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Stringent Maximum Residue Limits, Protectionism, and Competitiveness: The Cases of the US and Canada

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  • Xiong, Bo
  • Beghin, John C.

Abstract

Maximum Residue Limits (MRLs) on pesticides and veterinary drugs in plant and animal products are established to promote food safety and animal and plant health. In practice, however, they are often accused of creating unnecessary trade barriers. The controversy is more prominent when a given MRL is stricter than the corresponding international standard developed by Codex. Using the score indices constructed by Li and Beghin (2012), we empirically assess the implications of stringency in MRLs in plant and animal products, relative to Codex levels, for Canadian and U.S. trade performance. We find little evidence that U.S. imports are influenced by domestic stringency or those imposed by its trading partners. However, U.S. exports are negatively affected by stringency in destination markets. Canada’s stringent MRLs facilitate its exports of plant and animal products and these exports do not seem to be impeded by MRL stringency in destination markets. Canada’s imports do not appear to be systematically influenced by either its own or its trading partners’ MRL stringency. We draw implications for the potential harmonization of MRLs between the two countries.

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Bibliographic Info

Paper provided by International Agricultural Trade Research Consortium in its series Working Papers with number 142384.

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Date of creation: Nov 2012
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Handle: RePEc:ags:iatrwp:142384

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Keywords: Maximum Residue Limit; MRL; standard; protectionism; non-tariff measures; non-tariff barriers; competitiveness; gravity; US; Canada; Agricultural and Food Policy; International Relations/Trade; Q17; Q18; F13;

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  1. Marette, Stephan & Beghin, John C., 2010. "Are Standards Always Protectionist?," Staff General Research Papers 12826, Iowa State University, Department of Economics.
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  17. Bo Xiong & John Beghin, 2014. "Disentangling Demand-Enhancing And Trade-Cost Effects Of Maximum Residue Regulations," Economic Inquiry, Western Economic Association International, vol. 52(3), pages 1190-1203, 07.
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Cited by:
  1. Ferro, Esteban & Wilson, John S. & Otsuki, Tsunehiro, 2013. "The effect of product standards on agricultural exports from developing countries," Policy Research Working Paper Series 6518, The World Bank.

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