Imperfect Competition, Trade Policies, and Technological Changes in the Orange Juice Market
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Orange juice processors in Florida face stiff competition from São Paulo processors. The United
States imposes a specific import tariff to protect domestic processors. São Paulo processors also
export to the European Union, which imposes an ad valorem tariff on orange juice. Under
oligopolistic competition with endogenous firm entry and exit, this paper analyzes how the
changes in tariff policy and productivity impact the market structure in Florida and São Paulo;
prices; quantities; and welfare in the United States, Brazil, and the European Union. Free trade and
an increase in São Paulo productivity benefit U.S. and EU consumers and São Paulo processors.
In contrast, U.S. tariff reduction adversely impacts Florida processors.