Analysis of the determinants of international seafood trade using a gravity model

Abstract

Given the high share of fisheries and aquaculture production entering international trade the analysis of seafood trade is of key importance for any policy measure in the aquaculture and fisheries sectors. In this study a gravity model is developed to explore the influence on seafood trade of primary production, food consumption, population, income, GDP, trade agreements and geographical distance. The model is applied to the entire seafood aggregate, in comparison with meat, over time, and at different levels of aggregation of commodities: by main commercial species, processing and preservation stage and aquaculture versus fisheries origin. From the methodological perspective the model formulation addresses two main issues in gravity models which are the incorporation of a multilateral resistance term and the treatment of zero trade flows. The results of the model indicate the peculiarities of seafood trade in respect of meat and, within the seafood aggregate, the extreme diversification of trade determinants linked to the commercial characteristics of the products. Seafood trade is attracted either by countries with well-established seafood preferences or by countries with low labour costs for further processing, while meat exports are favoured by high per capita income and high primary production of the exporting country. Seafood trade is expanding under the influence of two key forces: one is the growth of aquaculture production and the other is the trade for re-processing. These two phenomena are clearly emerging from the differences in the model coefficients when considering disaggregated seafood trade.