Impacts of Free Trade Agreement on US State Vegetable and Fruit Trade Flows

Impacts of Free Trade Agreement on US State Vegetable and Fruit Trade Flows

A few studies have shown that free trade agreements have affected the pattern of state exports. This paper examines the effects of free trade agreements on US state vegetable and fruit trade flows. We propose a single commodity gravity equation to overcome a common shortcoming of most gravity models, which are applied to aggregate trade flows. Our results show significant gross trade creation effects of NAFTA and APEC that are greater than the EU gross trade creation effects. In addition, our findings reveal that the Asian Pacific Rim region is a significant destination of many vegetables and fruits from US states.