## _wp0521

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---

### Introduction and research objective
- Applies gravity equations to an extensive bilateral trade data set for agricultural products to:
  - Characterize the pattern of agricultural trade worldwide.
  - Investigate determinants of agricultural trade.
  - Use dummy variables to compare trade performance of country groups by region, stage of development, and trading blocs.
- Purpose: identify which groups import relatively less or export relatively more after controlling for standard trade determinants, providing evidence on protectionist practices or advantages created by subsidies.
- Novelty claim: "This is the first paper that provides a detailed empirical analysis of agricultural trade using a gravity model."

### Key high-level findings (preview)
- Rich countries import relatively fewer agricultural products than other countries; this gap increased in the 1990s.
- Rich countries that are part of NAFTA and the EU appear to export relatively more agricultural products than other countries—potentially reflecting substantial subsidies to farming activities.
- Latin America and Africa also appear relatively closed to agricultural trade themselves, despite perceptions of them being victims of rich-country protectionism.

### Historical patterns and aggregate statistics (1950–2002)
- Total world trade and agricultural trade growth (in US$ billion and average volume growth in the decade):
  - Total Trade (in US$ billion): 1950-52: 30.5; 1960-62: 56.1; 1970-72: 149.1; 1980-82: 802.7; 1990-92: 1,997.4; 2000-02: 6,191.7
  - Total Trade average volume growth in the decade (%): 1950s: 7.1; 1960s: 9.0; 1970s: 5.9; 1980s: 3.7; 1990s: 5.8; 2000-02: 4.4
  - Agricultural Trade (in US$ billion): 1950-52: 11.7; 1960-62: 15.0; 1970-72: 26.6; 1980-82: 106.0; 1990-92: 205.6; 2000-02: 487.0
  - Agricultural Trade average volume growth in the decade (%): 1950s: 4.8; 1960s: 4.2; 1970s: 3.1; 1980s: 2.1; 1990s: 3.6; 2000-02: 3.3
  - Share of Agriculture in Total Trade (%): 1950-52: 38.4; 1960-62: 26.7; 1970-72: 17.8; 1980-82: 13.2; 1990-92: 10.3; 2000-02: 7.9
- Long-run average annual growth rates (1950–2002):
  - Volume of total trade: yearly average of 6.3 percent.
  - Volume of trade in manufactures: yearly average of 7.7 percent.
  - Volume of trade in agricultural goods: yearly average of 3.6 percent.

### Evolution of world trade by selected country groups (1990–2002)
- World imports (in billions of US dollars):
  - Total Goods: 1990-92: 1,997.4; 2000-02: 6,191.7; % change: 210
  - Agricultural Goods: 1990-92: 205.6; 2000-02: 487.0; % change: 137
- EU imports:
  - Total Goods: 1990-92: 640.0; 2000-02: 2,224.0; % change: 248
  - Agricultural Goods: 1990-92: 76.9; 2000-02: 206.4; % change: 168
    - from OECD: 1990-92: 54.8; 2000-02: 160.4; % change: 193
      - of which EU: 1990-92: 48.3; 2000-02: 136.0; % change: 182
- OECD imports:
  - Total Goods: 1990-92: 1,612.0; 2000-02: 4,732.3; % change: 194
  - Agricultural Goods: 1990-92: 172.1; 2000-02: 372.1; % change: 116
    - from OECD: 1990-92: 117.7; 2000-02: 270.4; % change: 130
      - of which EU: 1990-92: 64.4; 2000-02: 167.1; % change: 160
    - from LDCs: 1990-92: 1.8; 2000-02: 3.6; % change: 101
- LDCs imports:
  - Total Goods: 1990-92: 4.42; 2000-02: 18.10; % change: 309
  - Agricultural Goods: 1990-92: 0.84; 2000-02: 3.35; % change: 300
    - from OECD: 1990-92: 0.41; 2000-02: 1.46; % change: 262
      - of which EU: 1990-92: 0.15; 2000-02: 0.84; % change: 450
    - from LDCs: 1990-92: 0.02; 2000-02: 0.14; % change: 500
- Source note: "Source: WTO and United Nations (Comtrade database). In billions of US dollars, unless otherwise noted."

### Trade liberalization patterns and distributional concerns
- Progress in liberalizing agricultural trade has been substantially more modest than in other sectors.
- Between 1990–92 and 2000–02:
  - Total world trade increased by nearly 210 percent (from an average of about US$ 2 trillion a year in 1990–92 to US$ 6.2 trillion in 2000–02).
  - Trade in agricultural goods increased by about 140 percent.
  - The share of agricultural goods in world trade fell from about 10.3 percent in the early 1990s to 7.8 percent in the early 2000s.
- Developing-country complaints supported by evidence:
  - Agricultural exports of less developed countries grew much more slowly than agricultural exports of OECD and EU members in 1990–2002.
  - Agricultural imports into OECD and EU countries originate overwhelmingly from other industrialized nations, and this trend strengthened during the 1990s.
  - The only notable market-share gains for agricultural exports of LDCs during the last decade were in other LDCs.

### Tariff trends and trade protection
- Tariffs applied by some groups (selected figures):
  - Developed Countries — Total Goods: 1990 = 6.9; 2002 = 3.3; Std. Deviation 1990 = 8.9; 2002 = 9.5; Weighted Average 1990 = 5.4; 2002 = 8.9; From LDCs 1990 = 5.6; 2002 = 2.0.
  - Developed Countries — Agricultural Products: 1990 = 7.5; 2002 = 3.6; Std. Deviation 1990 = 10.6; 2002 = 20.5; Weighted Average 1990 = 3.3; 2002 = 6.7; From LDCs 1990 = 7.9; 2002 = 4.6.
  - LDCs — Total Goods: 1990 = 24.0; 2002 = 15.1; Std. Deviation 1990 = 23.9; 1990 Weighted Average = 11.5; 1990 From LDCs = 31.2; 2002 From LDCs = 12.7; From EU 1990 = 13.6; 2002 = 12.0.
  - LDCs — Agricultural Products: 1990 = 25.0; 2002 = 18.3; Std. Deviation 1990 = 22.4; 2002 = 11.8; Weighted Average 1990 = 38.9; 2002 = 17.2; From LDCs 1990 = 16.5; 2002 = 13.3.
- Aggregate observations:
  - Tariffs imposed by developed nations on EU agricultural exports declined from 7.9 percent in 1990 to 4.6 percent in 2002.
  - Total goods aggregate shown moving from 5.4 percent in 1990 to 8.9 percent in 2002, driven mainly by agricultural tariffs increasing from 3.3 percent to 6.6 percent (text statement).
- OECD agricultural support and distortions:
  - Total agricultural support in OECD countries in 2002 = US$ 318 billion, or 1.2 percent of GDP.
  - Average support in 1990–92 = 2 percent of GDP.
  - About 70 percent of OECD support is given through output payments or direct price support.
  - Prices received by OECD farmers were estimated to be about 30 percent higher than world prices.
- Cross-country tariff patterns (2002):
  - Tariffs imposed by LDCs on agricultural products coming from the EU were, on average, 4 percentage points lower than those levied on products coming from other LDCs.
  - Indonesia, the Philippines, the Russian Federation, and the Mercosur countries in 2002 imposed tariffs on agricultural products that fell slightly more heavily on developed countries’ exports than on LDCs exports.

### Data, coverage, and processing
- Agricultural imports: 152 countries, main trading partners, periods 1990–93 and 1999–2002 from World Integrated Trade Solution Database (WITS), which compiles United Nations and WTO data.
- GDP, GDP per capita, share of agriculture in GDP, rural population density: World Development Indicators Database (World Bank).
- Countries’ areas: World Fact Book (CIA).
- Distances: EARTH software via a United States Department of Agriculture web page.
- Data processing:
  - Series averaged over two periods: 1990–93 and 1999–2002.
  - Final data set used in estimation: 18,200 observations.
  - Note: Data for 1990 for LDCs refers to the group of sub-Saharan countries.

### Econometric model specification
- General log specification (variables listed as in source):
  - Mt = Distance + Remoteness + SGDPt + BGD Pt + SPCGDPt + BPCGDPt + SAREA + BAREA + SRPDt + BRPDt + SSAGDPt + BSAGDPt + Landl + Border + Comlang + Comcol + Colony + Island + FTA + Comcur + φi + D99 + DI + Et.
- Key variable definitions:
  - Mt: real US dollar amount of agricultural products imported at time t.
  - Distance and Remoteness: bilateral distance and exporter remoteness (GDP-weighted average of main trading partners).
  - SGDPt, BGDPt: seller and buyer real GDP.
  - SPCGDPt, BPCGDPt: seller and buyer real per capita GDP.
  - SAREA, BAREA: seller and buyer physical area.
  - SRPD, BRPD: seller and buyer rural population density.
  - SSAGDPt, BSAGDPt: seller and buyer share of agriculture in GDP.
  - Landl, Island, Border, Comlang, Comcur, Comcol, Colony, FTA, φi, D99, DI (regional and income dummies including Brich defined as importing countries with income per capita exceeding US$ 10,000; BothRich; Susacan; Seu).

### Main empirical findings (selected coefficients and interpretation)
- Model fit and sign consistency:
  - All parameter estimates in the basic specification have expected signs: distance negative, economic size positive, exporting country remoteness positive.
  - Higher share of agriculture in GDP associated with higher exports; higher rural population density associated with lower exports.
  - Buyer land area negatively related to imports; exporter land area dropped from estimation for insignificance.
  - Geopolitical/historical factors: landlocked status reduces trade; common border, common language, same colonizer, or colony relationship increase trade.
  - Regional FTAs increase agricultural trade.
- Selected coefficient values (preserved as reported):
  - Distance coefficients across specifications range: I = -1.05; II = -2.13; III = -2.12; IV = -2.12; V = -2.12.
  - Remoteness ≈ 1.17–1.18 across models.
  - Seller GDP (Sgdp) ≈ 0.81–0.82; Buyer GDP (Bgdp) ≈ 0.87–0.95 depending on specification.
  - Share of agriculture in GDP (Ssagdp) ≈ 0.34–0.35.
  - Rural population density (Srpd) ≈ -0.24.
  - Border ≈ 0.65–0.81.
  - FTA ≈ 1.01–1.15; Colony ≈ 1.43–1.45.
  - R2 in main specifications ≈ 0.585–0.586; Schwarz Criterion ≈ 1.5697–1.5706.
- Income-related dummies:
  - Brich (importers with per capita income > US$ 10,000):
    - Column III: Brich = -0.51 (t = -2.1).
    - Column V: Brich = -0.43 (t = -1.8); BothRich = 0.23 (t = 3.5).
    - Interpretation: Brich suggests agricultural imports by these countries are about 40 percent lower than expected.
  - BrichL (Brich in the second period 1999–2002): Column IV = -0.18 (t = -3.2), indicating richer countries imported even fewer agricultural goods in the second period.
- Exporter block dummies:
  - Susacan (U.S. and Canada as exporters) and Seu (EU exporters) — Column VI:
    - Susacan = 0.39 (t = 3.9); Seu = 0.46 (t = 8.1).
    - Interpretation: these exporters export about 48 percent more agricultural goods than expected.
  - Time interaction results — Column VII:
    - SusacanL = -0.18 (t = -1.5); SeuL = 0.14 (t = 2.2).
    - Interpretation: “Overexporting” by the United States and Canada declined in the later period; overexporting by EU countries increased.
- Regional dummies (Columns VIII–X):
  - Africa ≈ -0.29 to -0.35 (fewer imports than expected).
  - LA (Latin America) ≈ -0.74 to -0.84 (fewer imports than expected).
  - Asia ≈ 0.15 to 0.23 (more imports than expected).
  - MED (Middle East) ≈ 0.45 to 0.57 (more imports than expected).
  - Inclusion of regional dummies did not alter main conclusions about rich-country import behavior or exporter overexporting.

### Conclusions and policy-relevant implications
- Agricultural trade has lagged merchandise trade growth; LDCs benefited relatively less than industrialized nations like members of the EU.
- Evidence consistent with protectionism/subsidy effects:
  - Industrialized nations import fewer and export more agricultural products than expected given size, distance, and geopolitical controls.
  - Countries with per capita income greater than US$ 10‚000 tend to import fewer agricultural products and tend to trade more with each other (BothRich positive).
  - NAFTA and EU industrialized nations export substantially more agricultural goods than expected, compatible with farming subsidies and incentives giving them an advantage.
- Dynamics through the 1990s:
  - Overexporting by the United States and Canada declined through the 1990s, possibly reflecting relative reductions in farming subsidies.
  - Overexporting by EU countries increased in the same period despite a reduction in farming subsidies, possibly associated with observed reduction of tariffs faced by agricultural products coming from the region.
- Additional observation:
  - Many developing countries (notably Latin America and Africa) also import less than expected, indicating they maintain important barriers to agricultural trade as well.

*Source: _wp0521 - 1. Total and Agriculture Trade in the World 1950–2002 (excerpt).*

### 1. Total and Agriculture Trade in the World 1950–2002 ..........................................................4

### 1. Total and Agriculture Trade in the World 1950–2002

### Introduction and research objective
- Applies gravity equations to an extensive bilateral trade data set for agricultural products to:
  - Characterize the pattern of agricultural trade worldwide.
  - Investigate determinants of agricultural trade.
  - Use dummy variables to compare trade performance of country groups by region, stage of development, and trading blocs.
- Purpose: identify which groups import relatively less or export relatively more after controlling for standard trade determinants, providing evidence on protectionist practices or advantages created by subsidies.
- Novelty claim: "This is the first paper that provides a detailed empirical analysis of agricultural trade using a gravity model."

### Key high-level findings (preview)
- Rich countries import relatively fewer agricultural products than other countries; this gap increased in the 1990s.
- Rich countries that are part of NAFTA and the EU appear to export relatively more agricultural products than other countries—potentially reflecting substantial subsidies to farming activities.
- Latin America and Africa also appear relatively closed to agricultural trade themselves, despite perceptions of them being victims of rich-country protectionism.

### Historical patterns and aggregate statistics (1950–2002)
- Total world trade and agricultural trade growth (in US$ billion and average volume growth in the decade):
  - Total Trade (in US$ billion): 1950-52: 30.5; 1960-62: 56.1; 1970-72: 149.1; 1980-82: 802.7; 1990-92: 1,997.4; 2000-02: 6,191.7
  - Total Trade average volume growth in the decade (%): 1950s: 7.1; 1960s: 9.0; 1970s: 5.9; 1980s: 3.7; 1990s: 5.8; 2000-02: 4.4
  - Agricultural Trade (in US$ billion): 1950-52: 11.7; 1960-62: 15.0; 1970-72: 26.6; 1980-82: 106.0; 1990-92: 205.6; 2000-02: 487.0
  - Agricultural Trade average volume growth in the decade (%): 1950s: 4.8; 1960s: 4.2; 1970s: 3.1; 1980s: 2.1; 1990s: 3.6; 2000-02: 3.3
  - Share of Agriculture in Total Trade (%): 1950-52: 38.4; 1960-62: 26.7; 1970-72: 17.8; 1980-82: 13.2; 1990-92: 10.3; 2000-02: 7.9
- Long-run average annual growth rates (1950–2002):
  - Volume of total trade: yearly average of 6.3 percent.
  - Volume of trade in manufactures: yearly average of 7.7 percent.
  - Volume of trade in agricultural goods: yearly average of 3.6 percent.

### Evolution of world trade by selected country groups (1990–2002) — key numbers from Table 2
- World imports (in billions of US dollars):
  - Total Goods: 1990-92: 1,997.4; 2000-02: 6,191.7; % change: 210
  - Agricultural Goods: 1990-92: 205.6; 2000-02: 487.0; % change: 137
- EU imports:
  - Total Goods: 1990-92: 640.0; 2000-02: 2,224.0; % change: 248
  - Agricultural Goods: 1990-92: 76.9; 2000-02: 206.4; % change: 168
    - from OECD: 1990-92: 54.8; 2000-02: 160.4; % change: 193
      - of which EU: 1990-92: 48.3; 2000-02: 136.0; % change: 182
- OECD imports:
  - Total Goods: 1990-92: 1,612.0; 2000-02: 4,732.3; % change: 194
  - Agricultural Goods: 1990-92: 172.1; 2000-02: 372.1; % change: 116
    - from OECD: 1990-92: 117.7; 2000-02: 270.4; % change: 130
      - of which EU: 1990-92: 64.4; 2000-02: 167.1; % change: 160
    - from LDCs: 1990-92: 1.8; 2000-02: 3.6; % change: 101
- LDCs imports:
  - Total Goods: 1990-92: 4.42; 2000-02: 18.10; % change: 309
  - Agricultural Goods: 1990-92: 0.84; 2000-02: 3.35; % change: 300
    - from OECD: 1990-92: 0.41; 2000-02: 1.46; % change: 262
      - of which EU: 1990-92: 0.15; 2000-02: 0.84; % change: 450
    - from LDCs: 1990-92: 0.02; 2000-02: 0.14; % change: 500

- Source note for Table 2: "Source: WTO and United Nations (Comtrade database). In billions of US dollars, unless otherwise noted."

### Trade liberalization patterns and distributional concerns
- Progress in liberalizing agricultural trade has been substantially more modest than in other sectors.
- Between 1990–92 and 2000–02:
  - Total world trade increased by nearly 210 percent (from an average of about US$ 2 trillion a year in 1990–92 to US$ 6.2 trillion in 2000–02).
  - Trade in agricultural goods increased by about 140 percent.
  - The share of agricultural goods in world trade fell from about 10.3 percent in the early 1990s to 7.8 percent in the early 2000s.
- Developing-country complaint supported by evidence:
  - Agricultural exports of less developed countries grew much more slowly than agricultural exports of OECD and EU members in 1990–2002.
  - Agricultural imports into OECD and EU countries originate overwhelmingly from other industrialized nations, and this trend strengthened during the 1990s.
  - The only notable market-share gains for agricultural exports of LDCs during the last decade were in other LDCs.

### Structure of the remainder of the paper (as stated)
- Section III: Data description, model estimates and results.
- Final section: Concluding remarks.

*Source: _wp0521 - 1. Total and Agriculture Trade in the World 1950–2002 (excerpt).*

### 5.4 percent in 1990 to 8.9 percent in 2002, reflecting mainly an increase in agricultural tariffs

### _wp0521 - 5.4 percent in 1990 to 8.9 percent in 2002, reflecting mainly an increase in agricultural tariffs

### Tariff trends and trade protection
- Tariffs applied by some groups:
  - Developed Countries — Total Goods: 1990 = 6.9; 2002 = 3.3; Std. Deviation 1990 = 8.9; 2002 = 9.5; Weighted Average 1990 = 5.4; 2002 = 8.9; From LDCs 1990 = 5.6; 2002 = 2.0.
  - Developed Countries — Agricultural Products: 1990 = 7.5; 2002 = 3.6; Std. Deviation 1990 = 10.6; 2002 = 20.5; Weighted Average 1990 = 3.3; 2002 = 6.7; From LDCs 1990 = 7.9; 2002 = 4.6.
  - LDCs — Total Goods: 1990 = 24.0; 2002 = 15.1; Std. Deviation 1990 = 23.9; 1990 Weighted Average = 11.5; 1990 From LDCs = 31.2; 2002 From LDCs = 12.7; From EU 1990 = 13.6; 2002 = 12.0.
  - LDCs — Agricultural Products: 1990 = 25.0; 2002 = 18.3; Std. Deviation 1990 = 22.4; 2002 = 11.8; Weighted Average 1990 = 38.9; 2002 = 17.2; From LDCs 1990 = 16.5; 2002 = 13.3.
- Aggregate observations:
  - Tariffs imposed by developed nations on EU agricultural exports declined from 7.9 percent in 1990 to 4.6 percent in 2002.
  - Tariffs applied by some groups rose: total goods aggregate shown moving from 5.4 percent in 1990 to 8.9 percent in 2002, driven mainly by agricultural tariffs increasing from 3.3 percent to 6.6 percent (text statement).

### Protectionism, subsidies, and market effects
- OECD agricultural support and distortions:
  - Total agricultural support in OECD countries in 2002 = US$ 318 billion, or 1.2 percent of GDP.
  - Average support in 1990–92 = 2 percent of GDP.
  - About 70 percent of OECD support is given through output payments or direct price support.
  - Prices received by OECD farmers were estimated to be about 30 percent higher than world prices.
- Cross-country tariff patterns (2002):
  - Tariffs imposed by LDCs on agricultural products coming from the EU were, on average, 4 percentage points lower than those levied on products coming from other LDCs.
  - In contrast, Indonesia, the Philippines, the Russian Federation, and the Mercosur countries in 2002 imposed tariffs on agricultural products that fell slightly more heavily on developed countries’ exports than on LDCs exports.

### Data used
- Coverage and sources:
  - Agricultural imports: 152 countries, main trading partners, periods 1990–93 and 1999–2002 from World Integrated Trade Solution Database (WITS), which compiles United Nations and WTO data.
  - GDP, GDP per capita, share of agriculture in GDP, rural population density: World Development Indicators Database (World Bank).
  - Countries’ areas: World Fact Book (CIA).
  - Distances: EARTH software via a United States Department of Agriculture web page.
- Data processing:
  - Series averaged over two periods: 1990–93 and 1999–2002.
  - Final data set used in estimation: 18,200 observations.
  - Note: Data for 1990 for LDCs refers to the group of sub-Saharan countries.

### Econometric model specification
- General log specification (variables listed as in source):
  - Mt = Distance + Remoteness + SGDPt + BGD Pt + SPCGDPt + BPCGDPt + SAREA + BAREA + SRPDt + BRPDt + SSAGDPt + BSAGDPt + Landl + Border + Comlang + Comcol + Colony + Island + FTA + Comcur + φi + D99 + DI + Et.
- Key variable definitions preserved:
  - Mt: real US dollar amount of agricultural products imported at time t.
  - Distance and Remoteness: bilateral distance and exporter remoteness (GDP-weighted average of main trading partners).
  - SGDPt, BGDPt: seller and buyer real GDP.
  - SPCGDPt, BPCGDPt: seller and buyer real per capita GDP.
  - SAREA, BAREA: seller and buyer physical area.
  - SRPD, BRPD: seller and buyer rural population density.
  - SSAGDPt, BSAGDPt: seller and buyer share of agriculture in GDP.
  - Landl, Island, Border, Comlang, Comcur, Comcol, Colony, FTA, φi, D99, DI (regional and income dummies including Brich defined as importing countries with income per capita exceeding US$ 10,000; BothRich; Susacan; Seu).

### Main empirical findings (summary of results and key coefficients)
- General model fit and sign consistency:
  - All parameter estimates in the basic specification have expected signs: distance negative, economic size positive, exporting country remoteness positive.
  - Higher share of agriculture in GDP associated with higher exports; higher rural population density associated with lower exports.
  - Buyer land area negatively related to imports; exporter land area dropped from estimation for insignificance.
  - Geopolitical/historical factors: landlocked status reduces trade; common border, common language, same colonizer, or colony relationship increase trade.
  - Regional FTAs increase agricultural trade.
- Specific coefficient-based results (selected reported coefficients and statistics):
  - Distance coefficients across specifications range (examples): I = -1.05; II = -2.13; III = -2.12; IV = -2.12; V = -2.12.
  - Remoteness ≈ 1.17–1.18 across models.
  - Seller GDP (Sgdp) ≈ 0.81–0.82; Buyer GDP (Bgdp) ≈ 0.87–0.95 depending on specification.
  - Share of agriculture in GDP (Ssagdp) ≈ 0.34–0.35.
  - Rural population density (Srpd) ≈ -0.24.
  - Border ≈ 0.65–0.81 (significant positive effect).
  - FTA ≈ 1.01–1.15 (positive effect); Colony ≈ 1.43–1.45 (strong positive effect).
  - R2 in main specifications ≈ 0.585–0.586; Schwarz Criterion ≈ 1.5697–1.5706.
- Income-related dummies:
  - Brich (importers with per capita income > US$ 10,000):
    - Column III: Brich = -0.51 (t = -2.1).
    - Column V: Brich = -0.43 (t = -1.8); BothRich = 0.23 (t = 3.5).
  - Interpretation: Brich suggests agricultural imports by these countries are about 40 percent lower than expected (consistent with the textual interpretation that industrialized countries import fewer agricultural goods than average).
  - BrichL (Brich in the second period 1999–2002): coefficient reported in Column IV = -0.18 (t = -3.2), indicating richer countries imported even fewer agricultural goods in the second period.
- Exporter block dummies:
  - Susacan (U.S. and Canada as exporters) and Seu (EU exporters) — Column VI:
    - Susacan = 0.39 (t = 3.9); Seu = 0.46 (t = 8.1).
    - Interpretation: these exporters export about 48 percent more agricultural goods than expected, compatible with the role of subsidies and support in industrialized nations.
  - Time interaction results — Column VII:
    - SusacanL = -0.18 (t = -1.5); SeuL = 0.14 (t = 2.2).
    - Interpretation: “Overexporting” by the United States and Canada declined in the later period; overexporting by EU countries increased.
- Regional dummies (Columns VIII–X):
  - Africa ≈ -0.29 to -0.35 (fewer imports than expected).
  - LA (Latin America) ≈ -0.74 to -0.84 (fewer imports than expected).
  - Asia ≈ 0.15 to 0.23 (more imports than expected).
  - MED (Middle East) ≈ 0.45 to 0.57 (more imports than expected).
  - Inclusion of regional dummies did not alter main conclusions about rich-country import behavior or exporter overexporting.

### Conclusions and policy-relevant implications (as stated in source)
- Agricultural trade has lagged merchandise trade growth; LDCs benefited relatively less than industrialized nations like members of the EU.
- Evidence consistent with protectionism/subsidy effects:
  - Industrialized nations import fewer and export more agricultural products than expected given size, distance, and geopolitical controls.
  - Countries with per capita income greater than US$ 10‚000 tend to import fewer agricultural products and tend to trade more with each other (BothRich positive).
  - NAFTA and EU industrialized nations export substantially more agricultural goods than expected, compatible with farming subsidies and incentives giving them an advantage.
- Dynamics through the 1990s:
  - Overexporting by the United States and Canada declined through the 1990s, possibly reflecting relative reductions in farming subsidies.
  - Overexporting by EU countries increased in the same period despite a reduction in farming subsidies, possibly associated with observed reduction of tariffs faced by agricultural products coming from the region.
- Additional observation:
  - Many developing countries (notably Latin America and Africa) also import less than expected, indicating they maintain important barriers to agricultural trade as well.

*Source: IMF working paper content provided in the supplied PDF chapter/section.*

### REFERENCES

### _wp0521 - REFERENCES

### References list

- Anderson, J. E., and E. van Wincoop, 2003, “Gravity with Gravitas: A Solution to the Border Puzzle,” American Economic Review, Vol. 93, No. 1, pp. 170–92.

- Anderson, K., 2003, “Trade Liberalization, Agriculture, and Poverty in Low-Income Countries,” WIDER Discussion Paper No. 2003/25 (United Nations, NY: World Institute for Development Economics Research).

- Chen, N., 2002, “Intra-National Versus International Trade in the European Union: Why Do National Borders Matter?”CEPR Discussion Paper No. 3407 (London: Centre for Economic Policy Research).

- Cline, W. R., 2004, Trade Policy and Global Poverty (Washington: Institute for International Economics).

- Croce, E., V. H. Juan-Ramon, and F. Zhu, 2004, “Performance of Western Hemisphere Trading Blocs: A Cost-Corrected Gravity Approach,” IMF Working Paper 04/109 (Washington: International Monetary Fund).

- Dimaranan, B., T. Hertel, and R. Keeney, 2003, “OECD Domestic Support and Developing Countries,” WIDER Discussion Paper No. 2003/32 (United Nations, NY: World Institute for Development Economics Research).

- Ingco, M. D., and J. D. Nash, eds., 2004, Agriculture and the WTO—Creating a Trading System For Development (Washington: World Bank).

- Francois, J., H. van Meijl, and F.van Tongeren, 2003 “Trade Liberalization and Developing Countries under the Doha Round,” CEPR Discussion Paper No. 4032 (London: Centre for Economic Policy Research).

- Frankel, J., 1997, Regional Trading Blocs in the World Economic System (Washington: Institute for International Economics).

- Haveman, J. D., and H. J. Shatz, 2003, “Developed Country Trade Barriers and The Least Developed Countries—The Economic Results of Freeing Trade,” WIDER Discussion Paper No. 2003/46 (United Nations, NY: World Institute for Development Economics Research).

- Katrak, H., and R. Strange, eds., 2004, The WTO and Developing Countries (New York: Palgrave MacMillan).

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*Content extracted from _wp0521 - REFERENCES.*

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