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Quantitative analysis of the impacts of Croatia's agricultural trade policy on the agri-food sector

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  • Weingarten, Peter
  • Frohberg, Klaus
  • Winter, Etti
  • Schreiber, Catrin

Abstract

Croatia recently signed several trade liberalisation agreements. The cornerstones of its trade policy are WTO membership, the Stabilisation and Association Agreement with the EU and Croatia's application of membership as well as bilateral free trade agreements within the Stability Pact for South Eastern Europe. The objective of this paper is to quantify the impact of Croatia's agricultural trade policy on the agri-food sector. For the analysis, a partial equilibrium model based on 1999/2000 data is used. Trade between Croatia and Bosnia and Herzegovina, Hungary, Slovenia, the EU-15 and the rest of the world is modelled for 12 product groups. Three liberalisation scenarios are analysed for the years 2002 and 2005. The scenarios differ with regard to the tariff changes. In general, the model results indicate that reciprocal trade liberalisation is welfare improving for Croatia. The increase in consumer welfare is larger than the decline in farmers' profits and the loss of governmental tariff revenues. In conclusion, the continuation of trade liberalisation is to be recommended. However, trade policy alone will not solve the existing problems of the agri-food sector, and transitional compensation measures could be considered to avoid unacceptable hardship. The benefits of trade liberalisation are primarily to be seen in an improved access to international markets, which probably enables Croatian food processors to realise economies of scale. In addition, internationally binding commitments such as trade agreements are likely to foster the internal and international political credibility and reduce political risks.

Suggested Citation

  • Weingarten, Peter & Frohberg, Klaus & Winter, Etti & Schreiber, Catrin, 2003. "Quantitative analysis of the impacts of Croatia's agricultural trade policy on the agri-food sector," IAMO Discussion Papers 56, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
  • Handle: RePEc:zbw:iamodp:14932
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    References listed on IDEAS

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    1. Rutherford, Thomas F., 1995. "Extension of GAMS for complementarity problems arising in applied economic analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 19(8), pages 1299-1324, November.
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    Cited by:

    1. Möllers, Judith & Zier, Patrick & Frohberg, Klaus & Buchenrieder, Gertrud & Bojnec, Stefan, 2009. "Croatia's EU Accession: Socio-economic Assessment of Farm Households and Policy Recommendations," MPRA Paper 17365, University Library of Munich, Germany.
    2. Etti Maria WINTER & Klaus FROHBERG, "undated". "Using Flexible McFadden Export Supply and Import Demand Functions for Bilateral Trade Policy Analysis," EcoMod2004 330600160, EcoMod.
    3. Möllers, Judith & Zier, Patrick & Frohberg, Klaus & Buchenrieder, Gertrud & Bojnec, Štefan, 2009. "Croatia's EU accession: socio-economic assessment of farm households and policy recommendations," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 48, number 53665.

    More about this item

    Keywords

    Croatia; trade liberalisation; agri-food sector; partial equilibrium analysis; Kroatien; Handelsliberalisierung; Agrar- und Ernährungssektor; partielle Gleichgewichtsanalyse;

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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