Causes of world trade growth in agricultural and food products, 1951-2000: a demand function approach

Abstract

The objective of the present study is to analyse the causes of the growth of international agricultural and food trade in volume terms from 1951 to 2000. The results suggest that income growth has been the principal reason for this expansion, while exchange rate stability and the real price of agricultural products played only a minor role. Multilateral trade liberalisation and trade costs, given their long-term stability, are not elements which could have stimulated their growth. Finally, the intensive liberalisation of trade which took place in various economic regions, especially in Europe, became a key factor in promoting agricultural trade among the countries participating in regional trade agreements. The study results also indicate that the determinants of trade growth for these goods were different to those for other goods and other periods.