The Impact of Central American Free Trade Area (CAFTA) on the United States sugar market

This paper tries to estimate the impact of establishment of CAFTA on the United States sugar market. We use the United States sugar demand elasticity and the amount of increase in the U.S. sugar import quota under CAFTA agreement to estimate the magnitude of this effect. This study shows that these increased imports will result in a decrease in the U.S. domestic sugar price of about 1.7 cents, or approximately 8.6 percent. Although it amounts to only pennies per pound, this decrease in the domestic price could result in the incursion of significant U.S. government expenditures given the current structure of the U.S. non-recourse loan program.International Relations/Trade,

The Exchange Rate and Inward Foreign Direct Investment in Mexico

This paper analyzed the exchange rate and inward foreign direct investment (FDI) in Mexico from the 25 developed countries comprising the Organization for Economic Co-operation and Development (OECD). Our empirical result does not support the significant relationship between exchange rate and exchange rate volatility to determine FDI in Mexico. The wages, export, and distance are found to be significant variables to determine FDI in Mexico which is supported by literatures.Exchange rate, Foreign direct investment, Mexico, OECD, International Relations/Trade,

Bilateral Trade and Economic Growth: The Empirical Evidence Between U.S. and South Korea

This paper analyzes the relationships between bilateral trade and economic growth in the U.S. and Korean economies. Using quarterly data from 1990 to 2008, the theoretical procedures utilize Ordinary Least Square (OLS) and Seemingly Unrelated Regression (SUR) models under the static model assumption, an Impulse Response Function (IRF) and Forecast Error Variation Decomposition (FEVD) under the Vector Autoregressive (VAR) model, and Granger causality tests. Empirical results indicate a causal relationship between bilateral export growth and economic growth for the U.S. and Korean economies. The export-led growth (ELG) hypothesis is strongly supported by the results of Granger causality tests on Korean exports.export-led growth, bilateral trade, Granger causality, South Korea, United States, International Relations/Trade, Political Economy, Production Economics,

Production Response to Increased Imports: The Case of U.S. Sugar

This paper considers how the welfare of U.S. sugar producers can be affected by the use of production controls in the presence of rising sugar imports and falling sugar prices, taking into account the negative externalities associated with U.S. sugar production. Even if production controls are used, producer welfare can be affected negatively under rising imports.import quota, production quota, supply management, U.S. sugar, Agribusiness, Agricultural and Food Policy, Crop Production/Industries, International Relations/Trade, Production Economics, Productivity Analysis, F13, F14, Q17,

Empirical Evidences from a Coffee Paradox: An Export Supply/Price Asymmetry Approach

This paper aims to determine the solidity of the notion of the "coffee paradox" using annual data from 1977 to 2007. In the confines of an export supply model, we analyze the effects of export coffee price on export volume. Price and profit equation are used to determine the effects of market power on export coffee price and measure changes in the retail and export price. We also estimate the elasticity of transmission and price asymmetry as a means of verifying the "coffee paradox." Ordinary Least Square (OLS), Instrumental Variables (IV), and simultaneous equation with Seemingly Unrelated Regressions (SUR) methods of econometric analysis are employed. Empirical results suggest that the world coffee market is characterized by "coffee paradox" due to different changes between retail and export prices of coffee, and that it is the existence of market power in importing countries that is the main contributor to the condition of price asymmetry.export supply model, coffee paradox, elasticity of transmission, price asymmetry, price equation, profit equation, Agribusiness, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, International Relations/Trade,

A GAME THEORETIC ANALYSIS OF TURKISH ACCESSION TO A EUROPEAN CUSTOMS UNION

The entrance of additional countries into a European customs union, in this case Turkey, and its impact on agriculture are examined. Results from a trade simulation model are used as components of a Political Preference Function and utilized within a game theoretic framework to identify the optimal strategies for Turkey, the EU, and the U.S. Turkey's best interest, from an agricultural perspective, involves adoption of agreements made in the Uruguay round of GATT as a developing country rather than applying EU protection. Although free trade is not the optimal solution, simulations indicate that the solution does involve the reduction of agricultural protection levels.International Relations/Trade,

A DYNAMIC IMPORT DEMAND ANALYSIS OF HONDURAN COFFEE

The responsiveness of import demand for Honduran coffee to changing economic environments in its main trading partners was studied. Estimation included Johansen cointegration analysis and VAR models with Monte Carlo simulated error bands. Results indicate a significant response of Honduran coffee sales to changes in importers' incomes and import prices.International Relations/Trade,

WELFARE EFFECTS OF AGRICULTURAL TRADING BLOCS: THE SIMULATION OF A NORTH AMERICAN CUSTOMS UNION

Agricultural trade liberalization among the three North American Free Trade Agreement (NAFTA) signatories is modeled using a political preference function. The model distinguishes among Canada, Mexico, the United States, and a politically passive rest of the world. Through the use of intracountry compensation, the analysis shows that, from an agricultural perspective, economic integration is in the best interest of the group as a whole, although not in the best interest of individual countries. More specifically, of the agricultural production sectors, Canadian dairy, Mexican corn, and U.S. beef producers suffer the greatest losses from the formation of North American customs union.International Relations/Trade,

Effects of Catfish, Crawfish, and Shrimp Imports on U.S. Domestic Prices

Recent increases in imports of catfish, crawfish, and shrimp have caused concern as to their impact on domestic prices. This study seeks to identify the linkages between imports of these goods and producer prices. Increases in imports of catfish and shrimp are shown to decrease related domestic prices. However, recent trends show a simultaneous increase in both imports and domestic prices of crawfish.Resource /Energy Economics and Policy,

Demand System Analysis of the South Korean Beef Market with the Free Trade Demand Model

In this study a demand system analysis for beef in South Korea is constructed. A free trade demand system was used in which the economic welfare of market participants are maximized. Recognizing implicit discrimination about non-locally sourced beef products, this study deduces market demand equations with respect to consumer preference in order to identify the marginal effect of change consumer preference has on market demand.Demand and Price Analysis, International Relations/Trade, Research Methods/ Statistical Methods,