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Please use this identifier to cite or link to this item: http://purl.umn.edu/6618

Title: Trade Creation and Trade Diversion in the North American Free Trade Agreement: The Case of the Agricultural Sector
Authors: Susanto, Dwi
Rosson, C. Parr, III
Adcock, Flynn J.
Keywords: agricultural sector
NAFTA
panel data
tariffs
trade creation
trade diversion
JEL Codes: F10
F15
Q17
Q18
C31
C33
Issue Date: 2007-04
Abstract: This paper examines the effect of the U.S.-Mexico trade agreement under the North American Free Trade Agreement (NAFTA). The results suggest that U.S. agricultural imports from Mexico have been responsive to tariff rate reductions applied to Mexican products. A one percentage point decrease in tariff rates is associated with an increase in U.S. agricultural imports from Mexico by 5.31% in the first 6 years of NAFTA and by 2.62% in the last 6 years of NAFTA. U.S. imports from Mexico have also been attributable to the pre-NAFTA tariff rates. Overall, the results indicate that the U.S.-Mexico trade agreement under NAFTA has been trade creating rather than trade diverting.
URI: http://purl.umn.edu/6618
Institution/Association: Journal of Agricultural and Applied Economics>Volume 39, Number 01, April 2007
Total Pages: 14
From Page: 121
To Page: 134
Collections:Volume 39, Number 01, April 2007

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