This chapter reviews how the literature on trade in agricultural and food products has developed over the last 20 years. Its evolution has been heavily influenced by several developments in the international trade literature. The first relates to trade theories that connect closely with observables: new Ricardian models and firm-level analysis. The second relates to a shift toward applied work involving estimated gravity models and counterfactual simulations. Within a unifying framework, we provide a bird-eye overview of recent developments in trade literature that improves the predictive capability of empirical and theoretical studies for agricultural and food sectors. We highlight how land heterogeneity, technology, vertical relationships in the food chain, quality of food products, and taste affect agri-food trade and its welfare consequences. We also discuss the emergence of new policy issues such as climate change, quality standards, food security, market volatility, and nutrition transition, where although trade may not be at the center of the issues it mediates most of the effects. Last, this chapter identifies possible future developments to make agricultural trade a very active research field, with specific focus on the consumer preferences, hidden costs, production technologies, and market structures.
