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Abstract
The paper focuses on the importance of the assumptions made about market structure and firm
behaviors in empirical trade policy analysis. It does it with reference to the most recent changes in the
EU import regime for bananas, namely the Economic Partnership Agreements and the December
2009 WTO agreement on bananas. The paper’s contribution to the literature on the issues addressed
is threefold: it develops two original models which incorporate imperfectly competitive market
structures in a spatial modeling framework; it provides an assessment of the degree of market power
in international banana trade and, finally, it assesses how the analysis of the implications of the most
recent changes in the EU import regimes for bananas is affected by the assumptions made regarding
the prevailing market structure.