An assessment of the agricultural trade impact of Spain's integration intothe EU

The aim of this paper is to provide an econometric framework from which to assess the impact on Spanish agricultural trade by the entry of Spain into the European Union. This framework is based on the estimation of a gravity equation. Special attention is paid to the inclusion of dynamics in the gra vity equation. To do that, the Kalman filter is used to define the antimond e, that is, the hypothetical situation that would exist without the integra tion of Spain into the EU. Results show that although Spain joined the EU i n 1986, there existed a transition period that fasted until 1990. This resu lt is consistent with the homogenization of agricultural intervention price s during the same period. Empirical results indicate that internal trade cr eation and external trade diversion are the predominant effects of integrat ion on both imports and exports.