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Growing U.S. Trade Deficit in Consumer-Oriented Agricultural Products

Published online by Cambridge University Press:  26 January 2015

Renan Zhuang ,
Won W. Koo  and
Jeremy Mattson
Renan Zhuang
Affiliation:
USA Poultry and Egg Export Council, Stone Mountain, GA
Won W. Koo
Affiliation:
Center for Agricultural Policy and Trade Studies, Department of Agribusiness and Applied Economics, North Dakota State University, Fargo, ND
Jeremy Mattson
Affiliation:
Upper Plains Transportation Research Institute, North Dakota State University, Fargo, ND
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Abstract

We investigate the factors behind the growing U.S. trade deficit in consumer-oriented agricultural products by using reliable panel data and an empirical trade model derived from international trade theory. The results indicate that per capita income in the United States appears to be the most important determinant for the growing U.S. trade deficit of consumer-oriented agricultural products. An increase in per capita income and trade liberalization in foreign countries would improve the U.S. trade balance. U.S. foreign direct investment abroad in food manufactures and the North American Free Trade Agreement (NAFTA) are found to have negative effects on the U.S. trade balance.

Keywords

consumer-oriented productsexchange ratetrade balancetrade deficitF14Q17
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 40 , Issue 3 , December 2008 , pp. 953 - 965
Copyright
Copyright © Southern Agricultural Economics Association 2008

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