North American tomato market: a spatial equilibrium perspective

Abstract

This paper studies the North American tomato market in a world market perspective. For this purpose a spatial equilibrium model with endogenous prices is constructed and solved by quadratic mathematical programming method. Six scenarios involving the impacts from transportation costs, tariffs, and North American Free Trade Agreement (NAFTA) were modelled. The solutions illustrate their impacts on production, consumption, trade flows, prices, and net social welfare. Due to NAFTA, Mexico became the main tomato exporter to the USA.