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

Author

Listed:
  • Fu, Shengfei
  • Epperson, James E.
  • Ames, Glenn C.W.

Abstract

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.

Suggested Citation

  • Fu, Shengfei & Epperson, James E. & Ames, Glenn C.W., 2012. "Impacts of the U.S.-Central America-Dominican Republic Free Trade Agreement - the Apple Case," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119782, Southern Agricultural Economics Association.
  • Handle: RePEc:ags:saea12:119782
    DOI: 10.22004/ag.econ.119782
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    File URL: https://ageconsearch.umn.edu/record/119782/files/Impacts%20of%20the%20U.S.%20-%20Central%20America%20-%20Dominican%20Republic%20Free%20Trade%20Agreement%20_CAFTA-DR_%20on%20U.S.%20Fruit%20Exports%20_%20the%20Apple%20Case.pdf
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    References listed on IDEAS

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    1. J. Edward Taylor & Antonio Yúnez Naude & Nancy Jesurun-Clements, 2010. "Does Agricultural Trade Liberalization Reduce Rural Welfare in Less Developed Countries? The Case of CAFTA," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(1), pages 95-116.
    2. Morley, Samuel & Nakasone, Eduardo & Pineiro, Valeria, 2007. "The impact of CAFTA on poverty, distribution, and growth in El Salvador:," IFPRI discussion papers 743, International Food Policy Research Institute (IFPRI).
    3. Meade, Birgit Gisela Saager & Muhammad, Andrew & Rada, Nicholas E., 2011. "Income Growth in Developing Countries Can Increase U.S. Agricultural Exports," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, pages 1-8.
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    Keywords

    Agricultural and Food Policy; International Relations/Trade;

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