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Abstract
A two-country, comparative static partial equilibrium model is used to simulate the ex
ante market and welfare outcomes of U.S. country-of-origin labeling for the U.S.-Mexico
fresh tomato trade. In all scenarios where consumers show a relative preference for U.S.
tomatoes, Mexican tomato exports decline and U.S. production increases. Mexican trade
losses using low- to mid-range consumer preference assumptions are 14% to 32% of the
value of Mexican tomato exports to the United States and 1% to 3% of the total value of
agricultural produce exports, partially negating the market access gains of NAFTA.
Consumer effects are small and sometimes negative. Producer impact is the big effect,
with transfer from Mexican to U.S. tomato producers.