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Expansion of Mercosur's Agricultural Exports to the EU: An Empirical Assessment of the Trade Flows

Author

Listed:
  • Niemi, Jyrki S.
  • Huan-Niemi, Ellen
  • Ledebur, Oliver von
  • Salamon, Petra

Abstract

This paper provides new evidence on income and price elasticities of demand for agricultural exports from Mercosur countries to the EU. Econometric models are constructed for eight agricultural commodities - beef, cocoa, coffee, orange juice, poultry, sugar, soya and wheat - exported from Mercosur to the EU. A modelling approach based on the error correction mechanism is used in order to emphasise the importance of the dynamics of trade functions. The results indicate that there is a relatively weak demand response to income and price changes in the EU. However, the results also suggest that relative-price variations affect significantly the demand for Mercosur commodity exports, implying that the exporter's market share is influenced by price competitiveness.

Suggested Citation

  • Niemi, Jyrki S. & Huan-Niemi, Ellen & Ledebur, Oliver von & Salamon, Petra, 2005. "Expansion of Mercosur's Agricultural Exports to the EU: An Empirical Assessment of the Trade Flows," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24606, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae05:24606
    DOI: 10.22004/ag.econ.24606
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    References listed on IDEAS

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    International Relations/Trade;

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