market approval of phytosanitary active substances in europe an empirical duration analysis abstract the aim of this paper is to analyze empirically the main determinants of delays to market approval of active substances in europe an interesting feature of this regulation is that it is based on both a decentralized examination by the rapporteur country and a centralized examination by the european food safety authority efsa our econometric analysis is based on standard survival and competing risks models the data cover 393 active substances reviewed between 1993 and 2013 we show that the review process is affected by regulatory factors the characteristics of the active substances and the characteristics of agri chemical firms log logistic and log normal survival models are the preferred parametric specifications and the results suggest that the hazard function is non monotonic over time

north south standards harmonization and international trade recent years have seen a surge in economic integration agreements eias and the development of non tariff measures ntms as a consequence a growing number of eias include provisions on ntms however little attention has been given in the literature to the effects of ntm liberalization in the context of eias in this paper we focus on provisions for technical regulations and analyze whether the north south harmonization of technical barriers affects international trade using a gravity equation it tests whether as a result of the deep integration associated with standards provisions included in the eia the southern partners trade expands with the north but at the expense of their trade with non bloc southern partners empirical results provide strong support for this conjecture moreover harmonization on the basis of regional standards negatively impacts the exports of developing countries to the north

gatt and the economics of food safety abstract food safety is of increasing importance in higher income countries where consumers demand higher quality and safer food they will do so through the market when information makes it possible they will demand better assurances of safety through government regulations where externalities and health risks prevail the microeconomics of this demand for increased food safety is discussed in terms of how it can lead to non tariff barriers to trade that might ultimately be regulated by the gatt the public goods nature of food safety is explored along a continuum of food quality characteristics for the purpose of identifying when government regulations are needed

trade restrictiveness indices in the presence of externalities an application to non tariff measures we extend the trade restrictiveness index approach to the case of market imperfections and domestic regulations addressing them we focus on standard like non tariff measures ntms affecting cost of production and potentially enhancing demand by reducing negative externalities we apply the framework to the database of kee et al 2009 and derive ad valorem equivalents aves for technical measures about 39 of the product lines affected by ntms exhibit negative aves indicating a net trade facilitating effect of these measures accounting for these effects significantly reduces previous measures of countries trade policy restrictiveness obtained while constraining these ntms to be trade reducing

agricultural dis incentives and food security is there a link using the world bank database distortions to agricultural incentives this paper analyzes the impact that agricultural dis incentives have on food security for a wide sample of countries over the 1990 2010 period we adopt a continuous treatment approach applying generalized propensity score matching to reduce potential biases stemming from differences in observed country characteristics the results provide strong evidence of self selection and heterogeneous food security impacts at different levels of policy intensity estimates of the dose response functions show that both discrimination against agriculture and large support for it lead to poor performance in the availability access and utilization dimensions of food security

trading with conditions the effect of sanitary and phytosanitary measures on the agricultural exports from low income countries market access for agricultural products is increasingly determined by capability to comply with a wide array of regulatory measures from a trade perspective one of the most important aspects of such regulatory measures is their potential distortionary effect as their cost of compliance is often asymmetrical across countries this paper investigates the effect of the european union s sanitary and phytosanitary sps measures on the exports from low income countries this study finds that sps measures result in relatively higher burden for low income countries but that membership in deep trade agreements seems to reduce the difficulties related to compliance with sps measures these results are consistent with the hypothesis that while many middle and high income countries have the internal capacity to comply with sps measures most low income countries do not

leadership turnover and the durability of international trade commitments under what conditions do states uphold their formal trade commitments while recent work focuses on the formation and design of trade agreements we know comparatively little about the durability of agreements over time we argue that government turnover undermines states commitments to liberalization even if they have already signed an international agreement meant to constrain their behavior we test this argument using data on realized trade in the presence of around 300 preferential trade agreements ptas since 1970 even in the presence of an international agreement ideological turnover is associated with increased political barriers to trade especially when the shift is toward left wing leaders these findings have important implications for our understanding of international cooperation if new leaders do not adhere to their predecessors commitments international agreements may not have lasting economic consequences

paying the price final goods protection in oecd countries this paper presents new measures of final goods trade protection in eight developed countries the analysis exploits detailed comprehensive and careful price comparisons to derive estimates that it is argued reliably capture all kinds of barriers the results show extensive protection japan s average tariff equivalent is 57 those of the european countries range from 48 to 55 and that of the united states is lowest at 12 an applied general equilibrium analysis of this protection is conducted the results include the following japan s barriers impose large costs on itself japanese and u s barriers greatly burden poorer countries the united states would benefit significantly from multilateral but not unilateral opening

determinants of world demand for u s corn seeds the role of trade costs the united states is a large net exporter of corn seeds seed trade including corn has been expanding but its determinants are not well understood this paper econometrically investigates the determinants of world demand for u s corn seeds with a detailed analysis of trade costs impeding exports flows to various markets trade costs include costs associated with distance tariffs and sanitary phytosanitary sps regulations imposed by foreign countries on u s corn seed exports sps policy information comes from the excerpt data base of usda aphis the analysis relies on a gravity like model based on an explicit specification of derived demand for seed by foreign corn producers a sps count variable is incorporated as a shifter in the unit cost of seeds faced by foreign users we use data from 48 countries and for the years 1989 to 2004 we find that all trade costs matter and have had a negative impact on u s corn seed exports tariffs matter most followed by sps measures and distance an extensive econometric investigation reveals that qualitative results are robust to specification changes but that sample selection bias is present in log linear specifications based on seed export levels and approximating zero trade data with a small positive number

the impact of regulatory heterogeneity on agri food trade we estimate the impact of regulatory heterogeneity on agri food trade using a gravity analysis that relies on detailed data on non tariff measures ntms collected by the ntm impact project the data cover a broad range of import requirements for agricultural and food products for the eu and nine of its major trade partners we find that trade is significantly reduced when importing countries have stricter maximum residue limits mrls for plant products than exporting countries for most other measures due to their qualitative nature we were unable to infer whether the importer has stricter standards relative to the exporter and we do not find a robust relationship between these measures and trade our findings suggest that at least for some import standards harmonising regulations will increase trade we also conclude that tariff reductions remain an effective means to increase trade even when ntms abound

tariff equivalent and forgone trade effects of prohibitive technical barriers to trade we derive a method to econometrically estimate the tariff equivalent and forgone trade effects of a prohibitive technical barrier to trade tbt based on wales and woodland s kuhn tucker approach to corner solutions in consumer choice the method overcomes the lack of observed data on bilateral trade flows and accounts for differentiated goods by place of origin we apply the derived random utility model to international trade in apples to identify the tariff equivalent of prohibitive phytosanitary barriers imposed by australia on potential imports of new zealand apples we estimate the forgone apple trade between the two countries the implied trade injury imposed by australia on new zealand and the welfare loss to australia the removal of the australian policy would induce net welfare gains around us 50 million annually for australia copyright 2009 oxford university press

how important are tariffs and nontariff barriers in international markets for fresh fruit international markets for agricultural products are often subject to a range of trade barriers and horticultural products are no exception this article examines the economic implications of tariffs and sanitary and phytosanitary sps regulations that are applied to global markets for fresh apples and fresh oranges we calculate regional level tariff rates and ad valorem equivalents for sps barriers following the price wedge approach a simulation model is developed and used to assess the price quantity and welfare implications of reducing tariffs removing sps barriers and removing sps barriers that have been identified as a specific trade concern stc by the world trade organization results suggest that a 36 reduction in global tariffs would lead to greater welfare gains than would the elimination of sps measures in apple markets however in orange markets we find that sps measures have much larger economic implications for producers and consumers here a 36 reduction in tariffs would lead to smaller overall welfare effects compared to removal of all sps measures and only slightly larger effects than those from removal of stcs alone

the effects of foreign exchange movements on u s domestic prices this paper draws on the fields of international economics and industrial organization to model and empirically examine the relationship between currency value fluctuations and domestic producer prices the major focus is the issue of whether and why domestic industries differ systematically in their response to exchange rate changes the major findings are that changes in the external value of the u s dollar between 1974 and 1987 passed most fully into domestic prices of industries heavily reliant on imported inports and producing goods highly substitutable for imports highly capital intensive and concentrated industries and those protected by extensive barriers to entry both from domestic and foreign sources have exhibited less domestic price change from the exchange rate movements copyright 1989 by mit press

effective protection redux abstract this paper rehabilitates effective protection for use in political economy in general equilibrium the usual definition corresponds to no economically interesting magnitude the effective rate of protection for sector j is redefined here as the uniform tariff which is equivalent to the actual differentiated tariff structure in its effect on rents to residual claimants in sector j it permits political economic ranking of how much protection is given across sectors since higher uniform tariffs imply higher losses of welfare sacrificed to the interest groups demonstrating operationality the numerical results for the us economy for the old and new concepts are not significantly correlated

assessing the impact of unilateral trade policies eba and agoa on african beneficiaries exports using matching econometrics the existing literature studying the impact of non reciprocal preferential trade agreements nrptas assumes implicitly nrptas are non randomly assigned without showing the evidence of that using a matching methodology this paper investigates whether the african growth and opportunity act agoa and the everything but arms eba unilateral trade concessions have had an impact and in what magnitude on the exports of african beneficiary countries in the light of the evidence of the non random nature endogeneity of nrptas methodologically previous studies using the matching procedure focused on bi or multilateral trade agreements our work focuses on nrptas that depend only on donors conditions accordingly we show that for nrptas gravity covariates cannot be used for the matching procedure we propose to use political variables as determinants for obtaining non reciprocal trade preferences in order to address the endogenous nature of nrpta assignment our main results confirm that a country becomes eligible for a nrpta only when it meets certain conditions defined by their donors such as political stability and economic regulation for agoa and freedom of expression and human development for eba results also show that both agoa and eba policies have had a positive impact on african beneficiary countries exports to nrpta s providers even if the magnitude impact of eba is significantly lower than that of agoa

the impact of regulations on agricultural trade evidence from the sps and tbt agreements according to world trade organization rules countries may adopt regulations under the agreements on sanitary and phyto sanitary sps and technical barriers to trade tbt we analyze the structure of these measures in agricultural trade the inventory approach suggests that european countries have among the lowest coverage ratios of all oecd countries using a gravity equation we also estimate their stringency our results suggest that they significantly reduce developing countries exports to oecd countries but do not affect trade between oecd members furthermore european imports are more negatively influenced by sps and tbts than imports of other oecd countries

disguised protectionism and linkages to the gatt wto member states of the gatt wto have linked some issue areas outside trade to the institution and did so with varying depths at the same time they have chosen not to link other issue areas what accounts for this variation the author argues that states establish a legalized linkage between the gatt wto and an issue area outside it when they are uncertain about the possibilities of disguised protectionism such uncertainty exists under two conditions when diversity in regulations in an issue area across states generates a large adverse impact on trade negative externalities but that diversity can be justified at the international level for 1 having an independent objective apart from hampering trade and 2 when there are few alternative policies to achieve that objective legitimacy states establish a highly legalized linkage in these situations to reduce the uncertainty and minimize disguised protectionism by contrast when regulatory diversity exhibits low legitimacy states establish only a weakly legalized linkage in the absence of meaningful externalities they do not establish any linkages the author evaluates this argument in two ways he provides an overview of eleven issue areas about which there have been some debates or conflicts about linkages to the gatt wto in addition he carries out in depth case studies of three issue areas labor standards environmental standards and health safety standards the findings of this article contribute to a better understanding of international institutions and cooperation as well as of the evolution of the multilateral trade institution

suspicion and perceptions of price fairness in times of crisis times of crisis bring about increased demands on businesses as shortages or unexpected but significant business costs are encountered passing on such costs to consumers is a challenge when faced with a retail price increase consumers may rely on cues as to the motive behind the increase such cues can raise suspicion of alternative motive e g taking advantage of the consumer affecting consumers judgments of price fairness this research investigates two triggers of suspicion salience of alternative motives and behavior judged to be out of character for the business results of the two studies within crisis contexts indicate that suspicion is created when alternative motives are salient and when a retailer acts out of character multiple group analyses revealed that suspicion induced negative affect and subsequent perceptions of price fairness when suspicion was present more negative feelings toward the retailer and judgments of price unfairness resulted

an assessment of environmentally related non tariff measures international trade can affect the environment in different ways this may justify the introduction of border measures by the importing countries in addition to various dispositions in the gatt gats trips agreements as well as in the agreement on agriculture this issue is regulated by the agreements on technical barriers to trade tbt and on the application of sanitary and phyto sanitary standards sps despite these rules abuse of environmental arguments for protectionist reasons remains an open issue in order to disentangle protectionism from dispositions justified on the grounds of true environmental concerns we systematically review notifications of sps and tbts by importing countries at the tariff line level trade is considered as being potentially affected when an environmental sps tbt is notified on grounds of environmental concerns affected trade is defined as imports by countries notifying such barriers protectionist use of environmental barriers is likely when only a limited number of countries impose an environmental obstacle on the imports of a given product considering data for 2001 we find that 88 per cent of the value of world trade is in products potentially affected by such measures while 39 per cent of the value of world imports is potentially subject to a protectionist use of such measures agriculture the automobile industry the pharmaceutical industry and many other sectors are concerned

modeling the interplay between sanitary and phytosanitary measures and tariff rate quotas under partial trade liberalization non tariff measures particularly sanitary and phytosanitary measures and tariff rate quotas are two critical policy barriers that impede agricultural trade unlike simple tariffs both measures contain non linear effects and binding conditions that make their treatment in modeling trade liberalization challenging in addition the coexistence of these measures carries important interactive effects that restrict trade this study investigates these joint effects by developing a conceptual framework that considers different partial liberalization scenarios our framework points to three cases that may arise a binding tariff rate quota non prohibitive sanitary and phytosanitary measure b non binding tariff rate quota non prohibitive sanitary and phytosanitary measure and c non binding tariff rate quota prohibitive sanitary and phytosanitary measure we then use a computable general equilibrium model to examine partial trade liberalization scenarios for these cases using the ongoing transatlantic trade and investment partnership negotiations as our motivation our simulations provide a more nuanced analysis of complex trade liberalization and demonstrate the importance of modeling the interplay between these different types of barriers

latin america as a target of trade barriers erected by the major developed countries in 1983 abstract according to an unctad data set nontariff barriers were applied by 14 major industrialized importers against 19 percent of latin american exports this is not an unusually high coverage ratio australia and new zealand and japan faced substantially more frequent barriers the effects of these barriers on latin american exports are difficult to estimate the estimates vary substantially depending on the method of estimation one method estimates that latin american exports to this group of 14 importers have been reduced by trade barriers by a total of 34 percent varying from 5 percent for mexico to 75 percent for argentina

lobbying and agricultural trade policy in the united states the authors study whether political campaign contributions influence agricultural protection in the united states in the manner suggested by the political economy model of grossman and helpman 1994 this is the first attempt to test this model using agricultural data the authors test the model using a detailed cross sectional data set of agricultural protection subsidies and political action committee pac contributions in the late 1990s the model is qualitatively affirmed by the data they make a novel attempt to solve a puzzle about the model s quantitative implications also found in recent studies this solution makes the simple model consistent with the complicated decisionmaking process in real world government the results imply the underpinnings of a political economy equilibrium that will be hard to dislodge

domestic distortions and international trade in this paper we develop techniques for measuring the trade policy equivalent of domestic distortions using a distance function approach our measure the trade restrictiveness index is shown to equal the uniform tariff which is welfare equivalent to a given pattern of domestic taxes and subsidies we extend the index to incorporate taxes in markets for nontraded goods and factors of production and illustrate its operationality with an application to liberalisation in mexican agriculture we conclude that our index has considerable potential in empirical work and as an aid to trade negotiators it is widely appreciated that government policies of a purely domestic nature can have major implications for a country s international trade to give just one example such implications were widely discussed in the context of the recent gatt round in which u s negotiators insisted that intra ec agricultural policy should be viewed as trade distorting however analysts and negotiators have not hitherto had access to a conceptual framework which would allow the trade effects of domestic policies to be measured in a consistent way in this paper we propose such a framework and show how it may be implemented empirically of course other attempts have been made to quantify the overall distortionary effects of domestic policies these have involved constructing empirically based indexes such as producer or consumer subsidy equivalents 2 however such measures have no theoretical foundation moreover since they use the shares of different sectors in production or consumption as weights they are likely to be systematically biased for example sectors whose output levels are reduced by high taxation are assigned low weights whereas their true weights should be higher by contrast we show below that our approach is based firmly on welfare economics and correctly uses marginal rather than average production and consumption shares as weights the approach we propose draws on recent work by two of the authors anderson and neary 1990 1992b which dealt with trade distortions only that work developed a scalar index the trade restrictiveness index or tri which equals the equiproportionate rate of trade restriction which is equivalent in welfare terms to

two principles for the next round or how to bring developing countries in from the cold t he november 1999 wto ministerial meeting in seattle was expected to usher in a new round of negotiations the ninth in a series that began in geneva in 1947 although wto members proved unable to launch a round efforts will continue in 2000 to develop a negotiating agenda in this paper i want to reinforce the call of the wto s director general mr moore for the next set of negotiations to be a development round basic notions of equity and a sense of fair play require that the next round reflect developing country interests and concerns more than was the case in earlier rounds seattle demonstrated that without greater balance the success of future negotiations will be imperiled dissatisfaction by developing countries regarding the extent to which their interests were reflected was a factor leading to the failure of the ministerial meeting the stakes are high there is a growing gap between the developed and the less developed countries highlighted in this year s world development report world bank 1999 the international community is doing too little to narrow this gap aid per capita to the developing world has fallen by nearly a third in the 1990s too often cuts in aid budgets are accompanied by the slogan trade not aid exhortations for the developing world to participate fully in the global marketplace and lectures about how government subsidies and protectionism distort prices and impede growth all too often there is a hollow ring to these exhortations as developing countries take steps to open their economies and

measuring protection mission impossible abstract there seems to be some confusion between openness and protection measures in the international trade literature the aim of this paper is to bring together the state of the art in quantifying trade policy measures and for this reason we focus on the extent of the protection granted by policies rather than on the degree of openness of the economy given the considerable amount of literature that deals with these issues we will limit our review as follows on the one hand we focus on trade policies implemented at the border and therefore do not consider all the other possible public interventions influencing trade flows on the other hand we only take into account indexes that explicitly adopt a metric expressed in a scalar aggregate tariff and quota equivalent measures or an index in a closed interval we distinguish between indexes that aggregate across products same barrier for more products and indexes that aggregate across instruments more barriers for the same product finally in order to classify the large number of indexes covered in our review we propose a typology based on three categories incidence outcome and equivalence

the choice of exchange rate index and domestic price passthrough this paper finds that the extent of real appreciation and real depreciation in the external value of the dollar since the late 70s has been overstated for most industries by the federal reserve board s 10 country index and is better proxied by the dallas fed s 101 country index earlier findings seem robust to the choice of index namely changes in the real external value of the dollar have passed most fully into domestic prices of industries heavily reliant on imported inputs and producing import substitutes and least fully into capital intensive and concentrated industries and those protected by entry barriers copyright 1991 by blackwell publishing ltd

the response of domestic prices to expected exchange rates this article examines the recent u s price experience in response to the actual and anticipated rise and fall of the dollar and tests for determinants of the observed price effects an index of real exchange rate expectations is developed and used to explore its role in determining domestic producer prices actual and expected future real exchange rates are seen to have opposite impacts on domestic price determination at the industry level further the industry specific characteristics interact asymmetrically with actual and expected real exchange rate changes copyright 1992 by university of chicago press

gatt a cooperative equilibrium in a noncooperative trading regime abstract as global tariff rates have fallen the use of nontariff barriers to trade have become more prevalent one incentive for a country to depart from free trade is to levy the optimal tariff in order to maximize domestic welfare the gatt was designed to maintain free trade through a system of managed retaliation as is well known in a game theoretic trade model of tariffs with no uncertainty free trade is an equilibrium outcome however with the introduction of uncertainty and asymmetric information it is shown that the equilibrium outcome s has each country imposing nontariff barriers to trade

the combination of gravity and welfare approaches for evaluating nontariff measures this article explores the link between gravity and welfare frameworks for measuring the impact of nontariff measures first an analytical approach suggests how to combine a gravity equation with a partial equilibrium model to determine the welfare impact of nontariff measures second an empirical application focuses on the effects of a standard that caps antibiotic residues in crustaceans in the united states the european union canada and japan while the econometric estimation of the gravity equation reports a negative impact on imports welfare evaluations show that in most cases a stricter standard leads to an increase in both domestic and international welfare

the impact of the uruguay round on tariff escalation in agricultural products abstract tariff escalation i e higher tariffs on processed agricultural products than on their input commodities has been one of the obstacles for developing countries in their efforts to establish processing industries for exports this article assesses the changes in tariff escalation resulting from the uruguay round ur tariff concessions examining the agricultural import markets of eu japan and the us the approach consisted of comparing the base and bound tariffs as listed in the ur tariff schedules of actual input output processing relationships taking also specific tariffs into account three main conclusions can be drawn first more than half of the commodity pairs have positive tariff wedges escalating tariffs about 10 per cent have no tariff wedges input and output tariffs are equal and the remaining one third of the commodity pairs have negative tariff wedges de escalating tariffs these numbers are roughly the same for both base and bound tariff wedges second as a result of the ur tariff concessions more than 80 per cent of the tariff wedges have decreased in absolute values i e positive wedges have become less positive and negative wedges have become less negative convergence towards zero is therefore a common feature third after the full implementation of the ur tariff concessions high levels of nominal tariff escalation will still remain for a number of commodity pairs highest in japan and lowest in us considering only the positive tariff wedges these will average 17 per cent after the implementation of the ur down from 23 per cent of the base years finally the study has certain methodological shortcomings and a degree of caution is in order for countries contemplating export diversification and investing in valued added industries there are well known problems with water in the tariffs and the difference between applied and bound rates of duty that are common to all studies on this subject in addition a number of factors that are beyond the scope of this study should also be taken into account when export diversification is considered these relate inter alia to the competitiveness of the export commodities or industries in question availability of appropriate technologies and infrastructure product standards technical regulations and a host of consumer preference issues having to do with brand recognition as well as product characteristics

trade restrictiveness and efficiency this article proposes a trade restrictiveness quantity index trqi to measure the welfare impact of trade restrictions based on a distance functions approach the trqi embodies two farrell measures of efficiency respectively for producers and consumers that can be computed using standard efficiency measurement techniques the trqi can also be decomposed into a trade distortion and domestic distortion component in the context of the debate on the interlinkages between openness and economic performance the trqi offers a means to disentangle economic inefficiencies induced by trade restrictions alone from otherwise not directly trade related economic inefficiencies induced by domestic distortions

how effective are trade barriers an empirical analysis of trade reduction diversion and compression we analyze the effects of trade barriers using highly disaggregated data the level of disaggregation allows us to separate the effects of tariffs and nontariff barriers ntbs into reduction dive

another look at the rationality of the livingston price expectations data 1990 another look at the rationality of the livingston price expectations data applied economics vol 22 no 4 pp 477 485

can firms location decisions counteract the balassa samuelson effect this paper examines the determinants of relative prices in a model combining a harrod balassa samuelson hbs mechanism and an endogenous location of traded good producers besides the standard hbs effect asymmetric productivity improvements in the traded good sector push new firms to enter the market this benefits local consumers who save on trade costs and exerts an upward pressure on relative wages as a consequence relative prices in the traded good sector either increase or fall in general equilibrium in a panel cointegration framework the wage effect is shown to dominate this means the hbs effect is strengthened by the relocation of traded good producers

non tariff measures specific trade concerns and tariff reduction this paper studies the determinants of the recent proliferation of specific trade concerns raised at the wto on non tariff trade measures ntms with a focus on sanitary and phytosanitary sps and technical barriers to trade tbts even though ntms are imposed de jure to protect consumers from unhealthy products they increase trade costs de facto so when tariff protection lowers ntms become effective barriers to trade and the exporting countries can complain at the dedicated committee at the wto stcs therefore we study whether stcs are raised by exporting countries as a consequence of tariff reductions in importing countries that is when non tariff measures become barriers to trade using a recent database on stcs over the period 1996 2010 we find empirical evidence that sps and tbt concerns are raised by exporting country as a consequence of importer s tariff cut

disentangling demand enhancing and trade cost effects of maximum residue regulations maximum residue level mrl regulations in plant products can create unnecessary trade barriers on one hand and enhance demand via risk mitigation or quality assurance on the other we stipulate a generalized gravity equation model to disentangle the effects of mrls on the import demand and foreign exporters supply applying the framework to the mrls on pesticides imposed by high income organization for economic co operation and development countries we find that 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 by the mrls than their competitors from the developed world jel f14 q17

food safety regulation and its implication on chinese vegetable exports growing concerns with the application of highly toxic pesticides and the growing world demands for food direct our attentions to the food safety as well as to the global arrangement of food production in china expansion of its vegetable exports brought the attention of policy planners to the international food safety regulations this paper reported the findings from the investigation about a relationship between trades of food and food safety by focusing on the relationship between chinese vegetable exports and the maximum residue limits of pesticides mrls regulation set by the importing countries and exporting country the revealed trade s behavior showed that impacts of mrls should be seen through two types of information one was the extent of coverage of regulation measured by the number of pesticides placed under the control and the other was the regulated residue levels probably because the achieved vegetable production growth was supported by the extensive use of many kinds of pesticides the expanding of the number of regulated pesticides in importing markets was more likely to act as a barrier to china s vegetable exports compared to the effect of stringency increase of mrls level importing countries gdp reflecting the market potential showed significantly positive effects on chinese vegetable exports while the effects of vegetable production and tariff rate on exports were weakened after years of improvement of productivity and worldwide policy environment our results verified the export promoting effect of stringent regulations in exporting country on its trade these findings strongly suggested that chinese authorities need to move fast to catch up to the growing concerns of international importers both from relevant policy planning and implementing to capture economic growth in the medium long term

measuring protection a cautionary tale abstract this paper comments on a theoretically based index of protection recently developed by anderson and neary the index must be calculated within the context of a specific cge model anderson and neary propose a generic model and have found that the index is robust to changes in the elasticities embedded within that model is the index also robust to changes in the specification of the model the paper identifies one historical instance where the index is extremely sensitive to the specification of the model s demand side there are important methodological lessons to be learnt from this example

the impact of eu preferential trade agreements on foreign direct investment although north south preferential trade agreements ptas are expected to affect foreign direct investment fdi there is not much evidence to date on the impact of eu ptas on the pattern of fdi the aim of this study is to assess the impact of eu ptas on the outward stocks of fdi of the eu we estimate a model based on the knowledge capital theory of the multinational enterprise over the period 1995 2005 using a sample of 173 host countries explanatory variables include measures of the level of bilateral protection and a dummy to capture the impact of deep integration provisions of ptas a dynamic panel model with fixed effects is used in order to take into account the dynamic behaviour of fdi and the heterogeneity bias results show that eu fdi is both horizontal and vertical the level of eu protection affects fdi negatively while the impact of the tariffs applied by host countries varies across groups of partner countries deep integration provisions affect eu fdi positively

the effects of farm subsidies on farm exports in the united states we estimate the elasticity of u s farm exports to u s farm subsidies using a gravity model of state level farm exports to 100 major trading destinations for the period 1999 to 2011 our identification strategy exploits the within state variation that is free of endogeneity bias in the levels and trends of farm subsidies and farm exports we find that a 1 decrease in farm subsidies would reduce u s farm exports by 0 40 per annum this equivalently means that the complete abolishment of the farm subsidy program would reduce u s farm exports by approximately 15 3 billion per year importantly we document robust evidence that amber box subsidy programs such as counter cyclical payments and marketing loan gains have the strongest effect on farm exports while green box subsidy payments such as direct payments have negligible effects finally subsidy payments affect exports only in agricultural commodities not in livestock our subsidy elasticity estimates are statistically significant stable and economically meaningful and are vitally needed by u s and global policymakers in the face of critical domestic and international developments

the mercantilist index of trade policy we introduce an index of trade policy restrictiveness defined as the uniform tariff that maintains the same trade volume as a given tariff quota structure our index overcomes the problems of the trade weighted average tariff it avoids substitution bias correctly accounts for general equilibrium transfers and takes import volume instead of welfare as benchmark empirical applications to international cross section and time series comparisons of trade policy confirm our theoretical results trade weighted average tariffs generally underestimate the true height of tariffs as measured by the trade volume equivalent index this in turn always underestimates the welfare equivalent index

do sanitary phytosanitary and quality related standards affect international trade evidence from chilean fruit exports summary increasing awareness of food safety issues has led to intensive use of sanitary phytosanitary and quality related regulations and standards imposing a burden on exporting countries worldwide this study assesses the impact of such regulations and standards estimating a gravity model for chilean fresh fruit exports that incorporates a stringency perception index that comprises different dimensions of trade requirements our results suggest that an increase in stringency has a negative and substantial effect on exported volumes and the reduction is higher if stringency increases in developed countries results also showed that different dimensions have different effects on trade

compositional standards import permits and market structure the case of canadian cheese imports the imposition of cheese compositional standards by the canadian authorities has created divisions within the canadian dairy industry and has motivated criticisms from several of canada s trade partners the standards impose minimum limits on the percentage of casein coming from fluid milk we develop a theoretical model to investigate the implications of canada s compositional cheese standards while accounting for canada s trade policy we illustrate why a type of cheese that is not directly impacted by the standards might be the most affected we show that the standards can decrease the domestic demand for milk or the value of imports our empirical investigation identified breaks in the processes determining import unit values shortly before or shortly after the beginning of the implementation of the standards

procedural and distributive fairness determinants of overall price fairness the present research isolates the fairness assessment of the process used by the retailer to set a price as well as the distributive fairness of the price compared to the price that others are offered and examines the combined effect of procedural fairness and distributive fairness on overall price fairness two experimental studies examine procedural and distributive fairness effects on overall price fairness in study 1 procedural fairness and distributive fairness are manipulated and found to interact to bring about overall price fairness in study 2 suspicion toward the seller is found to mediate the relationship between procedural fairness and overall price fairness when the price is disadvantageous

the impact of sanitary and phytosanitary measures on market entry and trade flows in an attempt to disentangle the impact of sanitary and phytosanitary sps measures on trade patterns we estimate a heckman selection model on the hs4 disaggregated level of trade we find that aggregated sps measures constitute barriers to agricultural and food trade consistently to all exporters but conditional on market entry trade flows are positively affected by sps measures additionally we find that sps measures related to conformity assessment hamper market entry and trade flows while sps measures related to product characteristics pose an entry barrier but increase bilateral trade flows conditional on meeting the standard

hidden protectionism evidence from non tariff barriers to trade in the united states abstract can the enforcement of product standards be protectionism in disguise this paper estimates the costs of non compliance with u s product standards using a new database on u s import refusals from 2002 to 2014 we find that import refusals decrease exports to the united states this trade reducing effect is driven by developing countries and by refusals without any product sample analysis in particular during the subprime crisis and its aftermath we also provide evidence that given product standards were enforced more strictly during the crisis while the quality of imported products did not deteriorate these results are consistent with the existence of counter cyclical hidden protectionism due to non tariff barriers to trade in the united states

price fairness good and service differences and the role of vendor costs prior research suggests that consumers are forgiving of a price increase that is commensurate with increased vendor costs we argue that the perceived fairness of the price increase will also depend on the alignability of the cost and price increases such that alignable increases will be perceived as more acceptable than nonalignable increases moreover we predict that when a cost increase is nonalignable consumers will be more receptive to a service price increase than a goods price increase evidence from a series of experiments supports both predictions

how far from harmonization are sanitary phytosanitary and quality related standards an exporter s perception approach harmonization of trade regulations and standards is perhaps the most contentious issue regarding export markets due to the impacts that it can have on trade we determine the extent of harmonization as perceived by exporters with respect to the major sanitary and phytosanitary standards spss and quality measures which chile faces in 16 international fresh fruit markets the methodology combined qualitative and quantitative techniques first the most relevant safety and quality standards and regulations were identified and ranked second a representative sample of exporters was interviewed to assess their perceptions regarding the level of stringency across markets and time for selected regulations perceptions were ranked on a likert scale and based on this scale a stringency index was constructed the results show that chile faces regulations which can be grouped into the following categories i phytosanitary measures ii tolerance limits for pesticide residues and contaminants iii hygiene requirements iv labeling marking and packaging v product and process standards and vi registration procedures and other import requirements the number of regulations varied among countries ranging from 13 to 3 out of the 14 considered in the study the most stringent country among the sample as perceived by exporters was mexico whereas the least stringent was saudi arabia additionally exporters agreed that stringency has increased over time with an average of 15 between 2005 and 2009

evaluating the trade restrictiveness of phytosanitary measures on u s fresh fruit and vegetable imports empirically assessing sanitary and phytosanitary regulations has proven difficult because most data sources indicate whether a regulation exists but provide no information on the type or importance of the respective measure in this article we construct a novel database of u s phytosanitary measures and match these to 47 fresh fruit and vegetable product imports from 89 exporting countries over the period 1996 2008 a product line gravity equation that accounts for zero trade flows is developed to investigate the trade impact of different pest mitigation measures while the results suggest that phytosanitary treatments generally reduce trade the actual restrictiveness of these measures diminishes dramatically as exporters accumulate experience and it vanishes when exporters reach a certain threshold the results have important policy implications considering the number of empirical studies that find a negative impact of non tariff measures on trade copyright 2013 oxford university press

industrial protection in the developed countries much has been said in recent years about growing industrial protectionism in the developed countries but little effort has been made to assess quantitatively the increases in protection that have actually occurred this essay will provide estimates for the major developed countries the united states the european common market and japan on changes in their tariff and non tariff barriers on manufactured imports in general and on imports from the developing countries in particular the protection of agricultural products is however excluded from the preview of the essay

antidumping and countervailing duty decisions in the e c and in the u s an experiment in comparative political economy abstract in recent years there has been a growing concern about the recourse to antidumping measures by the gatt member countries such measures can become a substitute for selective protection in the present article the dumping and injury determinations of the e c are subjected to econometric analysis using the finger hall nelson fhn model which makes a distinction between the political determinants and the technical determinants the results show that the technical variables dominate the dumping decisions while the political variables are more important in the injury determinations of the e c a comparison with the results obtained by the fhn study confirm the broad similarity between the e c and the u s patterns although the e c injury decisions are somewhat more susceptible to the influence of political variables the results of the study suggest that those who are interested in restraining the misuse of the antidumping provisions should concentrate their attention on the injury determination mechanism

do wto members have more liberal trade policy abstract this paper uses 68 measures of trade policy and liberalization to ask if membership in the world trade organization wto and its predecessor the general agreement on tariffs and trade gatt is associated with more liberal trade policy almost no measures of trade policy are significantly correlated with gatt wto membership trade liberalizations when they occur usually lag gatt entry by many years and the gatt wto often admits countries that are closed and remain closed for years the exception to the rule is that wto members tend to have slightly more freedom as judged by the heritage foundation s index

trade reform with quotas partial rent retention and tariffs quotas are the predominant means of protection in developed countries with quota rents commonly shared between exporter and importer this paper derives shadow prices appropriate to evaluating trade reform under these circumstances and provides a number of useful sufficient conditions for welfare improving piecemeal reform in doing so the authors apply the distorted quantity constrained expenditure function and use implicit separability to derive more powerful results than have previously been available

effective protection policy appraisal and trade policy reform when the effective protection concept was rst developed it was widely regarded as a key widely used especially in the context of policy reform and policy appraisal in developing countries this paper re appraises tmeasure of the structure of protection and became widely deployed it was however subject to a he concept reviews the extent of its application and discusses the factors behind its longevity as an investigative tool the theoretical critique on the grounds that it was essentially a partial equilibrium measure which could not be easily embedded ipaper concludes that the measure still has a role to play in evaluating the structure of protection n a general equilibrium framework notwithstanding this critique the concept has continued to be

does aid for trade enhance export performance investigating on the infrastructure channel today there are few empirical studies assessing the effectiveness of aid for trade on trade pe rformance furthermore existing works do not test channels by which this impact is transiting we address this question using an empirical analysis constructed in two steps following a model of export performance we first test if institutions and infrastructure our two potential channels of transmission are indeed determinants of export performance secondly we test the impact of aid for trade sectoral flows on the determinants that were highlighted in the first part we show that the infrastructure channel appears to be highly significant in the first step whereas the institutional one turns out to have limited impact on developing countries exports furthermore in our second step aid for infrastructure seems once instrumented to have a strong and positive impact on the infrastructure level our results indicate that a 10 increase in aid to infrastructure commitments per capita leads to an average increase of the exports over gdp ratio for a developing country of 2 34 it is also equivalent to a 2 71 reduction of the tariff and non tariff barriers this highlights the very high economic impact of aid for trade throughout the channel of infrastructures

trade openness and economic growth a cross country empirical investigation abstract this paper demonstrates that trade liberalization does not have a simple and straightforward relationship with growth using a large number of openness measures for a cross section of countries over the last three decades we use two groups of trade openness measures the regression results for numerous trade intensity ratios are mostly consistent with the existing literature however contrary to the conventional view on the growth effects of trade barriers our estimation results show that trade barriers are positively and in most specifications significantly associated with growth especially for developing countries and they are consistent with the findings of theoretical growth and development literature

agricultural trade and the gatt wto does membership make a difference recent empirical studies have estimated the trade flow effect of membership in the world trade organization wto and its predecessor the general agreement on tariffs and trade gatt one important although largely untested conclusion from this literature is that the gatt wto works well if we ignore trade in agriculture one of the institutions seemingly apparent failures this article investigates this conclusion using a large panel of agricultural and non agricultural trade flows the results are impressive the multilateral institution has delivered significant positive effects on members agricultural trade despite its sensitive nature and the reluctance of members to undertake serious reform these findings are robust to various slices of the data and recent advances in the specification and estimation of the gravity equation to account for sample selection issues and the extensive margin of trade copyright 2012 oxford university press

the causal impact of haccp on seafood imports in the u s an application of difference in differences within the gravity model abstract we offer a difference in differences did approach to assess the causal effect of hazard analysis by critical control points haccp a food safety regulation on u s seafood imports with a gravity model and event specific changes with a panel database of u s seafood imports from 217 partner countries from 1991 to 2006 we employ a causal framework of analysis with a treatment group of u s seafood imports and two alternative control groups u s food imports outside of haccp rules and the european union s 15 seafood imports further we assess the effects of haccp on the intensive and extensive margins of u s seafood imports contrary to previous work we find that haacp implementation has no effect on the flow of u s seafood imports while the estimates of the other key variables are consistent across the models seen in previous work thus we find evidence that non tariff measures like haccp had net null effect on imports though the distribution of imports shifted

the extent of nontariff barriers to industrial countries imports this paper examines the extent of non tariff barriers to sixteen industrial countries visible imports using three alternative measures it shows that governmental commodity specific border measures affect over 27 of all imports and over 34 of imports from developing countries it also shows that during the period 1981 83 ntbs became significantly more extensive detailed statistics reveal considerable variations in ntb coverage by commodity type of barrier importer and exporter the data on which these conclusions are based are compiled from official information at the finest level of disaggregation they are described in the paper

a reexamination of the rationality of the livingston price expectations note the livingston survey data have been used often although never entirely appropriately to test the rationality of price expectations john carlson 1977 was the first to point out that the livingston panel members responses were properly viewed as 8 and 14 month forecasts sampled at six month intervals brown and maital 1981 using a technique suggested by hansen and hodrick 1980 investigated the rationality of the livingston series while taking account of error term autocorrelation caused by the overlap of forecast intervals their analysis was flawed however by the use of livingston s original published data rather than the more appropriate carlson adjusted version l a further difficulty is that the errors in panel mean forecasts are heteroskedastic due to year to year variation in the size of the panels and variance of panel responses 2 all previous tests of rationality have failed to properly account for at least one of these two features of the data here we remedy this deficiency

voluntary export restraints and resource allocation in exporting countries this article analyzes the resource implications of voluntary export restraints vers for exporting countries a simple analytical method is used to demonstrate that by reducing the marginal revenue of its factors of production a ver causes an industry in the exporting country to contract and that the efficiency losses from a ver depend on the ease with which sales can be diverted from the restricted toward the unrestricted markets the method is applied to test the effects of the u s orderly marketing agreement oma for producers of leather footware in the republic of korea during the period 1977 81 the authors estimate that the marginal revenue product of factors employed in leather footwear declined by as much as 9 percent because of the oma an estimate that is corroborated by inspection of time series on output employment and wages of the korean footwear sector this implies that there was pressure on the korean footware industry to contract as a result of the oma

monetary deregulation and inverting the inverted fisher effect abstract we find evidence that deregulation allowing interest payments on checkable deposits decreased increased the sensitivity of the real nominal rate of interest to expected inflation our results provide further confirmation of the inverted fisher effect

trade liberalization in general equilibrium intertemporal and inter industry effects this paper uses a dynamic computable general equilibrium model to simulate the effects of unilateral reductions by the u s in tariffs and voluntary export restraints ver s we consider 50 percent cuts in tariffs and in ad valorem ver equivalents separately and in combination the model features intertemporal optimization by households and firms explicit adjustment dynamics an integrated treatment of the current and capital accounts of the balance of payments and industry disaggregation central findings include 1 ver s are considerably more significant than tariffs in terms of the magnitude of the macroeconomic effects induced by their reduction 2 while ver reductions enhance domestic welfare unilateral tariff cuts reduce domestic welfare as a consequence of u s monopsony power and associated adverse terms of trade effects 3 international capital movements critically regulate the responses of the u s and foreign economies to these trade initiatives and produce significant differences between short and long run effects and 4 effects differ substantially across industries together these findings indicate that simulation analyses that disregard international capital movements adjustment dynamics and industry differences may generate seriously misleading results

tariff equivalent of technical barriers to trade with imperfect substitution and trade costs the price wedge method yields a tariff equivalent estimate of technical barriers to trade tbt an extension of this method accounts for imperfect substitution between domestic and imported goods and incorporates recent findings on trade costs we explore the sensitivity of this revamped tbt estimate to its key determinants substitution elasticity preference for home good and trade cost we use the augmented approach to investigate the recent japan u s apple trade dispute and find that removing the japanese tbt would yield limited export gains to the united states we then draw policy implications of our findings

tariff rates tariff revenue and tariff reform some new facts this article compares the statutory and valorem tariff rates official rates with the ratio of tariff revenues to import values collected rates for jamaica kenya and pakistan it identifies four general features of the tariff codes considers whether these features apply to all developing countries and discusses four implications of these features for tariff reform first the collected rate for any given item in the tariff code is only weakly related to the official rate for the item second the variation of collected rates on average increase much less than the official rates fourth the relation between official rates and collected rates is nonlinear because the slope is lower at higher levels of the official rate

agricultural trade restrictiveness in the european union and the united states the article provides a summary measure of the uruguay round tariff reduction commitments in the european union and the united states using the mercantilistic trade restrictiveness index mtri as the tariff aggregator we compute the index for agricultural commodity aggregates assuming a specific constant elasticity of substitution functional form for import demand the levels of the mtri under the actual commitments of the uruguay round are computed and compared with two hypothetical cases a deeper cut in higher tariffs and a uniform reduction of each tariff both leading to the same average reduction as in the uruguay round this makes it possible to infer how reducing tariff dispersion will help improve market access in future trade agreements and provides some guidelines for aggregating detailed tariffs in trade models

fruit and vegetable access to eu markets dissecting tariffs faced by mediterranean countries this paper analyzes the access of eastern and southern mediterranean countries to the eu fruit and vegetables market and provides a measure of the level of preferences from which they benefit to take into account the complexity of eu protection in the fv morocco has the highest preference while syria and israel have the lowest we simulated a multilateral reduction in the mfn tariffs as planned in the doha round and showed that this would reduce the heterogeneity within the zone by more strongly eroding the preferences of the most advantaged countries the classification of entry price products as sensitive products would either benefit or have no effect on most mediterranean countries

protectionism indices for non tariff measures an application to maximum residue levels abstract we propose aggregation indices of non tariff measures ntms to quantify their protectionism relative to international standards of stringency we apply the indices to national maximum residue limit mrl regulations on pesticides and veterinary drugs affecting agricultural and food trade and using a science based criteria embodied in codex alimentarius international standards the approach links two streams of the ntm literature one concerned with the aggregation of various ntms into operational indices for econometric and modeling purposes and the other attempting to evaluate the protectionism of ntms the data used in the application come from a large international dataset on veterinary and pesticide mrls and codex mrl standards for a large set of countries

exchange rate effects on agricultural exports transaction level evidence from pakistan this article examines the effects of domestic currency depreciation on agricultural exports from pakistan including the responses of price and quantity margins it uses highly disaggregated firm level data that contains the exchange rates of the actual currencies of invoicing at the transaction level the study finds that the currency depreciation positively affects both intensive and extensive margins the intensive margin increase in agricultural exports operates mainly through prices whereas the response of quantities is relatively smaller moreover depreciation improves the extensive margins of firms and products and expands the client base in existing markets these responses vary widely across firms exporting experience trade orientation sectoral and spatial distribution exchange rate regimes and invoicing currencies

agriculture in the uruguay round interests of developing countries agriculture has been favored and protected in developed countries while trade policies in developing countries frequently support industry at the expense of exportables and unprotected importables in agriculture this protection constrains expansion of temperate and subtropical agricultural exports from developing countries several studies have estimated the effects of liberalization of trade restrictions on world prices export earnings and import costs while developing countries generally would benefit from having the agricultural policies of the most powerful countries bound by international rules on trade there are differences among the developing countries as to which products should be liberalized even if such conflicts did not exist politically feasible means to obtain such compliance are elusive the potentially most feasible approaches for developing countries to obtain some measure of liberalization in the uruguay round of trade negotiations are discussed

non linear panel estimation of import quotas the evolution of quota premiums under the atc abstract we develop a panel based inequality constrained least squares icls framework for estimating the export tax equivalent ete of quotas where the etes vary over time working with a panel of bilateral data on textile and clothing trade underlying bilateral tariffs and the country pair coverage of quotas under the wto s agreement on textiles and clothing atc we use this framework to examine the evolution of market access conditions in the textile and clothing sectors our estimating framework takes advantage of the panel nature of trade data when calculating export tax equivalents while allowing for inequality constraints on the quota premium estimates we also implement quadrature methods for calculating confidence intervals for our regression based ntb measures

maginot line of european farm policies as the european community has increased it s level of self sufficiency in agriculture it has moved from being an importer of many agricultural commodities to being an exporter as a consequence countries that were formerly exporters to the community now find themselves competing in third markets with subsidised exports from the community they may well conclude as have numerous west european scholars that the common agricultural policy cap no longer serves the interests of community agriculture or its political relations with the rest of the world it is expensive and cumbersome to operate protection is too high and unbalanced commodity expenditures are poorly allocated and their redistributive effects aggravate inequalities in the final analysis rather than being a unifying institution within the community the cap in its present form threatens the political equilibrium of the community and endangers the international trading system

measuring the restrictiveness of trade policy this article provides an introduction to the trade restrictiveness index tri which equals the uniform tariff that is welfare equivalent to a given pattern of trade protection unlike standard measures of trade restrictiveness the tri has a solid theoretical basis can incorporate both tariffs and quantitative restrictions and can be adapted to construct the trade policy equivalent of domestic distortions the article compares a number of applications and describes procedures for operationalizing the tri on a personal computer the authors conclude that the tri has considerable potential in empirical work

shadow pricing market access a trade benefit function approach abstract appropriate assessment of the social value of market access is at the core of a broad range of inquiries in trade research we propose a new approach based on a trade benefit function to obtain the shadow value of net imports our approach is in keeping with well established trade welfare measurement techniques for the trade benefit function is dual to the standard trade expenditure function this dual relation further allows for a direct retrieval of the shadow values of net imports from the trade benefit function the operationality of our approach is demonstrated in a series of applications and simulations