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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
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    File URL: http://purl.umn.edu/119782
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    References listed on IDEAS

    as
    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. Meade, Birgit Gisela Saager & Muhammad, Andrew & Rada, Nicholas E., 2011. "Income Growth in Developing Countries Can Increase U.S. Agricultural Exports," Amber Waves, United States Department of Agriculture, Economic Research Service, March.
    3. 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).
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    CAFTA-DR; trade liberalization; tariff elimination; Generalized Method of Moments (GMM); Agricultural and Food Policy; International Relations/Trade; Q17;

    JEL classification:

    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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