Effects of Trade Liberalization on the Trade Balance in Agriculture of Iran Print

The effects of trade liberalization on the agricultural sector's trade balance of Iran using ARDL model has been surveyed in this study during the period 1982-2012. Based on the results, variables of value-added agriculture, import price index, and currency have a significant and positive relationship with the agricultural sector's trade balance in short and long-term. Variables of earnings of oil sector and export price index are significant in the short term, but in the long run its coefficient is not significant. Also, agricultural trade liberalization index has a negative and significant effect on agricultural sector's trade balance of Iran in short and long run. Coefficient of the error correction model show that 60% of the imbalance disappear in each period. According to the results, trade liberalization led to worsening the agricultural sector's trade balance. So, it is essential that trade liberalization policy is implementing cautiously and policies with respect to global conditions and advantages of the agriculture sector is making and the maximum capacity of the agricultural sector was used in order to optimize the use of production resources.