The effects of free trade on export and import of agricultural products in Iran

Abstract

The phenomenon of globalization is a process that has been discussed by policy makers and planners in recent decades. Globalization is the merging of national economies with the global economy, the effects of which can be seen in the growth of international trade, the globalization of production, and the flow of foreign direct investment. Today, the development of non-oil exports is a necessity, because it increases foreign exchange earnings, and as a result, makes it possible to implement economic development programs that involve foreign exchange costs. Theoretically, although free trade increases the growth of imports and exports, it depends on the relative effects of the growth of exports and imports, as well as on relative price changes. It is clear that globalization is causing rapid growth in world trade, hence reducing the cost of information and communication. Given the importance of the agricultural sector in developing countries and the need for Iran to join the World Trade Organization and free trade, the purpose of this study is to investigate the impact free trade on exports and imports of selected agricultural products in Iran. For this purpose, it is necessary to estimate import and export patterns. In this study, the export supply function and the import demand function of selected agricultural products were calculated, the variability of variables were investigated and the effects of clearance on them were investigated using the ARDL method and the Nerlaw model. Eviews software was used to analyse the data. The results showed that with trade clearance, export supply and import demand will increase. In other words, these two variables have a positive relationship with the commercialization process.

Keywords

• trade clearance
• export supply
• import demand
• agricultural products