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The Political Economy of Standards: Does MRLs Matter in Cottonseed and its Trade?

Author

Listed:
  • Fazal Hadi

    (PhD Scholar,Department of Economics, Abdul Wali Khan University, Mardan, KP, Pakistan.)

  • Zahoor Ul Haq

    (Professor and Dean, Faculty of Business and Economics,Abdul Wali Khan University Mardan, KP, Pakistan.)

  • Javid Iqbal

    (Assistant Professor, Department of Economics, Abdul Wali Khan University Mardan, KP, Pakistan.)

Abstract

In this paper, we introduce three indices of trade which are consequently applied to the case maximum residue level, MRLs of pesticide. The aggregation indices of NTM i.e Li and Beghin index of trade, Heterogeneous index of trade (HIT) and actual heterogeneous index of trade (AHIT) regulations to compute their protectionism relative to international standards. The application of indices to Maximum Residue Limit (MRL) affecting cottonseed and its by-product i.e crude cottonseed oil and refined cottonseed oil, using a science-based standards Codex Alimentarius. In this analysis, the main aim of the article is to show the response of the maximum residue limits (MRLs) adopted by 50 importing countries on exports of the cottonseed commodities for the year 2005 to 2014. In this study, we estimate the augmented gravity model using the ordinary least squares (OLS) and Poisson regression estimators. The results show that maximum residue limits (MRLs) have a trade increasing effect on exports of the cottonseed commodities.

Suggested Citation

  • Fazal Hadi & Zahoor Ul Haq & Javid Iqbal, 2017. "The Political Economy of Standards: Does MRLs Matter in Cottonseed and its Trade?," Global Regional Review, Humanity Only, vol. 2(1), pages 177-196, June.
    • Handle: RePEc:aaw:grrjrn:v:2:y:2017:i:1:p:177-196
    DOI: 10.31703/grr.2017(II-I).13
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    References listed on IDEAS

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    1. Zahoor Ul Haq & Karl Meilke & John Cranfield, 2013. "Selection bias in a gravity model of agrifood trade," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 40(2), pages 331-360, March.
    2. Bergstrand, Jeffrey H, 1990. "The Heckscher-Ohlin-Samuelson Model, the Linder Hypothesis and the Determinants of Bilateral Intra-industry Trade," Economic Journal, Royal Economic Society, vol. 100(403), pages 1216-1229, December.
    3. Achterbosch, Thom J. & Engler, Alejandra & Rau, Marie-Luise & Toledo, Roger, 2009. "Measure the measure: the impact of differences in pesticide MRLs on Chilean fruit exports to the EU," 2009 Conference, August 16-22, 2009, Beijing, China 51765, International Association of Agricultural Economists.
    4. Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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