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Market Integration through Smuggling: China’s Sanction on Norwegian Salmon

Author

Listed:
  • Garcia, Roberto J.

    (School of Economics and Business, Norwegian University of Life Sciences)

  • Nguyen, Thi Ngan Giang

    (School of Economics and Business, Norwegian University of Life Sciences)

Abstract

Much has been written in the popular press and studied in the political-economics literature about the link between the awarding of the 2010 Noble Peace Prize to a Chinese dissident and China’s trade sanction affecting Norway’s whole, fresh/chilled salmon exports. Trade patterns show a break in Norway’s salmon exports to China and a declining share of the Chinese market. However, since 2011 a curious trade pattern developed as Vietnam suddenly increased its import of Norwegian salmon. This paper establishes a relationship between the salmon markets of Vietnam and China since 2011, specifically addressing whether Vietnam’s increased import of salmon is related to China’s limiting of market access to Norwegian salmon. The sanction period acts as a structural break that divides trade flows into two sub-periods, July 1997 to February 2011 and March 2011 to December 2018. Vietnam’s current monthly imports are negatively affected by lags in China’s monthly imports with the sanction but had no effect before the sanction. An increase (decrease) in China’s salmon imports from Norway “Granger causes” a decrease (increase) in Vietnam’s imports from Norway. This provides statistical evidence of China’s sanction on Norwegian salmon, but that the sanction integrated China and Vietnam’s salmon markets through smuggling.

Suggested Citation

  • Garcia, Roberto J. & Nguyen, Thi Ngan Giang, 2020. "Market Integration through Smuggling: China’s Sanction on Norwegian Salmon," Working Paper Series 6-2019, Norwegian University of Life Sciences, School of Economics and Business.
    • Handle: RePEc:hhs:nlsseb:2019_006
    as

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    References listed on IDEAS

    as
    1. Fuchs, Andreas & Klann, Nils-Hendrik, 2013. "Paying a visit: The Dalai Lama effect on international trade," Journal of International Economics, Elsevier, vol. 91(1), pages 164-177.
    2. Ivar Kolstad, 2016. "Too big to fault? Effects of the 2010 Nobel Peace Prize on Norwegian exports to China and foreign policy," CMI Working Papers 3, CMI (Chr. Michelsen Institute), Bergen, Norway.
    3. Andriamananjara, Soamiely & Arce, Hugh M. & Ferrantino, Michael J., 2004. "Transshipment in the United States," Working Papers 15871, United States International Trade Commission, Office of Economics.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Vietnam; China; Norway; salmon trade; sanction; Granger causality; smuggling;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid

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