EC Enlargement and US Agricultural Exports

The impact of the EC enlargement on US agricultural exports to the EC is analyzed using a model differentiating products by origin. Simulation of the enlargement, based on average 1983.85 trade flows, indicates that the integration of Spanish and Portuguese agriculture into the EC variable import levy regime results, ceteris paribus, in an 8-percent drop in maize imports by the new EC members. Soyabean exports to the EC increase by 11 percent, benefiting from the combination of increased maiz.e tariffs and duty free entry of oilseeds into the EC. Changes in US maize and soyabean exports to the EC are comparable to total changes in trade flows. The above developments could generate further strains in US-EC agricultural trade relations by increasing the pressure within the EC to balance the CAP reform with the imposition of some form of protection against EC oilseed imports. Simulating the recent EC Conunission proposal for an oilseed tax indicates that its imposition would result in a moderate decrease of 3.8 percent in soyabean imports into the enlarged EC because of offsetting changes in maize and soyabean exports into the EC