Hostname: page-component-8448b6f56d-qsmjn Total loading time: 0 Render date: 2024-04-19T02:30:26.479Z Has data issue: false hasContentIssue false
  • English
  • Français

Welfare costs and benefits of non-tariff measures in trade: a conceptual framework and application

Published online by Cambridge University Press:  06 July 2012

JOHN BEGHIN ,
ANNE-CÉLIA DISDIER ,
STÉPHAN MARETTE  and
FRANK VAN TONGEREN
JOHN BEGHIN
Affiliation:
Iowa State University and INRA, UMR Economie Publique INRA-AgroParisTech
ANNE-CÉLIA DISDIER
Affiliation:
Paris School of Economics, INRA UMR PSE
STÉPHAN MARETTE
Affiliation:
INRA, UMR Economie Publique INRA-AgroParisTech
FRANK VAN TONGEREN*
Affiliation:
OECD, Trade and Agriculture Directorate
*
*Email: frank.vantongeren@oecd.org.
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper provides a systematic welfare-based approach to analyze the impact of non-tariff measures (NTMs) on trade and welfare in the presence of market imperfections. It focuses on standard-like measures such as technical barriers and sanitary and phytosanitary regulations. The approach overcomes the shortcomings of the mainstream approach based on the analysis of foregone trade caused by trade costs. The latter ignores market imperfections, and welfare is found to increases when NTMs are reduced and trade expands. We explain how to account for external effects and market failures in trade-focused welfare analysis, leading to a more balanced overall assessment of measures despite a potential reduction of trade flows. The relationships between trade, welfare, and NTMs are complex, and generalizations are best avoided. Very often, the optimum NTM is not the absence of regulation. An application to shrimp trade illustrates the feasibility of the proposed approach. The illustration shows that the reinforcement of a food safety standard can be socially preferable to the status-quo situation, both domestically and internationally.

Type
Review Article
Information
World Trade Review , Volume 11 , Issue 3: Symposium Issue: Standards and Non-Tariff Barriers in Trade , July 2012 , pp. 356 - 375
Copyright
Copyright © John Beghin, Anne-Célia Disdier, Stéphan Marette and Frank Van Tongeren 2012

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Antle, J. (2000), ‘No Such Thing as Free Safe Lunch: The Cost of Food Safety Regulation in the Meat Industry’, American Journal of Agricultural Economics, 82(2): 310–322.CrossRefGoogle Scholar
Asche, F. and Bjørndal, T. (2001), ‘Demand Elasticities for Fish and Seafood: A Review’, Unpublished, Centre for Fisheries Economics, Norwegian School of Economics and Business Administration, Norway.Google Scholar
Bureau, J. C., Marette, S., and Schiavina, A. (1998), ‘Non-Tariff Trade Barriers and Consumers’ Information: The Case of EU–US Trade Dispute on Beef’, European Review of Agricultural Economics, 25(4): 437–462.CrossRefGoogle Scholar
Chichilnisky, G. (1994), ‘North–South Trade and the Global Environment’, American Economic Review, 84(4): 851–874.Google Scholar
Czubala, W., Shepherd, B., and Wilson, J. S. (2009), ‘Help or Hindrance? The Impact of Harmonised Standards on African Exports’, Journal of African Economies, 18(5): 711–744.CrossRefGoogle Scholar
Debaere, P. (2010), ‘Small Fish – Big Issues: The Impact of Trade Policy on the Global Shrimp Market’, World Trade Review, 9(2): 353–374.CrossRefGoogle Scholar
Dey, M. M., Rodriguez, U.-P., Briones, R. M., Li, C. O., Haque, M. S., Li, L., Kumar, P., Koeshendrajana, S., Yew, T. S., Senaratne, A., Nissapa, A., Khiem, N. T., and Ahmed, M. (2004), ‘Disaggregated Projections on Supply, Demand, and Trade for Developing Asia: Preliminary Results from the Asiafish Model’, Paper presented at IIFET Meeting, Tokyo, 21–30 July.Google Scholar
Disdier, A.-C., Fontagné, L., and Mimouni, M. (2008), ‘The Impact of Regulations on Agricultural Trade: Evidence from SPS and TBT Agreements’, American Journal of Agricultural Economics, 90(2): 336–350.CrossRefGoogle Scholar
Disdier, A.-C. and Marette, S. (2010), ‘The Combination of Gravity and Welfare Approaches for Evaluating Non-Tariff Measures’, American Journal of Agricultural Economics, 92(3): 713–726.CrossRefGoogle Scholar
Disdier, A.-C. and Marette, S. (2012), ‘How Do Consumers in Developed Countries Value the Environment and Workers’ Social Rights in Developing Countries?’, Food Policy, 37(1): 1–11.CrossRefGoogle Scholar
Disdier, A.-C. and van Tongeren, F. (2010), ‘Non-Tariff Measures in Agri-Food Trade: What Do the Data Tell Us? Evidence from a Cluster Analysis on OECD Imports’, Applied Economic Perspectives and Policy, 32(3): 436–455.CrossRefGoogle Scholar
Ferrantino, M. (2006), Quantifying the Trade and Economic Effects of Non-Tariff Measures, OECD Trade Policy Working Papers, No. 28, OECD Publishing.Google Scholar
Fontagné, L., Mimouni, M., and Pasteels, J.-M. (2005), ‘Estimating the Impact of Environmental SPS and TBT on International Trade’, Integration and Trade Journal, 22: 7–37.Google Scholar
Gossner, C. M., Schlundt, J., Ben Embarek, P., Hird, S., Lo-Fo-Wong, D., Beltran, J. J., Teoh, K. N., and Tritscher, A. (2009), ‘The Melamine Incident: Implications for International Food and Feed Safety’, Environmental Health Perspectives, 117(12): 1803–1808.CrossRefGoogle ScholarPubMed
Grothe, U., Deblitz, C., and Stegmann, S. (2000), ‘Total Costs and Environmental Standards for Selected Agricultural Products in Brazil, Germany and Indonesia: The Impact on International Competition’, Quarterly Journal of International Agriculture, 19(3): 299–318.Google Scholar
Henry de Frahan, B. and Vancauteren, M. (2006), ‘Harmonization of Food Regulations and Trade in the Single Market: Evidence from Disaggregated Data’, European Review of Agricultural Economics, 33(3): 337–360.CrossRefGoogle Scholar
Hervieu, S. (2009), ‘A Madagascar, la Seule Crevette d'Elevage Bio du Monde’, Le Monde, 1 April, p. 4.Google Scholar
Josling, T., Roberts, D., and Orden, D. (2004), Food Regulation and Trade: Toward a Safe and Open Global System, Washington, DC: Institute for International Economics.Google Scholar
Kee, H. L., Nicita, A., and Olarreaga, M. (2009), ‘Estimating Trade Restrictiveness Indices’, The Economic Journal, 119: 172–199.Google Scholar
Korinek, J., Melatos, M., and Rau, M. L. (2008), A Review of Methods for Quantifying the Trade Effects of Standards in the Agri-Food Sector, OECD Trade Policy Working Papers, No. 79, OECD Publishing.Google Scholar
Lusk, J. L. and Shogren, J. F. (2007), Experimental Auctions: Methods and Applications in Economic and Marketing Research, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Maertens, M., Dries, L., Dedehouanou, F. A., and Swinnen, J. F. M. (2007), ‘High-Value Supply Chains, Food Standards and Rural Households in Developing Countries’, in Swinnen, J. F. M. (ed.), Global Supply Chains, Standards and the Poor, Wallingford: Cabi Publishing, pp. 159–172.Google Scholar
Maertens, M. and Swinnen, J. F. M. (2009), ‘Trade, Standards, and Poverty: Evidence from Senegal’, World Development, 37(1): 161–178.CrossRefGoogle Scholar
Marette, S. and Beghin, J. C. (2010), ‘Are Standards Always Protectionist?’, Review of International Economics, 18(1): 179–192.CrossRefGoogle Scholar
Marette, S., Roosen, J., Blanchemanche, S., and Verger, P. (2008), ‘The Choice of Fish Species: An Experiment Measuring the Impact of Risk and Benefit Information’, Journal of Agricultural and Resource Economics, 33: 1–18.Google Scholar
Maskus, K., Otsuki, T., and Wilson, J. S. (2005), ‘The Costs of Compliance with Product Standards for Firms in Developing Countries: An Econometric Study’, World Bank Working Paper No. 3590, Washington, DC.CrossRefGoogle Scholar
MAST (Multi-Agency Support Team) (2008), ‘First Progress Report to the Group of Eminent Persons on Non-tariff Barriers (June 2008)’, UNCTAD, Manuscript, Geneva.Google Scholar
Moenius, J. (1999), ‘Information versus Product Adaptation: The Role of Standards in Trade’, University of California Working Paper No. 11/2499, San Diego.Google Scholar
Moenius, J. (2006), ‘The Good, the Bad and the Ambiguous: Standards and Trade in Agricultural Products’, University of Redlands, Manuscript.Google Scholar
Orden, D. and Romano, E. (1996), ‘The Avocado Dispute and Other Technical Barriers to Agricultural Trade Under NAFTA’, invited paper presented at the conference ‘NAFTA and Agriculture: Is the Experiment Working’, San Antonio, Texas.Google Scholar
Otsuki, T., Wilson, J. S., and Sewadeh, M. (2001), ‘What Price Precaution? European Harmonisation of Aflatoxin Regulations and African Groundnut Exports’, European Review of Agricultural Economics, 28(3): 263–283.CrossRefGoogle Scholar
Paarlberg, P. L. and Lee, J. G. (1998), ‘Import Restrictions in the Presence of a Health Risk: An Illustration using FMD’, American Journal of Agricultural Economics, 80(1): 175–183.CrossRefGoogle Scholar
Pendell, D. L., Leatherman, J., Schroeder, T. C., and Alward, G. S. (2007), ‘The Economic Impacts of a Foot-And-Mouth Disease Outbreak: A Regional Analysis’, Journal of Agricultural and Applied Economics, 39: 19–33.CrossRefGoogle Scholar
Peterson, E. B. and Orden, D. (2008), ‘Avocado Pests and Avocado Trade’, American Journal of Agricultural Economics, 90(2): 321–335.CrossRefGoogle Scholar
Polinsky, A. M. and Rogerson, W. (1983), ‘Products Liability and Consumer Misperceptions and Market Power’, The Bell Journal of Economics, 14(2): 581–589.CrossRefGoogle Scholar
Rau, M. L. and van Tongeren, F. (2007), ‘Modeling Differentiated Quality Standards in the Agri-Food Sector: The Case of Meat Trade in the Enlarged EU’, Agricultural Economics, 37 (2–3): 305–315.CrossRefGoogle Scholar
Rau, M. L. and van Tongeren, F. (2009), ‘Heterogeneous Firms and Homogenizing Standards in Agri-Food Trade: The Polish Meat Case’, European Review of Agricultural Economics, 36(4): 479–505.CrossRefGoogle Scholar
Roheim, C. (2004), ‘Trade Liberalization in Fish Products: Impacts on Sustainability of International Markets and Fish Resources’, in Aksoy, A. and Beghin, J. (eds.), Global Agricultural Trade and Developing Countries, Washington, DC: The World Bank, pp. 275–295.Google Scholar
United Nations Food and Agriculture Organization (2002), ‘FAO Urges Countries to Discontinue the Use of Chloramphenicol in Animal Production’. FAO Press Release (02/03), 24 January 2002, Rome, Italy.Google Scholar
United Nations Food and Agriculture Organization (2009), FishStat Plus – Universal Software for Fishery Statistical Time Series, Rome.Google Scholar
van Tongeren, F., Beghin, J., and Marette, S. (2009), A Cost–Benefit Framework for the Assessment of Non-Tariff Measures in Agro-Food Trade, OECD Food, Agriculture and Fisheries Working Papers, No. 21, OECD Publishing.CrossRefGoogle Scholar
Wilson, J. S. and Otsuki, T. (2004), ‘Standards and Technical Regulations and Firms in Developing Countries: New Evidence from A World Bank Technical Barriers to Trade Survey’, World Bank, Manuscript.Google Scholar
Wilson, N. L. and Anton, J. (2006), ‘Combining Risk Assessment and Economics in Managing a Sanitary-Phytosanitary Risk’, American Journal of Agricultural Economics, 88(1): 194–202.CrossRefGoogle Scholar
World Health Organization (2011), ‘Antimicrobial Resistance’, Fact sheet No. 194, Media Center, February 2011, Switzerland, Geneva.Google Scholar
Xiong, B. and Beghin, J. C. (forthcoming), ‘Aflatoxin Redux: Does European Aflatoxin Regulation Hurt Groundnut Exporters from Africa?’ European Review of Agricultural Economics.Google Scholar
Yue, C., Beghin, J. C., and Jensen, H. H. (2006), ‘Tariff Equivalent of Technical Barriers to Trade with Imperfect Substitution and Trade Costs’, American Journal of Agricultural Economics, 88(4): 947–960.CrossRefGoogle Scholar
Supplementary material: PDF

Beghin et al. supplementary material

Appendix

Download Beghin et al. supplementary material(PDF)
PDF 36.7 KB