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Asia-Pacific Integration with China vs. the United States: Examining trade patterns under heterogeneous agricultural sectors

Author

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  • Heerman, Kari E.R.
  • Arita, Shawn
  • Gopinath, Munisamy

Abstract

This article compares the effects on global agricultural trade patterns of Asia-Pacific regional economic integration led by the United States versus that by China. Our analysis employs a Eaton-Kortum type model in which agricultural producers have access to technology with heterogeneous productivity. Unlike the standard Eaton-Kortum model, product specific-productivity is linked to a country’s land and climate characteristics and trade costs are product-specific. We derive a structural relationship between the probability a country has comparative advantage in a given export market for an individual agricultural product and the bilateral costs of trading that product controlling for the product-specific unit costs of production from a general equilibrium framework. We specify the relationship as a random coefficients logit model to estimate a country-specific distribution of trade costs and productivity across agricultural products. We use these estimated distributions to explore the set of bilateral relationships from which Asia-Pacific integration is likely to generate the largest shifts in agricultural trade patterns.

Suggested Citation

  • Heerman, Kari E.R. & Arita, Shawn & Gopinath, Munisamy, 2015. "Asia-Pacific Integration with China vs. the United States: Examining trade patterns under heterogeneous agricultural sectors," 2015 Allied Social Sciences Association (ASSA) Annual Meeting, January 3-5, 2015, Boston, Massachusetts 189819, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:assa15:189819
    DOI: 10.22004/ag.econ.189819
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    File URL: http://ageconsearch.umn.edu/record/189819/files/Arita%20Heerman%20Munisamy.pdf
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    References listed on IDEAS

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    2. Lohmar, Bryan & Gale, H. Frederick, Jr. & Tuan, Francis C. & Hansen, James M., 2009. "China's Ongoing Agricultural Modernization: Challenges Remain After 30 Years of Reform," Economic Information Bulletin 58316, United States Department of Agriculture, Economic Research Service.
    3. Lorenzo Caliendo & Fernando Parro, 2015. "Estimates of the Trade and Welfare Effects of NAFTA," Review of Economic Studies, Oxford University Press, vol. 82(1), pages 1-44.
    4. Monfreda, Chad & Ramankutty, Navin & Hertel, Thomas, 2008. "Global Agricultural Land Use Data for Climate Change Analysis," GTAP Working Papers 2601, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    5. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387.
    6. Alan Deardorff, 1998. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," NBER Chapters, in: The Regionalization of the World Economy, pages 7-32, National Bureau of Economic Research, Inc.
    7. Liangliang Gao & Jikun Huang & Scott Rozelle, 2012. "Rental markets for cultivated land and agricultural investments in China," Agricultural Economics, International Association of Agricultural Economists, vol. 43(4), pages 391-403, July.
    8. Monfreda, Chad & Ramankutty, Navin & Hertel, Thomas W., 2008. "Global Agricultural Land Use Data for Climate Change Analysis," Working papers 283458, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
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    Cited by:

    1. Heerman, Kari E. & Sheldon, Ian M., 2018. "Increased economic integration in the Asia-Pacific Region: What might be the potential impact on agricultural trade?," 2018 Annual Meeting, August 5-7, Washington, D.C. 274279, Agricultural and Applied Economics Association.
    2. Heerman, Kari E.R. & Sheldon, Ian, 2016. "Eco-Labelling and the Gains from Agricultural and Food Trade: A Ricardian Approach," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235973, Agricultural and Applied Economics Association.

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    Keywords

    Agricultural and Food Policy; International Relations/Trade;

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