This thesis examines the effects on demand, supply, imports, and prices of partial easing of sanitary and phytosanitary (SPS) barriers to trade in the U.S. market in the case of Mexican avocados. The SPS Agreement plays a role in the avocado market studied here through its implications for negotiations between countries that have not utilized the formal channels of the WTO for resolving disputes. A quarantine in place from 1914 until very recently banned entry of Mexican avocados into the U.S. market on grounds of risk of pest infestation. Since the early 1970s this quarantine has been a cause of dispute between the Mexican and U.S. governments, resulting in elaborate evaluations of possible pest risks and risk mitigation procedures that might be carried out. However, after the initiation of negotiations for the North American Free Trade Agreement (NAFTA) in 1991, the import ban was partially eased in 1995 allowing Mexico access to the Northeastern part of the U.S. during four winter months. After three years of successfully exporting without any pest outbreaks, Mexico requested increased access to an additional part of the U.S. market, which it was granted in 2001. This study develops a partial equilibrium trade model to investigate the effects that this increased access will have on the avocados markets. Hypothesized further increases in access are described, and their potential effects are evaluated as well.

Master of Science