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Harmonization of Food Regulations and Trade in the Single Market : Evidence from Disaggregated Data

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  • Mark, VANCAUTEREN

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

  • Bruno, HENRY DE FRAHAN

    (UNIVERSITE CATHOLIQUE DE LOUVAIN,(UCL), Belgium)

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    Abstract

    This paper uses a structural gravity model based on Anderson and van Wincoop (2003) to quantify and test the hypothesis that EU harmonization of food regulations increases EU bilateral trade. Using a self-constructed database that identifies processed food products at a detailed level covered by harmonization, our results suggest that bilateral exports subject to harmonized food regulations are 253 % greater than bilateral exports not covered by harmonized food regulations for 1998. The paper also estimates a tariff equivalent of trade costs that arises from non-harmonized food regulations which ranges between 73 % and 97 %. Both of these effects vary across food sub-sectors.

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    File URL: http://sites.uclouvain.be/econ/DP/IRES/2004-21.pdf
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    Bibliographic Info

    Paper provided by Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) in its series Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) with number 2004021.

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    Date of creation: 01 Oct 2004
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    Handle: RePEc:ctl:louvir:2004021

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    Keywords: Food Regulation; Harmonization; European Integration; Gravity Model;

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    1. Alan Deardorff, 1998. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," NBER Chapters, in: The Regionalization of the World Economy, pages 7-32 National Bureau of Economic Research, Inc.
    2. James E. Anderson & Eric van Wincoop, 2004. "Trade Costs," NBER Working Papers 10480, National Bureau of Economic Research, Inc.
    3. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, American Economic Association, vol. 93(1), pages 170-192, March.
    4. van Berkum, Siemen & van Meijl, Hans, 2000. "The application of trade and growth theories to agriculture: a survey," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, Australian Agricultural and Resource Economics Society, vol. 44(4), December.
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    8. Paul Brenton & John Sheehy & Marc Vancauteren, 2001. "Technical Barriers to Trade in the European Union: Importance for Accession Countries," Journal of Common Market Studies, Wiley Blackwell, Wiley Blackwell, vol. 39(2), pages 265-284, 06.
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    11. John C. Beghin & Jean-Christophe Bureau, 2001. "Quantification of Sanitary, Phytosanitary, and Technical Barriers to Trade for Trade Policy Analysis," Food and Agricultural Policy Research Institute (FAPRI) Publications, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University 01-wp291, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
    12. Chen, Natalie, 2004. "Intra-national versus international trade in the European Union: why do national borders matter?," Journal of International Economics, Elsevier, Elsevier, vol. 63(1), pages 93-118, May.
    13. Swann, Peter & Temple, Paul & Shurmer, Mark, 1996. "Standards and Trade Performance: The UK Experience," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 106(438), pages 1297-1313, September.
    14. Andrew K. Rose & Eric van Wincoop, 2001. "National Money as a Barrier to International Trade: The Real Case for Currency Union," American Economic Review, American Economic Association, American Economic Association, vol. 91(2), pages 386-390, May.
    15. Jonathan Eaton & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, Econometric Society, vol. 70(5), pages 1741-1779, September.
    16. Trefler, Daniel, 1993. "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 101(1), pages 138-60, February.
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