A Simultaneous Econometric Model of World Fresh Vegetable Trade, 1962-82: An Application of Nonlinear Simultaneous Equations

World fresh vegetable trade increased more than fourfold between 1962 and 1982. The major trading areas include virtually the entire world- Latin America, the United States, Canada, the European Community, the Middle East, the Far East, Africa, and the non-EC Western European nations. An Armington-type model is constructed here to represent the forces driving world vegetable trade and their relative stregnths between regions. The parameter estimates are then used to simulate the effets of the US-Canadian Free Trade Agreement (FTA) on fresh vegetable trade between the countries. Results indicated that aggregate national vegetable demand in both countries will show larger increases with enactment of the trade agreement than without its enactment.