1. EU Market Access for Mediterranean fruit and vegetables:
Annual Meeting Eu-Med Agpol
17-20 May 2006-Montpellier
EU Market Access for Mediterranean fruit and vegetables:
A gravity model assessment
EMLINGER Charlotte
IAMM / UMR MOISA

2. Outline of the talk 1. My PhD Project in the EUMED Agpol Project
2. The Gravity model
4. First Results
5. Conclusion and discussion

3. My PhD Project in the EUMED Agpol Project 1.1. Problematic of my work
Context :
Better EU market access for Fruit and Vegetables (F&V) exports : main issue of the liberalisation process for the Mediterranean Countries
What would be the impact of a greater liberalization on EU import of F&V from the Mediterranean countries ?
Questions of the PhD Study:
 To what extent EU protections influence the F&V exports of Med countries ?
Do exist trade costs other than tariffs and transportation, accessing EU market for Mediterranean F&V? What are their impact?

4. My PhD Project in the EUMED Agpol Project 1.2. My approach
International economics approach
Use of a Gravity model :
Common tool in trade analysis, focusing on trade costs
Bilateral trade determinants analysis
Ex post model
World model
Econometric methodology

5. My PhD Project in the EUMED Agpol Project 1.3. Links with the project
Use of WP 3 output: MEDITAR and Deliverable 13 analysis
Complementary work with other approach in the project :
WP 5 : DELPHI Method (assess Export and production potential)
WP 6 : Ex Ante models (CAPRI, TASM, MCGE)
Contribution to WP 7 : interaction with World market
= we take into account all the EU suppliers of F&V in the model
Comparison of Med Countries/ Rest of the World

6. 2. The Gravity Model 2.1. Principle
Equation derived from Anderson van Wincoop 2004
An equation explaining bilateral trade between two countries by :
production of exporting country
consumption of importing country
relative prices of partners : competitiveness
trade costs : transportation cost (proxied by distance)
tariffs (ad valorem equivalent)
other border costs (caught by dummy variable)

7. 2. The Gravity Model 2.1. Principle
i Importing country
j exporting country
m imports
x production
w world
k product
Home effect : countries trade more with themselves than with others countries
Border effect methodology : comparison imports from foreign countries to imports from domestic (EU) producers : benchmark of the best market access possible

8. 2. The Gravity Model 2.2. Data (1)
Annual data model (2002)
Data base :
Production and price : FAOSTAT
Bilateral trade : COMTRADE
Applied Tariffs : MEDITAR
Distance, contiguity and historic variables : CEPII
Problem of harmonisation and consistency of data base :
Computation of balance sheet between supply and demand
Re-exportation issue

9. 2. The Gravity Model 2.2. Data (2)
Applied tarrifs : Ad Valorem Equivalent computation
For entry price products: use of 92% of the trigger price for import price
Applied tarrifs : Aggregation
Aggregation of monthly data calculated at the 10-digit level of the combined nomenclature in annual data defined in the FAO nomenclature

10. 3. First results (1) Coefficient Std err significance
j price competitiveness on i's market
-0,178
0,026
***
Distance
-0,998
0,074
Perishability 2 (Dummy)
-2,091
0,129
Perishability 3 (Dummy)
-3,27
0,126
Perishability 4 (Dummy)
-2,306
0,14
Exotic good (Dummy)
1,245
0,2
Colony (Dummy)
0,886
0,171
Common Border (Dummy)
0,41
0,168 **
Tariffs applied (reference)
-0,921
0,063
Tariffs Med Countries
0,119
0,092 NS
Tariffs New Member States
0,266
0,114
Tariffs Southern Hemisphere countries
1,123
0,107
European Union effect (reference) (Dummy)
1,108
0,205
Med Countries (Dummy)
0,685
0,219
New Member State (Dummy)
0,483
0,28 *
South Hemisphere Countries (Dummy)
1,567
0,264
Home effect (Dummy)
5,605
0,376
Constant
8,285
0,659

11. 3. First results (1)
Results for classical variables in line with expectation from gravity model
Competitiveness, Distance, colony, common border
Important Home effect and EU border effect
Role of Perishability in transport costs
Mediterranean area as a block :
Tariffs elasticity similar than the Rest of the World (ROW)
Trade Resistance lower than those of ROW : non price competitive advantage/ROW

12. Other trade resistance
3. First results (2)
Heterogeneity of the Mediterranean area, comparison of Med countries
-3,77
0,14
Tunisia
-8,50
0,01
Syria
-0,26
-0,38
Morocco
-0,42
Turkey
-1,32
-0,78
Jordan
2,44
Israel
-0,24
-1,22
Egypt
-2,88
Lebanon
-3,62
Algeria
Rest of World
Other trade resistance
Tariffs Elasticity

13. 5. Discussion 5.1. Impact of liberalization
Impact of liberalisation can be discussed, considering :
Tariffs elasticies
Other trade resistance or advantage
Tariffs applied
Impacts of perissability and distance

14. Low Tariff sensitivity High Tariff sensitivity
5. Discussion 5.1. Impacts of liberalization
Lebanon
Algeria
Jordan
Low Tariff sensitivity
<ROW
High Tariff sensitivity
≥ROW
Tunisia
Syria
Turkey
Morocco
Egypt
Israel
non price
competitive
advantage
compared
to ROW
Trade Resistance
Compared to EU suppliers
compared to EU
disadvantage
low EU tariffs
High EU tariffs
Middle EU tariffs

15. Haricots secs Fèves pois chiches ail lentilles pois secs
Pamplemousses Citrons Oranges Mandarines
Pommes Poires Coings
kiwis Bananes Avocats
Ananas Dates
Pommes de terre
Patates douces
Oignons Echalotes
Amandes Noisettes Pistache
Haricots verts Choux
Choux fleurs Petits pois
Mangues Papayes
Poivrons verts
Concombres Tomates
Artichauts Asperges
Figues Pêches Abricots
Groseilles Framboises Fraises Myrtilles
Pastèques Melons
Epinards Salades Champignons
Groupe 4
Groupe 2
Groupe 3
Groupe 1