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Disentangling Demand-Enhancing And Trade-Cost Effects Of Maximum Residue Regulations

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Author Info

  • Xiong, Bo
  • Beghin, John C.

Abstract

Abstract: Maximum residue levels (MRLs) regulations in plant products can createunnecessary trade barriers on one hand and enhance demand via risk mitigation or qualityassurance on the other. We stipulate a generalized gravity equation model to disentanglethe effects of MRLs on the import demand and foreign exporters’ supply. Applying theframework to the MRLs on pesticides imposed by high-income OECD countries, we findthat the MRLs jointly enhance the import demand and hinder foreign exporters’ supply.In addition, exporters from the less and least developed countries are more constrained bythe MRLs than their competitors from the developed world.

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Bibliographic Info

Paper provided by Iowa State University, Department of Economics in its series Staff General Research Papers with number 34393.

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Date of creation: 01 Nov 2013
Date of revision:
Publication status: Published in Economic Inquiry 2014, vol. 52 no. 3, pp. 1190-1203
Handle: RePEc:isu:genres:34393

Contact details of provider:
Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Phone: +1 515.294.6741
Fax: +1 515.294.0221
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Web page: http://www.econ.iastate.edu
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Related research

Keywords: MRL; sanitary and phytosanitary; SPS; standards; TBT; protectionism; maximum residue level; technical barriers; gravity model;

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References

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Cited by:
  1. Xiong, Bo & Beghin, John C., 2012. "Stringent Maximum Residue Limits, Protectionism, and Competitiveness: The Cases of the US and Canada," Staff General Research Papers 35584, Iowa State University, Department of Economics.
  2. Otsuki, Tsunehiro & Michida, Etsuyo & Nabeshima, Kaoru & Ueki, Yasushi, 2014. "Estimating the effect of chemical safety standards on firm performance in Malaysia and Vietnam," IDE Discussion Papers 455, Institute of Developing Economies, Japan External Trade Organization(JETRO).

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