Chinese and U.S. Apple Trade in ASEAN

We investigate oligopolistic competition between U.S. and Chinese apple exporters in the ASEAN market using strategic trade theory and the NEIO literature. We also analyze competition in the U.S. and Chinese domestic markets. U.S. supplies higher quality apples to ASEAN than China, resulting in product differentiation. The results show that U.S. exporters had a higher markup than Chinese exporters through the 1990s; however, as the share of Chinese apples expanded, the U.S. markup declined and the Chinese markup increased dramatically. Competitive pricing prevails both in the U.S. and Chinese domestic markets.