New Medit, vol 15, n.2, (June 2016), pp. 14-21
Jel classification: C51, F14, Q17
This paper analyzes the effect of monthly trade preferences granted to Morocco by the EU in fruit and vegetables. We apply a gravity framework that takes into account the potential endogeneity of preferences in the estimation, as factors like the historical relationships can be behind both trade preferences and trade flows. Overall, our results show that preferences determine positively the trade flows from Morocco to the EU, being the preferential entry price more effective than the ad valorem reduction in tariffs. Interestingly, our results find sectoral differences, as the reduced entry price is still export-restrictive for vegetables. Finally, we find that the fostering effect of trade preferences differs by EU destination country. Hence, our results have policy implications both in future revisions of the Euro-Mediterranean Agreements and in the deepening of the trade liberalization policy undertaken by Morocco.
EU trade preferences, fruit and vegetables, gravity model, Morocco