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