Australia and its major trading partners in Europe and Asia, 1958 to 2002, using a fully flexible version of the Symmetric Normalized Quadratic aggregator function. Imports and exports are disaggregated into six regions, covering 17 countries. Our results illuminate the (changing) substitution and complementarity patterns for Australian foreign trade, highlighting trading opportunities in the face of a changing international environment. Copyright © 2010 Blackwell Publishing Ltd.

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  • Kevin J. Fox & Ulrich Kohli & Alice Shiu, 2010. "Trade Agreements and Trade Opportunities: A Flexible Approach for Modeling Australian Export and Import Elasticities," Review of International Economics, Wiley Blackwell, vol. 18(3), pages 513-530, August.
  • Handle: RePEc:bla:reviec:v:18:y:2010:i:3:p:513-530

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    References listed on IDEAS

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    12. Ulrich Kohli, 1994. "Canadian Imports and Exports by Origin and Destination: A Semi-flexible Approach," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 580-603, August.
    13. Neal H. Hooker & Julie A. Caswell, 1999. "A Framework for Evaluating Non-Tariff Barriers to Trade Related to Sanitary and Phytosanitary Regulation," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(2), pages 234-246.
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