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Disentangling Demand-Enhancing and Trade-Cost Effects of Maximum Residue Regulations

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  • 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.

Suggested Citation

  • Xiong, Bo & Beghin, John C., 2013. "Disentangling Demand-Enhancing and Trade-Cost Effects of Maximum Residue Regulations," Staff General Research Papers Archive 34393, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:34393
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    1. repec:bla:worlde:v:40:y:2017:i:10:p:2277-2300 is not listed on IDEAS
    2. Kareem, Olayinka Idowu, 2016. "Food safety regulations and fish trade: Evidence from European Union-Africa trade relations," Journal of Commodity Markets, Elsevier, vol. 2(1), pages 18-25.
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    4. Meloni, Giulia & Swinnen, Johan, 2017. "Standards, Tariffs And Trade: The Rise And Fall Of The Raisin Trade Between Greece And France In The Late 19th Century And The Definition Of Wine," Working Papers 253853, American Association of Wine Economists.
    5. John C. Beghin & Bo Xiong, 2016. "Economic Effects of Standard-Like Nontariff Measures: Analytical and Methodological Dimensions," Food and Agricultural Policy Research Institute (FAPRI) Publications 16-wp569, Food and Agricultural Policy Research Institute (FAPRI) at Iowa State University.
    6. Qizhong YANG & Keiichiro HONDA & Tsunehiro OTSUKI, 2018. "Structure Demand Estimation of the Response to Food Safety Regulations in the Japanese Poultry Market," OSIPP Discussion Paper 18E003, Osaka School of International Public Policy, Osaka University.
    7. John C. Beghin & Miet Maertens & Johan Swinnen, 2017. "Nontariff Measures and Standards in Trade and Global Value Chains," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 2, pages 13-38 World Scientific Publishing Co. Pte. Ltd..
    8. Lota Dabio Tamini & Dupuis Raymond & Maurice Doyon, 2014. "Commerce international des produits alimentaires - Capacité d'application de la réciprocité des normes (innocuité, environnement et social) et leviers à la disposition des gouvernements," CIRANO Project Reports 2014rp-11, CIRANO.
    9. Arita, Shawn & Mitchell, Lorraine & Beckman, Jayson, 2015. "Estimating the Effects of Selected Sanitary and Phytosanitary Measures and Technical Barriers to Trade on U.S.-EU Agricultural Trade," Economic Research Report 212887, United States Department of Agriculture, Economic Research Service.
    10. Tao, Hongjun & Luckstead, Jeff & Zhao, Liang & Xie, Chaoping, 2016. "Estimating Restrictiveness of SPS Measures for China's Dairy Imports," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 19(B).
    11. Kareem, Fatima Olanike & Martinez-Zarzoso, Inmaculada & Brümmer, Bernhard, 2016. "Protecting Health or Protecting Imports? Evidence from EU Non-Tariff Barriers," Discussion Papers 241267, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    12. 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).
    13. Kareem, Fatima Olanike, 2017. "European Union’s SPS and TBT Measures, Gender Specific Obstacles and Agricultural Employment," EconStor Preprints 171726, ZBW - German National Library of Economics.
    14. Kareem, Fatima Olanike & Brümmer, Bernhard & Martinez-Zarzoso, Inmaculada, 2015. "The Implication of European Union’s Food Regulations on Developing Countries: Food Safety Standards, Entry Price System and Africa’s Export," Discussion Papers 198719, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    15. repec:eee:reveco:v:53:y:2018:i:c:p:185-202 is not listed on IDEAS
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    17. Wilson, Norbert L. W., 2017. "Labels, Food Safety, and International Trade," ADBI Working Papers 657, Asian Development Bank Institute.
    18. Lili Yan ING & Olivier CADOT, 2017. "Remaking Ad valorem equivalents of non-tariff measures in ASEAN," Working Papers DP-2017-09, Economic Research Institute for ASEAN and East Asia (ERIA).
    19. Bo Xiong & John C. Beghin, 2017. "Stringent Maximum Residue Limits, Protectionism, and Competitiveness: The Cases of the US and Canada," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 12, pages 193-207 World Scientific Publishing Co. Pte. Ltd..
    20. Olivier CADOT & Lili Yan ING, 2017. "Ad-valorem equivalents of NTMs in ASEAN," Working Papers P203, FERDI.
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    22. Otsuki, Tsunehiro & Honda, Keiichiro & Michida, Etsuyo & Nabeshima, Kaoru & Ueki, Yasushi, 2015. "Effects of RoHs and REACH regulations on firm-level production and export, and the role of global value chains : the cases of Malaysia and Vietnam," IDE Discussion Papers 526, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    23. Ronen, Eyal, 2017. "The Trade-Enhancing Effects of Non-Tariff Measures on Virgin Olive Oil," MPRA Paper 83753, University Library of Munich, Germany.

    More about this item

    Keywords

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

    JEL classification:

    • F1 - International Economics - - Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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