ANALYZING THE CATFISH AND TROUT COMPETITIVENESS TRENDS AND POTENTIAL TRADE WITHIN THE US AND GLOBAL AQUACULTURE INDUSTRY: A GRAVITY MODEL APPROACH

The United States is one of the major seafood product importers in the world. Despite the increases in global seafood and aquaculture consumption over the past decades, there is limited information on the trade dynamics of this sector. To address this gap, this study uses an augmented gravity model to evaluate the factors that have influenced catfish and trout imports into the United States. The analysis was conducted using the Poisson Pseudo Maximum Likelihood (PPML) estimator to address issues of heteroskedasticity, autocorrelation, and zero trade flows. The results highlight the importance of Gross Domestic Product (GDP) and exchange rates in explaining catfish trade, while distance and free trade agreements play a significant role in trout imports. The inclusion of country-pair and seasonal fixed effects demonstrates how unobserved factors tend to influence trade volumes, diminishing the importance of key variables in the gravity model, such as GDP. Particularly, increases in COVID-19 cases had no negative significant impact on catfish or trout imports, suggesting that the pandemic did not disrupt these specific supply chains. The findings suggest that the U.S. can reduce dependency on a few dominant suppliers, such as Vietnam and China for catfish, by diversifying import sources. Moreover, protective measures such as tariffs and antidumping duties should be approached cautiously, as they might not affect imports as intended. These results provide important insights for policymakers and industry stakeholders aiming to strengthen the resilience and production capacity of the U.S. aquaculture sector.