The effect of preferential trade agreements on monthly fruit exports to the European Union

This study assesses the effect of preferential trade agreements on monthly exports of fresh grapes, pears, apples, oranges and mandarins to the European Union (EU) during 2001–2004, using a gravity model. Preference margins are calculated to include quotas and the entry price system, and the model recognises that countries may have a choice among preferential schemes. The econometric methodology controls for heterogeneity, endogeneity and zero-trade flows. The effect of EU preferential policies is found to vary by commodity. The Generalised System of Preferences (GSP) seems to increase exports to the EU of fresh grapes only, while exports to the EU of oranges are favoured by the Cotonou Agreement. Regional trade agreements appear effective in expanding EU-bound exports from eligible countries for all fruits except oranges.