Informal barriers, agricultural trade, and the Euro Area

Marilyne Huchet () and Angela Cheptea

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Abstract: The EU enlargement revives the debate around the participation to the EMU. The accession to a monetary union can affect trade through several channels. In this paper we study the link between the membership to a monetary union and informal barriers to trade. The question we ask is whether the participation to the Euro Area reduces the impact of informal barriers on new members' agricultural trade. In particular, we compare institutional and informational costs on Greek agricultural imports before and after the introduction of the Euro using a gravity model. A first result we find is that the country's accession to the Euro zone has reduced the effect of information flows on its imports of agricultural products from EMU partners. Lower trade costs due to the use of a common currency compensate for the imperfect and incomplete information on foreign markets and partners available to economic agents. Secondly, institutional aspects have become a less important determinant of Greek imports from all countries. Still, this outcome concerns first of all non-EMU suppliers, who – despite their great diversity – are viewed by Greek partners as more homogeneous in terms of institutions' quality after 2001.

Keywords: AGRICULTURAL TRADE; INFORMAL BARRIERS; MONETARY UNION; GRAVITY MODEL; international trade; mathematical model; économie agricole; commerce international; modèle mathématique (search for similar items in EconPapers)
Date: 2007-09-05
Note: View the original document on HAL open archive server: https://hal.science/hal-02285604v1
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Published in Joint seminar IAAE-EAAE, 104. Seminar of the European Association of Agricultural Economics (EAAE): Agricultural Economics and Transition: What was expected, what we observed, the lessons learned, International Association of Agricultural Economists (IAAE). INT.; European Association of Agricultural Economists (EAAE). INT., Sep 2007, Budapest, Hungary. 23 p

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Working Paper: Informal barriers, agricultural trade, and the Euro Area (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02285604

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