Mechel S. Paggi

Role of Trade in Satisfying U.S. Fresh Fruit and Vegetable Demand

Increases in U.S. consumer incomes result in an increase in imports share of U.S. consumption. Although U.S. consumers reduce the quantity demanded in response to higher import prices, the reduction is sufficiently inelastic that exporter revenue increases. U.S. Free Trade Agreements have made fresh fruits and vegetables available throughout the year and may also have broadened the U.S. marketing window for imports. Now U.S. food safety regulations favor large operations that can absorb the fixed and seasonal food safety related costs. Therefore, the brunt of the increased import competition is borne by small and medium-size producers.

Potential Impacts of Transatlantic Trade and Investment Partnership (T-TIP) on the Fresh Vegetable and Beef Trade

ABSTRACT The Transatlantic Trade and Investment Partnership (T-TIP) negotiations influence the global economic position of both the European Union (EU) and the United States (U.S.). Agricultural issues are an important part of the negotiation. There have been several analyses of the aggregate impacts of a T-TIP agreement. This report analyzes the commodity impacts on trade for fresh vegetables and beef. Vegetables represent the situation where the U.S. is a growing net importer and the EU has substantial potential for expanding exports to the U.S. in this highly competitive marketplace. Beef represents the situation where sanitary and phytosanitary restrictions on hormone use in production have prohibited consumer choices from being revealed in the marketplace for both the EU and the U.S. The authors provide insight into where the comparative advantages lie in freer trade situations.

Latin American Agriculture in a World of Trade Agreements

Latin American and Caribbean (LAC) countries are members of 29 distinct free trade agreements with other Latin American partners, and 44 such agreements exist between an LAC country and other countries. Among the LAC countries linked by an Free Trade Agreement (FTA), a large percentage of trade is already duty free though many trade barriers in agriculture persist. There is a significant difference in the trade patterns among the LAC countries. The Southern Cone countries, for example, have extensive agricultural exports to Asia and to the European Union (EU), and have few FTAs with regional countries. By contrast, countries in Central America and the Andean region have extensive trade agreements with each other, and have fewer exports outside the region. Meanwhile, other regions are negotiating ambitious mega-agreements, particularly the Trans Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (T-TIP). These could have significant impacts on the region, including trade diversion and preference erosion in major import markets. Several possible avenues exist for Latin American countries to accomplish the following: counter the impact of a TPP and T-TIP on agricultural exports; strengthen existing bilateral trade agreements within the region; link existing multi-country agreements such as Mercado ComAon del Sur (MERCOSUR) and the Pacific Alliance to North American Free Trade Agreement (NAFTA); consolidate the current trade agreements with the EU; or sign on to the TPP. This last option would be more attractive if China were to become a TPP participant. If China is not interested in joining the TPP, then for some countries a direct FTA with China could be contemplated.