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Trade Value and Price Effect of Non-Tariff Measures in Fruits Trade

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  • Peci, Jurgen
  • Sanjuán Lopez, Ana Isabel

Abstract

This paper uses two different approaches of the gravity model (trade value and price approach) in order to investigate the effects of non-tariff measures (NTMs) in international fruits trade. Through the trade value approach, we obtain information on the trade value impact of NTMs. Through the price approach, we derive directly the trade cost effect of these NTMs. There are two broad scenarios where NTMs either positively or negatively affect trade. The first one is seen when compliance with the NTMs provides security guarantees that encourage demand in importing markets to meet or exceed supplying costs, whereas the second scenario reflects the opposite, compliance costs are higher than demand for meeting the externality, thus decreasing supplies. We find positive advalorem equivalent (AVEs) ranging from 3% for technical measures to 7% for non-technical measures. We also find a negative AVE of -2% for category C (pre inspection measures) although this result is barely significant. The difference between estimated coefficients of both approaches allows developing qualitative information on the market creating effect of NTMs, evidencing that overall technical measures show a slight demand increasing effect in comparison to the stronger decreasing effect of non-technical measures.

Suggested Citation

  • Peci, Jurgen & Sanjuán Lopez, Ana Isabel, 2019. "Trade Value and Price Effect of Non-Tariff Measures in Fruits Trade," 2019: Trading for Good - Agricultural Trade in the Context of Climate Change Adaptation and Mitigation... Symposium, June 23-25, 2019, Seville, Spain 312576, International Agricultural Trade Research Consortium.
    • Handle: RePEc:ags:iat19e:312576
    DOI: 10.22004/ag.econ.312576
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    Keywords

    International Relations/Trade;

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