The effects of MCA's on EC trade in agricultural commodities

In response to growing criticism of the effects of MCA's the paper proposed to examine the allegation that MCA's have distorted the pattern of competition in intra-EC trade in agricultural products. The objective proposed by the authors is to discover whether there is any evidence to show that MCA's had favoured the competitive position of strong-currency countries' exports, and hindered those from weak currency areas. For this purpose two types of quantitative analysis, revealed comparative advantage and constant market shares, have been applied to the intra-EC export data of France, Germany and Italy for eight groups of agricultural commodities. The results — particularly those deriving from constant market shares analysis — seem to indicate that MCA's have had an effect on the competitive position of member countries' agricultural exports. The evidence, however, is not conclusive, and it is considered necessary to carry out further analysis by methods that allow identification of the effects not only of the exporting country's MCA's but also of those of the importing country.