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Trade creation and trade diversion in the North American Free Trade Agreement: the case of the agricultural sector

Susanto, D.; Rosson, C.P.I.I.I.; Adcock, F.J.

Journal of Agricultural and Applied Economics 39(1): 121-134

2007


ISSN/ISBN: 1074-0708
DOI: 10.1017/s1074070800022793
Accession: 013275304

This paper examines the effect of the U.S.-Mexico trade agreement under the North American Free Trade Agreement (NAFTA). The results suggest that U.S. agricultural imports from Mexico have been responsive to tariff rate reductions applied to Mexican products. A one percentage point decrease in tariff rates is associated with an increase in U.S. agricultural imports from Mexico by 5.31% in the first 6 years of NAFTA and by 2.62% in the last 6 years of NAFTA.

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