Australia’s Free Trade Agreements (FTAs) and Potentiality of Wheat Exports: A Panel Gravity Model Approach

Abstract

This paper estimates the trade creation and export diversion effects of different Australia’s free trade agreements (FTAs) using the panel data from 1996 to 2017. The heteroscedasticity robust Regression Error Specification Test confirms the relevance of Poisson Pseudo Maximum Likelihood estimator over Ordinary Least Square estimator. Results showed that the total trade creation effects of FTAs in wheat trade is higher than Intra block export diversion. The exhausted wheat exports potentiality from Australia to the countries like Indonesia, Iraq, Japan, Korea, and the Philippines has suggested seeking for additional potential markets based on demand in the future.

Keywords:

• Australia
• free trade agreements
• gravity model
• panel data
• wheat export

Notes

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data that support the findings of this study are available from the corresponding author upon reasonable request

Notes

1 TRQ Fill Rates: total imports divided by total TRQ volume.

2 One Kilotons (kt) = 1,000 metric tons (mt) and one megatons (Mt).

3 Calculated based on three years (2015–2016 to 2017–2018) average productivity.

Additional information

Funding

This study was made possible by the generous support of the Australian Government, Department of Education and Training under Endeavour Research Fellowship (Post-doctoral) [recipient ID number 6636-2018]. The contents are the responsibility of the authors and do not necessarily reflect the views of the Australian Government.