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Measuring Costs And Benefits Of Non-Tariff Measures In Agri-Food Trade

Author

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  • Beghin, John C.
  • Disdier, Anne-Celia
  • Marette, Stephan
  • van Tongeren, Frank

Abstract

This paper provides a systematic welfare-based approach to analyze the impact of non-tariff measures (NTMs) on trade and welfare in presence of market imperfections. We focus on standard-like measures such as technical barriers and sanitary and phytosanitary regulations. The approach overcomes the shortcomings of the mainstream approach based on the analysis of forgone trade caused by trade costs. The latter ignores market imperfections: welfare increases when NTMs are removed and trade expands. We explain how to account for external effects and market failures in trade-focused welfare analysis, leading to a more balanced overall assessment of measures despite a potential reduction of trade flows. We show that the relationship between trade, welfare, and NTMs is complex. The optimum NTM is often not zero. An application to shrimp trade illustrates the feasibility of the proposed approach. The illustration shows that the reinforcement of a food safety standard can be socially preferable to the status-quo situation, both domestically and internationally

Suggested Citation

  • Beghin, John C. & Disdier, Anne-Celia & Marette, Stephan & van Tongeren, Frank, 2011. "Measuring Costs And Benefits Of Non-Tariff Measures In Agri-Food Trade," Staff General Research Papers Archive 32393, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:32393
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    References listed on IDEAS

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    1. Disdier, Anne-Celia & Fontagne, Lionel & Mimouni, Mondher, 2008. "AJAE Appendix: The Impact of Regulations on Agricultural Trade: Evidence from the SPS and TBT Agreements," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 90(2), pages 1-7.
    2. Anne-Célia Disdier & Frank van Tongeren, 2010. "Non-Tariff Measures in Agri-Food Trade: What Do the Data Tell Us? Evidence from a Cluster Analysis on OECD Imports," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(3), pages 436-455.
    3. Lionel Fontagné & Mondher Mimouni & Jean-Michel Pasteels, 2005. "Estimating the Impact of Environmental SPS and TBT on International Trade," Post-Print hal-00270511, HAL.
    4. Frank van Tongeren & John Beghin & Stéphane Marette, 2009. "A Cost-Benefit Framework for the Assessment of Non-Tariff Measures in Agro-Food Trade," OECD Food, Agriculture and Fisheries Papers 21, OECD Publishing.
    5. Bruno Henry de Frahan & Mark Vancauteren, 2006. "Harmonisation of food regulations and trade in the Single Market: evidence from disaggregated data," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 33(3), pages 337-360, September.
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    Cited by:

    1. Bo Xiong & John Beghin, 2017. "Disentangling Demand-Enhancing And Trade-Cost Effects Of Maximum Residue Regulations," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 6, pages 105-108, World Scientific Publishing Co. Pte. Ltd..
    2. Olivier Cadot & Julien Gourdon, 2012. "Assessing the price-raising effect of non-tariff measures in Africa," Working Papers 2012-16, CEPII research center.
    3. Olivier Cadot & Julien Gourdon, 2016. "Non-tariff measures, preferential trade agreements, and prices: new evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(2), pages 227-249, May.
    4. Olivier CADOT & Ernawati MUNADI & Lili Yan ING, 2013. "Streamlining NTMs in ASEAN: The Way Forward," Working Papers DP-2013-24, Economic Research Institute for ASEAN and East Asia (ERIA).
    5. Yuan Li & John C. Beghin, 2017. "Protectionism indices for non-tariff measures: An application to maximum residue levels," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 10, pages 167-178, World Scientific Publishing Co. Pte. Ltd..
    6. Olivier Cadot & Julien Gourdon, 2014. "Editor's choice Assessing the Price-Raising Effect of Non-Tariff Measures in Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 23(4), pages 425-463.
    7. Olivier Cadot & Ernawati Munadi & Lili Yan Ing, 2015. "Streamlining Non-Tariff Measures in ASEAN: The Way Forward," Asian Economic Papers, MIT Press, vol. 14(1), pages 35-70, Winter/Sp.
    8. Xiong, Bo & Beghin, John C., 2011. "Disentangling the Demand-enhancing Effect and Trade-cost Effect of Technical Measures in Agricultural Trade among OECD countries," 2011: Agricultural Price Volatility, Trade Policy and Food Security in Developing Countries, December 2011, St. Petersburg, Florida 116898, International Agricultural Trade Research Consortium.
    9. Salamat Ali, 2016. "Export Response to Sanitary and Phytosanitary Measures and Technical Barriers to Trade: Firm-level Evidence from a Developing Country," Discussion Papers 2016-02, University of Nottingham, CREDIT.
    10. Olivier Cadot & Julien Gourdon, 2016. "Non-tariff measures, preferential trade agreements, and prices: new evidence," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(2), pages 227-249, May.
    11. Marette Stéphan, 2016. "Non-Tariff Measures When Alternative Regulatory Tools Can Be Chosen," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 14(1), pages 1-17, May.
    12. Xiong, Bo, 2012. "Three essays on non-tariff measures and the gravity equation approach to trade," ISU General Staff Papers 201201010800003536, Iowa State University, Department of Economics.

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    More about this item

    Keywords

    externality; trade; Welfare; Non-tariff measures; NTM;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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