Assessing the Impact of Recent Trade Policy Changes in the Banana Market under Alternative Market Structures

The paper focuses on the importance of the assumptions made about market structure and firmbehaviors in empirical trade policy analysis. It does it with reference to the most recent changes in theEU import regime for bananas, namely the Economic Partnership Agreements and the December2009 WTO agreement on bananas. The paper’s contribution to the literature on the issues addressedis threefold: it develops two original models which incorporate imperfectly competitive marketstructures in a spatial modeling framework; it provides an assessment of the degree of market powerin international banana trade and, finally, it assesses how the analysis of the implications of the mostrecent changes in the EU import regimes for bananas is affected by the assumptions made regardingthe prevailing market structure.