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Effects of trade diversion and trade creation of MERCOSUR on US and world apple markets

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  • Boya Liu
  • Stephen Devadoss

Abstract

Apples are the third most valuable fruit in the United States and account for 18% of US fruit exports. Chile is a major competitor to the United States in the MERCOSUR market, since it is one of the leading apple producing countries and enjoys the tariff reductions as a member of MERCOSUR. Consequently, Chilean exports displace US exports in MERCOSUR. In addition, other MERCOSUR members import more from lower-cost Chile, leading to a reduction in production and an increase in consumption in these countries. This study develops a theoretical and an empirical model of world apple market to quantify the trade diversion and trade creation effects of the MERCOSUR free trade agreement and to estimate the welfare impacts.

Suggested Citation

  • Boya Liu & Stephen Devadoss, 2013. "Effects of trade diversion and trade creation of MERCOSUR on US and world apple markets," Applied Economics, Taylor & Francis Journals, vol. 45(32), pages 4474-4486, November.
    • Handle: RePEc:taf:applec:v:45:y:2013:i:32:p:4474-4486
    DOI: 10.1080/00036846.2013.788786
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    Citations

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    Cited by:

    1. Stephen Devadoss & William Ridley, 2014. "Effects of the Mexican Apple Tariff on the World Apple Market," Review of Development Economics, Wiley Blackwell, vol. 18(4), pages 763-777, November.
    2. Loitongbam Bishwanjit Singh, 2021. "Impact of India-ASEAN Free Trade Agreement: An Assessment from the Trade Creation and Trade Diversion Effects," Foreign Trade Review, , vol. 56(4), pages 400-414, November.
    3. Dmitriy Aleksandrovich Izotov, 2021. "Trade Integration in the Asia-Pacific Region: Decomposition of Effects," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 1, pages 66-96.
    4. Salamat Ali & Richard Kneller & Chris Milner, 2017. "Market-specific trade costs and firm dynamics in Pakistan: Evaluating the US integrated cargo containers control programme," Discussion Papers 2017-02, University of Nottingham, GEP.
    5. Devadoss, Stephen & Ridley, William, 2024. "Impacts of the Russian invasion of Ukraine on the global wheat market," World Development, Elsevier, vol. 173(C).
    6. Ridley, William & Devadoss, Stephen, 2015. "Argentina's Agricultural Policies," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205421, Agricultural and Applied Economics Association.

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