Effects of Trade Barriers on U.S. Apple Exports
Prasanna Sreedharan
Department of Agricultural and Resource Economics
Washington State University
Stephen Devadoss
Department of Agricultural Economics
University of Idaho
Leroy Stodick
Department of Agricultural Economics
University of Idaho
Thomas Wahl
Department of Agricultural and Resource Economics
Washington State University
This paper is prepared for presentation at the annual meeting of the American Agricultural Economics
Association, Montreal, Canada, July 27-30, 2003
Copyright. By [authors] Authors reserve all copyrights of this paper. No part or a section of this paper can
be reported without proper credit given to authors.
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Effects of Trade Barriers on U.S. Apple Exports
Prasanna Sreedharan
Stephen Devodoss
Leroy Stodick
Thomas Wahl
Abstract
We build a spatial equilibrium trade model for apples using demand and supply relations for each
importing and exporting country. The model maximizes welfare subject to demand and production
constraints. A trade barrier (free trade) scenario which incorporates (removes) import quotas and tariffs
is run. Comparison of the solutions of the two scenarios quantifies the impacts of trade barriers on US
apple exports.
Key Words: apples, spatial equilibrium model, trade barriers.
JEL Classification: F10
I. Introduction
The United States is a major apple producing country. Owing to an oversupply in
the domestic market, US apple growers have not been receiving remunerative prices.
Exporting apples to other countries can solve this resulting market saturation. However,
apple exports are far below the consumption potential in importing countries mainly due
to high trade barriers. Tariffs range from a low of 15% in Venezuela to as high as 54% in
Egypt and India. This implies that US apples cost about 1.5 times more in some countries
even without accounting for transportation costs. Thus, US apple prices compare
unfavorably wi