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Impacts of the U.S.-Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) on U.S. Fruit Exports - the Apple Case

Author

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  • 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 (CAFTA-DR) on U.S. Fruit Exports - the Apple Case," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119783, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea12:119783
    DOI: 10.22004/ag.econ.119783
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    References listed on IDEAS

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    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. 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).
    3. World Bank, 2011. "World Development Indicators 2011," World Bank Publications - Books, The World Bank Group, number 2315.
    4. Meade, Birgit Gisela Saager & Muhammad, Andrew & Rada, Nicholas E., 2011. "Income Growth in Developing Countries Can Increase U.S. Agricultural Exports," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, pages 1-8.
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