The Effects of China's Tariff Reductions on EU Agricultural Exports

China's accession to the WTO means significant increases in export opportunities for China's trading partners. This study attempts to identify and measure quantitatively the effects of changing economic environment and trade policies on China's agricultural imports from the European Union (EU). The approach is to estimate demand functions for China's agri-food imports from the EU using semi-annual data from 1980 to 2000. The demand functions are used to measure the impacts of relative-price and trade policy changes on EU agricultural exports to China. The results suggest that in China, there is a relatively strong demand response for agrifood imports to changes in income and prices. Furthermore, the results indicate that relative-price variations affect significantly the export market shares of the EU. Trade liberalisation in the form of tariff reductions is found to be relatively significant in changing the quantity of agri-food imports demand from China.