Assessing the implications of regional preferential market access for meat commodities

Abstract

The authors derive a gravity framework that is compatible with the existence of reference prices for agricultural commodities. A commodity-specific gravity equation, estimated with Poisson pseudo-maximum likelihood and threshold Tobit estimators, is used to investigate the effects of regional trade preferences for meat commodities. The predictions indicate that European Union (EU) tariff-free access and North American Free Trade Agreement (NAFTA) nontariff provisions are the main types of preferences that substantially promoted intraregional trade. In addition, the trade creation effects of the Mercado Comun del Sur (MERCOSUR) and Andean Community of Nations (ANDEAN) are generally the result of nontariff preferences. Moderate trade diversion effects occurred in the case of the EU, NAFTA, and MERCOSUR. [Econ Lit classification: F14, F15, Q17]. © 2011 Wiley Periodicals, Inc.