The Effectiveness of Industrial Countrys' Preferential Market Access Arrangements on Stimulating Caribbean Exports
Carew, Richard Aloysius
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https://hdl.handle.net/2142/69892
Description
Title
The Effectiveness of Industrial Countrys' Preferential Market Access Arrangements on Stimulating Caribbean Exports
Author(s)
Carew, Richard Aloysius
Issue Date
1988
Doctoral Committee Chair(s)
Schmidt, Stephen C.
Department of Study
Agricultural Economics
Discipline
Agricultural Economics
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Economics, Agricultural
Abstract
The study is confined to evaluating the effectiveness of trade preferences extended by major industrial countries. Two approaches are used to make this evaluation. The first approach is a gravity trade model that relies in both time series and cross-sectional data. The Gravity equation includes variables that comprises both demand and supply factors as well as dummy variables to reflect structural changes associated with preferences. The period of observation is from 1976-1986 and the estimates are based on aggregate trade and selected product groups. The second approach involved estimating U.S., European and Japanese import demand functions for individual commodities that are considered to be foreign exchange earners. The primary thrust of the model is to ascertain the trade effects of the major preference programs used in the gravity equation part of the trade flow analyses.
The results of the gravity equation suggested that Jamaican aggregate trade were influenced primarily by the EEC and the U.S. and Canadian GSP programs while Trinidad and Tobago aggregate trade were impacted upon solely by the EEC Lome. At a disaggregate level Jamaica's fruit and vegetable trade were determined by the U.S. CBI and EEC Lome trade preference programs. Jamaican coffee, cocoa, tea and spice exports were positively and significantly associated with the EEC Lome program while Trinidad and Tobago's export trade derived preferential benefits from both the EEC and the U.S. GSP programs. Distilled alcohol and textile and clothing were manufactured products to derive trade benefits from preferential policies. For the former most of the gross trade benefits were obtained from the EEC while for the latter they were reaped solely from the EEC Lome.
Industrial countries' import demand estimates revealed that Canadian and Germany consumers showed a greater preference for Jamaican cocoa. Conversely, the preferential market access arrangements of the U.S. and UK played no significant role on the volume of the survey countries' cocoa exports. The UK's was the only industrial country whose preferential policy did have a substantive effect on Trinidad and Tobago's coffee exports. Jamaica sugar exports were positively associated with the EEC preferential policy while Trinidad and Tobago they benefited from the U.S. GSP and the EEC Lome. Preferential market access arrangements had a weak but positive effect on Jamaican banana exports though the results of the Chow test confirmed that structural change had occurred for the years of 1975-1979.
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