Is Mercosur promoting trade? Insights from Argentinean wine exports
As a consequence of the rapid and significative decrease in domestic demand, to avoid structural surplus traditional wine producing countries have been forced to export a growing share of their wine production. This article empirically investigates Argentinean trade policy on the wine sector over the last years, in order to understand its effect on export flows. An expanded gravity model was estimated through a Poisson pseudo-maximum likelihood estimator, in order to account for heteroskedasticity. The data used refer to Argentinean exports of bottled wine to all main world importers during the period 1997-2010, and account for more than 90% of total trade flows. Our results show that Mercosur membership has promoted Argentinean wine exports to other Latin American countries, but may as a whole have been counter-productive. A more open trade policy could increase Argentinean bottled wine exports by more than 5.8%. In addition, given the rise in wine importation and consumption in countries with high tariff barriers, such as China, the small number of free trade agreements could penalize Argentinean exports even more in the future.
Agostino M, Trivieri F, 2014. Geographical indication and wine exports. An empirical investigation considering the major European producers. Food Policy 46: 22-36. https://doi.org/10.1016/j.foodpol.2014.02.002
Aizenman J, Brooks E, 2008. Globalization and taste convergence: the cases of wine and beer. Rev Int Econ 16 (2): 217-233. https://doi.org/10.1111/j.1467-9396.2007.00659.x
Anderson JE, 1979. A theoretical foundation for the gravity equation. Am Econ Rev 69 (1): 106-116.
Anderson JE, Neary JP, 2003. The mercantilist index of trade policy. Int Econ Rev 44 (2): 627-649. https://doi.org/10.1111/1468-2354.t01-1-00083
Anderson JE, van Wincoop E, 2003. Gravity with gravitas: A solution to the border puzzle. Am Econ Rev 93 (1): 170-192. https://doi.org/10.1257/000282803321455214
Anderson K, 2004. The world's wine markets: Globalization at work. Edward Elgar Publishing. https://doi.org/10.4337/9781845420765
Anderson K, Nelgen S, 2011. Global wine markets, 1961 to 2009: a statistical compendium. University of Adelaide Press.
Baier SL, Bergstrand JH, 2001. The growth of world trade: tariffs, transport costs, and income similarity. J Int Econ 53 (1): 1-27. https://doi.org/10.1016/S0022-1996(00)00060-X
Baier SL, Bergstrand JH, 2009. Estimating the effects of free trade agreements on international trade flows using matching econometrics. J Int Econ 77 (1): 63-76. https://doi.org/10.1016/j.jinteco.2008.09.006
Borensztein E, De Gregorio J, Lee JW, 1998. How does foreign direct investment affect economic growth. J Int Econ 45(1): 115-135. https://doi.org/10.1016/S0022-1996(97)00033-0
Bouët A, Decreux Y, Fontagné L, Jean S, Laborde D, 2008. Assessing applied protection across the world. Rev Int Econ 16 (5): 850-863. https://doi.org/10.1111/j.1467-9396.2008.00753.x
Cameron AC, Trivedi PK, 2013. Count panel data. Oxford Handbook of Panel Data Econometrics.
Cembalo L, Caracciolo F, Pomarici E, 2014. Drinking cheaply: the demand for basic wine in Italy. Aust J Agr Resour Econ 58 (3): 374-391. https://doi.org/10.1111/1467-8489.12059
Cho G, Sheldon IM, McCorriston S, 2002. Exchange rate uncertainty and agricultural trade. Am J Agr Econ 84 (4): 931-942. https://doi.org/10.1111/1467-8276.00044
Cipollina M, Salvatici L, 2008. Measuring protection: mission impossible? J Econ Surv 22 (3): 577-616. https://doi.org/10.1111/j.1467-6419.2007.00543.x
Dal Bianco A, Boatto V, Caracciolo F, 2013. Cultural convergences in world wine consumption. Rev Fac Cienc Agrar 45 (2): 219-231.
Dal Bianco A, Boatto VL, Caracciolo F, Santeramo FG, 2016. Tariffs and non-tariff frictions in the world wine trade. Eur Rev Agr Econ 43 (1): 31-57. https://doi.org/10.1093/erae/jbv008
Dascal D, Mattas K, Tzouvelekas V, 2002. An analysis of EU wine trade: a gravity model approach. Int Adv Econ Res 8 (2): 135-147. https://doi.org/10.1007/BF02295344
Disdier AC, Head K, 2008. The puzzling persistence of the distance effect on bilateral trade. Rev Econ Stat 90 (1): 37-48. https://doi.org/10.1162/rest.90.1.37
Disdier AC, Fontagné L, Mimouni M, 2008. The impact of regulations on agricultural trade: Evidence from the SPS and TBT Agreements. Am J Agr Econ 90(2): 336-350. https://doi.org/10.1111/j.1467-8276.2007.01127.x
Feenstra RC 2004. Advanced international trade: theory and evidence. Princetown University Press.
Gennari A, Estrella Orrego J, Santoni L, 2013. Wine market regulation in Argentina: past and future impacts. AAWE Working Paper No. 136.
Helpman E, Melitz M, Rubinstein Y, 2008. Estimating trade flows: Trading partners and trading volumes. The Quart J of Econ 123 (2): 441-487. https://doi.org/10.1162/qjec.2008.123.2.441
Herﬁndahl OC, 1950. Concentration in the US steel industry. Unpublished PhD. Dissertation, Columbia University.
Hirschman AO, 1945. National power and the structure of foreign trade. University of California Press, 170 pp.
Jayasinghe S, Beghin JC, Moschini G, 2010. Determinants of world demand for US corn seeds: the role of trade costs. Am J Agr Econ 92(4): 999-1010. https://doi.org/10.1093/ajae/aaq056
Krugman P, 1980. Scale economies, product differentiation, and the pattern of trade. Am Econ Rev 70 (5): 950-959.
Lai H, Chun Zhu S, 2004. The determinants of bilateral trade. Can J Econ 37 (2): 459-483. https://doi.org/10.1111/j.0008-4085.2004.00011.x
Leamer EE, 1974. Nominal tariff averages with estimated weights. South Econ J: 34-46. https://doi.org/10.2307/1056094
Maskus KE, Wilson JS, Otsuki T, 2000. Quantifying the impact of technical barriers to trade: a framework for analysis. World Bank Policy Research Working Paper 2512.
Mayer T, Zignago S, 2011. Notes on CEPII's distances measures: The GeoDist database.
McCallum J, 1995. National borders matter: Canada-US regional trade patterns. Am Econ Rev 85 (3): 615-623.
Olper A, Raimondi V, 2008. Explaining national border effects in the QUAD food trade. J Agr Econ 59 (3): 436-462. https://doi.org/10.1111/j.1477-9552.2008.00155.x
Philippidis G, Resano‐Ezcaray H, Sanjuán‐López AI, 2013. Capturing zero‐trade values in gravity equations of trade: an analysis of protectionism in agro‐food sectors. Agr Econ 44 (2): 141-159. https://doi.org/10.1111/agec.12000
Pinilla V, Serrano R, 2008. The agricultural and food trade in the first globalization: Spanish table wine exports 1871 to 1935-A case study. J Wine Econ 3 (2): 132-148. https://doi.org/10.1017/S1931436100001176
Raimondi V, Olper A, 2011. Trade elasticity, gravity and trade liberalisation: evidence from the food industry. J Agr Econ 62 (3): 525-550. https://doi.org/10.1111/j.1477-9552.2011.00303.x
Sanjuán López AI, Resano Ezcaray H, 2015. Gravity estimations to correct the 'small shares stay small' bias in economic models. Inst for Prosp and Technol Stud, Joint Research Centre. Publications Office of the EU. ISBN 978-92-79-48391-2.
Seccia A, Carlucci D, Santeramo FG, 2009. Exports of Italian high quality wine: New empirical evidences from a gravity-type model. In: International marketing and trade of quality food products; Canavari M et al. (eds.), pp: 15-29. Wageningen Acad Publ, The Netherlands.
Silva JMCS, Tenreyro S, 2006. The log of gravity. Rev Econ Stat 88 (4): 641-658. https://doi.org/10.1162/rest.88.4.641
Tinbergen J, 1962. Shaping the world economy; suggestions for an international economic policy. The Twentieth Century Fund, NY.
Winchester N, Rau ML, Goetz C, Larue B, Otsuki T, Shutes K, Wieck C, Burnquist HL, Pinto de Souza MJ, Nunes de Faria R, 2012. The impact of regulatory heterogeneity on agri‐food trade. The World Econ 35 (8): 973-993. https://doi.org/10.1111/j.1467-9701.2012.01457.x
Xiong B, Beghin JC, 2012. Does European aflatoxin regulation hurt groundnut exporters from Africa? Eur Rev Agr Econ 39 (4): 589-609. https://doi.org/10.1093/erae/jbr062
© CSIC. Manuscripts published are the property of Consejo Superior de Investigaciones Científicas, and quoting this source is a requirement for any partial or full reproduction.
SJAR is an Open Access Journal. All articles are distributed under the terms of the Creative Commons Attribution 4.0 International (CC BY 4.0) License. You may read here the basic information and the legal text of the license. The indication of the license CC-by must be expressly stated in this way when necessary.