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Non-tariff Trade Barriers and Consumers' Information: The Case of the EU-US Trade Dispute over Beef

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  • Bureau, Jean-Christophe
  • Marette, Stephan
  • Schiavina, Alessandra

Abstract

Building on the empirical case of the EU-US trade dispute on hormone-treated beef an analytical framework, where consumers are imperfectly informed about the quality of imports, is used to investigate the welfare effect of trade liberalisation in the case of a credence good. Opening the domestic market to foreign products that are perceived to be of lower quality than domestic products may lead to market inefficiencies (e.g., adverse selection) and multiple equilibria, even though these products are actually safe. This may offset some of the benefits of trade liberalisation. The welfare effects of ruling against national regulatory barriers are analytically ambiguous because of information problems. More globally, the settlement of international disputes on sanitary issues should include more cost-benefit analysis, rather than relying only on scientific considerations. Copyright 1998 by Oxford University Press.

Suggested Citation

  • Bureau, Jean-Christophe & Marette, Stephan & Schiavina, Alessandra, 1998. "Non-tariff Trade Barriers and Consumers' Information: The Case of the EU-US Trade Dispute over Beef," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 25(4), pages 437-462.
  • Handle: RePEc:oup:erevae:v:25:y:1998:i:4:p:437-62
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    References listed on IDEAS

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    1. Balistreri, Edward J. & Hillberry, Russell H. & Rutherford, Thomas F., 2011. "Structural estimation and solution of international trade models with heterogeneous firms," Journal of International Economics, Elsevier, pages 95-108.
    2. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, pages 1695-1725.
    3. Marie-Luise Rau & Frank van Tongeren, 2007. "Modeling differentiated quality standards in the agri-food sector: the case of meat trade in the enlarged EU," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2-3), pages 305-315, September.
    4. Bokusheva, Raushan & Buchenrieder, Gertrud, 2006. "Contributions to the 4th young scientists workshop on agricultural development in Central and Eastern Europe," IAMO Discussion Papers 98, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
    5. Chevassus-Lozza, Emmanuelle & Latouche, Karine & Majkovic, Darja, 2007. "How Much do Non-Tariff Measures Explain the Border Effect at Entry to the EU Market? The CEECs Agri-Food Exports to EU in the Pre-Accession Period," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 9852, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
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