Caribbean Bananas : The Macroeconomic Impact of Trade Preference Erosion

Author/Editor:

Paul Cashin ; Montfort Mlachila ; Cleary Haines

Publication Date:

March 1, 2010

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper examines the macroeconomic effects of the erosion of trade preferences, with a focus on the export of Caribbean bananas to Europe. Estimates are made of the magnitude of implicit assistance provided over a period of three decades to eastern Caribbean countries through banana trade preferences. The value of such assistance rose until the early 1990s, and has declined precipitously since then. Using vector autoregressive analysis, the paper finds that changes in the level of implicit assistance have had a considerable macroeconomic impact, especially on Caribbean real GDP growth.

Series:

Working Paper No. 10/59

Subject:

Agricultural exports Agricultural production Agricultural trade Bananas Caribbean Economic models Export prices Foreign aid Terms of trade Trade liberalization Trade policy Trade preferences

English

Publication Date:

March 1, 2010

ISBN/ISSN:

9781451963793/1018-5941

Stock No:

WPIEA2010059

Format:

Paper

Pages:

42

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