Analyzing the Agricultural Trade Impacts of the Canada-Chile Free Trade Agreement



Variable PCi is a partner country dummy variable that takes the value of one when
partner country is Chile to control for possible pre-FTA differences in trade patterns relative
to other countries, and FTA
it is an interaction of PCi and a time-specific dummy variable
for Canada-Chile FTA. Coefficient β
1 measures how much greater is Canadian imports from
(exports to) Chile relative to imports from (exports to) the average Canadian trading part-
ner. Coefficient β
2 is of key importance in the analysis: it measures the trade effect of the
Canada-Chile FTA on the (log) level of Canadian exports to and imports from Chile. A
Positive and significant β
2 would indicate a trade-creating effect of the FTA for Canadian
agricultural sector, while insignificant values would suggest that the FTA creates no com-
petitive advantage for Canadian agricultural exporters to Chile relative to other countries.

Specification (1) is estimated with OLS where observations are clustered by country-
industry to obtain a robust covariance matrix adjusting for within-cluster correlation. Esti-
mation results for equation (1) are presented in Table 3 for Canadian imports and in Table
5 for exports. We first focus on the results for Canadian imports. In the basic specification
without additional controls (column 1), the coefficient estimate for β
1 is positive, which im-
plies that Canada already exported 39 percent more to Chile than to the average country
during the period 1988-1997.11 Adding the FTAvariable to the basic specification suggests
that this effect nearly doubled as a result of the FTA: the coefficient β
2 = 0.30 implies that
exports of the average Chilean agricultural sector to Canada increased by 35 percent as a
result of the agreement.

Including other controls in specifications (3)-(6) we observe that most coefficients have

11 exp(0.33) - 1 ' 0.39

11



More intriguing information

1. The name is absent
2. APPLICATIONS OF DUALITY THEORY TO AGRICULTURE
3. MULTIMODAL SEMIOTICS OF SPIRITUAL EXPERIENCES: REPRESENTING BELIEFS, METAPHORS, AND ACTIONS
4. Natural hazard mitigation in Southern California
5. The name is absent
6. The name is absent
7. Family, social security and social insurance: General remarks and the present discussion in Germany as a case study
8. The name is absent
9. Foreign Direct Investment and Unequal Regional Economic Growth in China
10. Influence of Mucilage Viscosity On The Globule Structure And Stability Of Certain Starch Emulsions
11. The name is absent
12. Disturbing the fiscal theory of the price level: Can it fit the eu-15?
13. Implementation of the Ordinal Shapley Value for a three-agent economy
14. Short report "About a rare cause of primary hyperparathyroidism"
15. The name is absent
16. The name is absent
17. The name is absent
18. Insecure Property Rights and Growth: The Roles of Appropriation Costs, Wealth Effects, and Heterogeneity
19. Skill and work experience in the European knowledge economy
20. Reversal of Fortune: Macroeconomic Policy, International Finance, and Banking in Japan