Impact of regional integration agreements in the Western Hemisphere on United States soybean exports

A spatial equilibrium model was constructed to analyze the impact of changes in trade barriers in regional integration agreements (RIAs) in the Western Hemisphere on U.S. soybean exports in world markets. Linear quantity demanded and supplied were endogenously determined by the model using 1992 data. One of the most recent RIAs in the Western Hemisphere (NAFTA) is expanded to include selected countries in this region. Other purposes of this study are to assess the effect of inclusion of Chile as a member of NAFTA and expanding of NAFTA in the Western Hemisphere.;Chile is a model for less-developed countries in the implementation of trade reforms that are the main reason for inclusion of Chile in NAFTA. Since trade is strengthened by eliminating import tariffs within NAFTA members and including Chile in the study of NAFTA, the conclusion was reached that expanding NAFTA in the Western Hemisphere will likely benefit other nations. In this study, the reductions of import tariffs by NAFTA's members and selected countries in the Western Hemisphere for soybeans from the U.S. and other exporting countries are evaluated using nine models. All models are successively compared to the Base Model to evaluate the impact of changes in import tariffs on soybeans by the RIAs in this region.;The soybean exporters accommodated the changes in soybean volumes and prices in importing countries and regions when NAFTA provisions were implemented; therefore, total export volumes increased. The results reveal that there are trade creations under the provisions of NAFTA since the volume of soybean imports increased for Chile, Colombia, Ecuador, Mexico, Peru, Uruguay, and Venezuela, but a trade diversion was only for Canada. There are limited effects on intra-trade between the U.S. and Canada because soybean import tariffs had been removed before both joined in NAFTA.;After provisions on soybean trade were implemented, the net social payoff (NSP) increased. The NSP increase was associated with the increase of consumer and exporter surplus. Consumer surplus is credited to the consumption of soybeans in importing countries and regions, and exporter surplus occurs because of shipment of soybeans from exporting countries to the international trade systems.