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Three Essays on Agricultural and Food Trade Shocks and Regional Integration

This research investigates the impact of disruptions and regional integration on agricultural and food trade, relying on a unique international and intranational (domestic) agri-food trade dataset and structural gravity.
In the first chapter, we investigate the impact of animal diseases on trade of animal-based products. We found that animal disease outbreaks decrease exports by 4% on average per year, amounting to annualized losses of 96 billion of 2019 USD. Trade quantities decline by 8% (51 million tons) on average per year. Impacts are mostly concentrated on consumer products (mainly pork), and low-income and lower-medium-income exporting countries. Our results suggest that animal diseases affect more domestic markets than foreign ones, and that dependent importers are the most sensitive to animal disease outbreaks abroad. Lastly, participation in the same RTA is found to mitigate animal diseases' trade impact, showing another potential channel through which regional integration could affect members' trade.
In the second chapter, we explore the effect of the North American Free Trade Agreement (NAFTA) on agricultural and food trade flows. We consider the entire official lifetime of the agreement, including its 14-years phase-in period, which allow us to offer a comprehensive evaluation of one of the biggest trade agreements on agri-food trade. NAFTA is found to increase members' trade on average by 54%, corresponding to 11.9 billion of 2020 USD, annually. Trade involving Mexico, and especially Canada-Mexico, has increased substantially showing that trade agreements between developed and developing countries could be beneficial to both members. NAFTA's impact is found to be heterogeneous by products with cereals experiencing the biggest increase. Trade of products incompletely liberalized by NAFTA such as dairy, poultry, and eggs, did not increase as much as the trade of liberalized products. We do not find evidence of trade diversion, suggesting that NAFTA's agri-food trade gains did not come at the expense of trading with other partners. Lastly, NAFTA appears to be more trade enhancing (about four times more) than other agreements of Canada, Mexico and the U.S. (e.g. Canada-E.U., or Mexico-Brazil, or U.S.-Korea.) In the third chapter, we question whether trade agreements alleviate the impact of shocks on trade. More specifically, we investigate if RTAs mitigate the impact of exchange rate (ER) volatility on agri-food trade. We found that RTAs amplify the effect of ER volatility on agri-food trade. The trade impact of ER volatility on RTA members is found to be positive, suggesting that members' agri-food trade benefits from ER volatility, contrary to non-members' trade. This could result from larger profits from arbitrage due to reduced trade costs between RTA members. Our results display a strong heterogeneity according to sectors, exporters and importers' income, and level of integration of RTA. Only Partial Scope Agreements, the lowest regional integration level, amplify the effect of ER volatility on members' agri-food trade. / Doctor of Philosophy / This research evaluates the impact of factors that cause trade disruption and the impact of trade agreements on agricultural and food trade. In the first chapter, we investigate the impact of animal diseases on trade of animal-related products. Findings indicate that animal diseases decrease the value of trade on average 4% annually, amounting to 96 billion of 2019 USD annualized loss. Trade quantities are reduced by 8%, or 51 million tons yearly on average. This impact differs with respect to animal diseases, products, and income levels of countries. Animal diseases affect more the domestic market, while countries depending to foreign suppliers are those affected the most by animal disease outbreaks abroad. Regional trade agreements (RTAs) mitigate the impact of animal diseases, showing that trade integration could benefit their members beyond the lowering their tariffs.
In the second chapter, we evaluate the impact of the North American Free Trade Agreement on agri-food trade. We found that NAFTA increased members' trade by 54%, amounting to 11.9 billion of 2020 USD annually on average. NAFTA's trade gains were distributed heterogeneously across members, with trade between Canada and Mexico recording the largest proportional gains. Cereals recorded substantial gains during NAFTA, while the trade of beef and vegetables also increased. The trade though of some products that did not become completely tariff-free by members, such as eggs, dairy, and poultry, underperformed. Lastly, NAFTA increased Canada, Mexico, and U.S. trade about 4.5 times more than the other agreements signed by the three countries.
In the third chapter, we investigate whether RTAs mitigate the impact of exchange rate (ER) volatility on agri-food trade. The results suggest that RTAs amplify the impact of ER volatility, however, this is in favor of RTA members, since the impact of ER volatility on their trade is positive. The results are heterogeneous across sectors, incomes of exporters and importers, and extent of liberalization by RTAs. Partial Scope Agreements, the lowest level of trade liberalizing agreements, are the only type of RTAs that amplify (or affect in general) the effect of ER volatility on members' agri-food trade.

Identiferoai:union.ndltd.org:VTETD/oai:vtechworks.lib.vt.edu:10919/111554
Date18 August 2022
CreatorsSyrengelas, Konstantinos
ContributorsEconomics, Grant, Jason H., Emlinger, Charlotte, Marchant, Mary A., Stewart, Shamar L.
PublisherVirginia Tech
Source SetsVirginia Tech Theses and Dissertation
LanguageEnglish
Detected LanguageEnglish
TypeDissertation
FormatETD, application/pdf
RightsIn Copyright, http://rightsstatements.org/vocab/InC/1.0/

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