Expansion of Mercosur's Agricultural Exports to the EU: An Empirical Assessment of the Trade Flows

Jyrki S. Niemi, Ellen Huan-Niemi, Oliver von Ledebur and Petra Salamon

No 24606, 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark from European Association of Agricultural Economists

Abstract: This paper provides new evidence on income and price elasticities of demand for agricultural exports from Mercosur countries to the EU. Econometric models are constructed for eight agricultural commodities - beef, cocoa, coffee, orange juice, poultry, sugar, soya and wheat - exported from Mercosur to the EU. A modelling approach based on the error correction mechanism is used in order to emphasise the importance of the dynamics of trade functions. The results indicate that there is a relatively weak demand response to income and price changes in the EU. However, the results also suggest that relative-price variations affect significantly the demand for Mercosur commodity exports, implying that the exporter's market share is influenced by price competitiveness.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 10
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae05:24606

DOI: 10.22004/ag.econ.24606

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