Growing U.S. Trade Deficit in Consumer-Oriented Agricultural Products

We investigate the factors behind the growing U.S. trade deficit in consumer-oriented agricultural products by using reliable panel data and an empirical trade model derived from international trade theory. The results indicate that per capita income in the United States appears to be the most important determinant for the growing U.S. trade deficit of consumer-oriented agricultural products. An increase in per capita income and trade liberalization in foreign countries would improve the U.S. trade balance. U.S. foreign direct investment abroad in food manufactures and the North American Free Trade Agreement (NAFTA) are found to have negative effects on the U.S. trade balance.

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Journal Article
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Journal of Agricultural and Applied Economics, 40, 3
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JEL Codes:
F14; Q17

 Record created 2017-04-01, last modified 2020-10-28

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