Abstract
The goal of this chapter is to assess the impact of Preferential Trade Agreements (PTA) on European imports of fresh grapes, pears, apples, oranges and mandarins over the period 2001–2004. Monthly rather than yearly data are used in order to take into account the fact that both imports and protection vary seasonally. Furthermore, we determine a measure of preferential margins by also considering quotas and the entry price system. Finally, in the econometric estimations we control for heterogeneity, endogeneity and zero-trade flows. The results show that the impact of preferential policies granted by the European Union (EU) varies depending on the specific commodity considered.
This chapter is largely based on cardamone (2011). The effect of preferential trade agreements on monthly fruit exports to the European Union. Eur Rev of Agric Economics, doi: 10.1093/erae/jbq052.
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- 1.
Euro-Med (Barcelona Process) started in 1995. This partnership involved 15 EU members and 12 Mediterranean countries (Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, Palestinian Territories, Syria, Tunisia, Turkey, Malta and Cyprus), with Libya granted observer status in 1999.
- 2.
The “drugs regime” was a special arrangement signed in 1991with additional benefits for countries affected by the production and trafficking of illegal drugs. In 2005, a more simple and stable GSP regulation was set up. The “drugs regime” was replaced by “GSP-Plus” which is designed for developing countries which meet a number of criteria, such as enforcement of human and labour rights, environmental protection, fight against drugs and good governance.
- 3.
The EBA initiative was introduced in 2001 and gives tariff free and quota free access to all EU imports from the 49 Least Developed Countries (LDC), except for arms and ammunitions.
- 4.
EEC and ACP countries signed their first agreements in 1969 at the Yaoundé Convention. In 1975, the Yaoundé agreements were replaced by those signed at the Lomé Convention, followed in 2000 by the Cotonou Partnership Agreements, which have been replaced in 2008 by the Economic Partnership Agreements (EPA). It should be mentioned that South Africa is not considered in the group of ACP countries because its trade relations with the EU are governed by the Trade Development and Co-operation Agreement, which was signed in Pretoria in 1999. Hence, South-Africa is considered as an RTA eligible country.
- 5.
In Figs. 8.1–8.5 we do not make any assumption about the overlapping of preferences. We report the ratio of EU imports from three groups of countries, i.e., countries eligible for GSP (including EBA and the “drugs regime”), the Cotonou agreements and a RTA, with respect to total EU imports from the same three groups of countries over the period 2001–2004.
- 6.
The high relative import shares observed in 2002 for pears and apples (Figs. 8.2 and 8.3) from ACP countries is due to the high exports from very few countries eligible for both Ordinary GSP and Cotonou agreements. Thus, the particular trend of the ACP exports could be the result of an overlapping of preferences.
- 7.
Even though Eurostat Comext distinguishes between total imports and imports which enter into the EU under a preferential scheme (but it is not specified under which specific PTA), we consider total (preferential and non-preferential) trade flows since we posit the question “what is the impact of PTA on total trade?”.
- 8.
The 191 exporters are all the countries for which trade statistics were available. The list of exporting countries by latitude is reported in the Appendix A.
- 9.
We have two commodities (table grapes, other fresh grapes) at 8 digit level in the fresh grape sector, three commodities in the pear sector (Perry pears, other pears, quince), four commodities (Cider apples, Golden Delicious, Granny Smith, other apples) in the apple sector, five commodities for oranges (blood oranges, sweet oranges, Navels and similar, other sweet oranges, other oranges), and five commodities for mandarins (Clementines, Monreales and Satsumas, Mandarins and Wilkings, Tangerines, other mandarins).
- 10.
In the case of specific tariffs, the specific duty divided by the unit value, determined by using data from Eurostat Comext at HS8 digits, are added to the ad valorem tariffs.
- 11.
The few cases of exports exceeding the quota over the period 2001–2004 refer to Israel and Chile (2003 and 2004) for fresh grapes, Romania for apples, Tunisia and Egypt for oranges, Morocco and Israel (2001) for mandarins.
- 12.
In some cases multiplying two preferential margins gives a variable always equal to zero and this is why sometimes the coefficients of interaction variables do not appear in estimations. It should also be mentioned that the ACP preferential margin when positive is often constant and this is why the ACP coefficient does not always appear.
- 13.
It is worth mentioning that the GSP effect becomes not significant when correcting for endogeneity of preferential variables (Lederman and Özden 2007). In our case, we cannot correct for endogeneity since the endogeneity test shows that the PTA variables are not endogenous.
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Acknowledgments
Financial support received from the “Agricultural Trade Agreements (TRADEAG)” (Specific Targeted Research Project, Contract no. 513666) and the “New Issues in Agricultural, Food and Bio-energy Trade (AGFOODTRADE)” (Grant Agreement no. 212036) research projects, funded by the European Commission, and by the Italian Ministry of Education, University and Research (Scientific Research Program of National Relevance 2007 on “European Union policies, economic and trade integration processes and WTO negotiations” – PUE&PIEC) is gratefully acknowledged. The author acknowledges the very valuable contribution made by Giovanni Anania in identifying the research issues as well as in helping to improve previous versions of the paper. The author is also grateful to Francesco Aiello, Jean-Cristophe Bureau, Alison Burrell, Antonio Cioffi, Maria Cipollina, Luca De Benedictis, Anna-Celia Disdier, Catherine Laroche Dupraz, Alessandro Olper, Priscila Ramos, and Luca Salvatici for their suggestions and comments on earlier versions of the paper.
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Appendices
Appendix A
8.1.1 List of Exporting Countries by Latitude (in Degrees)
Latitude lower than −30: Argentina, Australia, Chile, New Zealand, Uruguay.
Latitude higher than −30 and lower than −15: Bolivia, Botswana, Brazil, Fiji, French Polynesia, Lesotho, Madagascar, Mauritius, Mozambique, Namibia, New Caledonia, Paraguay, South Africa, Swaziland, Tonga, Vanuatu, Zambia, Zimbabwe.
Latitude higher than −15 and lower than 0: Angola, Burundi, Comoros, Congo, Dem. Rep. of the Congo, Ecuador, Indonesia, Kenya, Malawi, Papua New Guinea, Peru, Rwanda, Samoa, Seychelles, Solomon Islands, Tanzania.
Latitude higher than 0 and lower than 15: American Samoa, Aruba, Barbados, Benin, Brunei- Darussalam, Burkina Faso, Cambodia, Cameroon, Cape Verde, Central African Rep., Chad, Colombia, Costa Rica, Côte d'Ivoire, Djibouti, El Salvador, Equatorial Guinea, Ethiopia, FS Micronesia, Gabon, Gambia, Ghana, Grenada, Guam, Guatemala, Guinea, Guinea-Bissau, Guyana, Honduras, Kiribati, Liberia, Malaysia, Maldives, Mali, Marshall Islands, Mayotte, Neth. Antilles, Nicaragua, Niger, Nigeria, Palau, Panama, Philippines, Saint Lucia, Saint Vincent and the Grenadines, Sao Tome and Principe, Senegal, Sierra Leone, Singapore, Somalia, Sri Lanka, Suriname, Thailand, Timor-Leste, Togo, Trinidad and Tobago, Uganda, Venezuela.
Latitude higher than 15 and lower than 30: Antigua and Barbuda, Bahamas, Bahrain, Bangladesh, Belize, Bhutan, Cayman Islands, China Hong Kong SAR, China Macao SAR, Cuba, Dominica, Dominican Rep., Eritrea, Haiti, India, Jamaica, Kuwait, Lao People's Dem. Rep., Mauritania, Mexico, Myanmar, Nepal, Oman, Puerto Rico, Qatar, Saint Kitts and Nevis, Saudi Arabia, Sudan, United Arab Emirates, Viet Nam, Virgin Islands, Yemen.
Latitude higher than 30 and lower than 45: Albania, Algeria, Andorra, Armenia, Azerbaijan, Bermuda, Bosnia Herzegovina, Bulgaria, Canada, China, Cyprus, Egypt, Georgia, Iran, Iraq, Israel, Japan, Jordan, Kazakhstan, Kyrgyzstan, Libya, Lebanon, Malta, Morocco, Pakistan, Rep. of Korea, Romania, San Marino, Serbia and Montenegro, Syria, Tajikistan, TFYR of Macedonia, Tunisia, Turkey, Turkmenistan, USA, West Bank and Gaza, Uzbekistan.
Latitude higher than 45 and lower than 60: Belarus, Channel Islands, Croatia, Czech Rep., Dem. People's Rep. of Korea, Estonia, Hungary, Isle of Man, Latvia, Liechtenstein, Lithuania, Monaco, Mongolia, Norway, Poland, Rep. of Moldova, Russian Federation, Slovakia, Slovenia, Switzerland, Ukraine.
Latitude higher than 60: Faeroe Islands, Greenland, Iceland.
Appendix B
Appendix C
Average share of European Union imports and preferential margins of fresh grapes by country groups, 2001–2004
Average share of European Union imports and preferential margins of pears by country groups, 2001–2004
Average share of European Union imports and preferential margins of apples by country groups, 2001–2004
Average share of European Union imports and preferential margins of oranges by country groups, 2001–2004
Average share of European Union imports and preferential margins of mandarins by country groups, 2001–2004
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Cardamone, P. (2011). Trade Impact of European Union Preferences: An Analysis with Monthly Data. In: De Benedictis, L., Salvatici, L. (eds) The Trade Impact of European Union Preferential Policies. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-16564-1_8
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