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Impacts of the U.S.-Central America-Dominican Republic Free Trade Agreement - the Apple Case

Listed author(s):
  • Fu, Shengfei
  • Epperson, James E.
  • Ames, Glenn C.W.

The U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) levels the playing field of trade between the United States and the six CAFTA-DR partner countries. Half of U.S. farm products gain immediate tariff-free access to the markets of the CAFTA-DR region. All Tariffs will be eliminated in 20 years. Under CAFTA-DR, tariffs on an important U.S. fresh fruit export to the region, fresh apples, declined from an initial base of 15%-25% in CAFTA-DR countries to zero immediately upon enforcement. The specific objective of this research is to analyze the impact of tariff elimination under CAFTA-DR on the trade of U.S. fresh apples. Generalized Method of Moments (GMM) is used for the analysis involving an excess-supply-excess-demand model with monthly trade data from January 2000 to December 2010. The more telling empirical results indicate that for each of the six CAFTA-DR countries, tariff elimination positively promotes U.S. apple exports to this region.

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Paper provided by Southern Agricultural Economics Association in its series 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama with number 119782.

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Date of creation: 2012
Handle: RePEc:ags:saea12:119782
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