Market and Welfare Impacts of COOL on the U.S.-Mexican Tomato Trade

Wendy A. Johnecheck · Parke Wilde · Julie A. Caswell

13 citations0/0 files storedRePEc: Research Papers in Economics

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Global trade and economics Agricultural economics and policies Economics of Agriculture and Food Markets

Abstract

A two-country, comparative static partial equilibrium model is used to simulate the ex ante market and welfare outcomes of U.S. country-of-origin labeling for the U.S.-Mexico fresh tomato trade. In all scenarios where consumers show a relative preference for U.S. tomatoes, Mexican tomato exports decline and U.S. production increases. Mexican trade losses using low- to mid-range consumer preference assumptions are 14% to 32% of the value of Mexican tomato exports to the United States and 1% to 3% of the total value of agricultural produce exports, partially negating the market access gains of NAFTA. Consumer effects are small and sometimes negative. Producer impact is the big effect, with transfer from Mexican to U.S. tomato producers.

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1978Monopoly and product quality 1999A review and meta-analysis of country-of-origin research 1970Foreign Trade Statistics 2004Food Regulation and Trade: Toward a Safe and Open Global System 1998Non-tariff trade barriers and consumers' information: The case of the EU-US trade dispute over beef 2004Labeling Policies in Food Markets: Private Incentives, Public Intervention, and Welfare Effects 2004Effects of Country-of-Origin Labeling on Meat Producers and Consumers 2004Distributional Impacts of Country-of-Origin Labeling in the U.S. Meat Industry

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