Impact of Trade Liberalization on Domestic Supply, Demand, and Export of Iranian Raisins
abolghasem bagheri
1
(
Department of Agriculture, Payame Noor University, Tehran
)
حمید محمدی
2
(
Department of Agricultural Economics, University of Zabol, Zabol, Iran
)
mohammad mehdipour
3
(
department of law.university of zabol.iran
)
Keywords: trade liberalization, supply, demand, exports, raisins,
Abstract :
Introduction and Objective: Trade liberalization is a fundamental component of globalization, meaning the removal of trade restrictions on the export of goods. Since raisins are an important agricultural product in Iran with high export potential, this study examines the effects of trade liberalization on the supply, domestic demand, and export equations for raisins.
Materials and Methods: To examine the short-term and long-term relationships between the variables of domestic supply and demand functions and raisin export supply, an autoregressive distributed lag model was used over the period from 1991 to 2023.
Findings: The study results show that trade liberalization, based on the international trade level index, has a positive and significant impact on the domestic supply of raisins in the short and long term, with coefficients of 1.31 (at the 1% level) and 3.37 (at the 5% level), respectively. Increasing the level of trade liberalization through export facilitation provides an incentive for producers to increase production and supply more products. In contrast, this policy leads to a significant decrease in domestic demand in the short and long term, with coefficients of -1.6 (at the 1% level) and -2.53 (at the 5% level), respectively. In the export supply model for raisins, the results also showed that the international trade level index had a positive and significant effect of 3.81 on the export supply of raisins at the 1% level. Generally speaking, trade liberalization and the removal of trade barriers, followed by increased access to global markets, have led to higher production and export of raisins. The results also showed that the coefficients of the estimated models had the necessary structural stability.
Discussion and Conclusion: Overall results showed that trade liberalization led to an increase in domestic and export supply of raisins. However, at the same time, this index has led to a decrease in domestic demand. In fact, the increase in raisin exports as a result of liberalization leads to a decrease in access and demand for this product in the domestic market. Therefore, policymakers should, alongside facilitating foreign trade, prevent potential negative impacts on the domestic market by planning to increase production, improve productivity, train beneficiaries, and enhance processing, transportation, and export infrastructure. These findings emphasize that trade liberalization, if accompanied by targeted production support, can be beneficial.
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