The effects of non-tariff measures on agri-food trade: a review and meta-analysis of empirical evidence

Santeramo, Fabio Gaetano and Lamonaca, Emilia (2018): The effects of non-tariff measures on agri-food trade: a review and meta-analysis of empirical evidence. Forthcoming in: Journal of Agricultural Economics , Vol. 70, No. 1 (January 2020)

Abstract

The increasing policy interests and the vivid academic debate on non-tariff measures (NTMs) has stimulated a growing literature on how NTMs affect agri-food trade. The empirical literature provides contrasting and heterogeneous evidence, with some studies supporting the ‘standards as catalysts’ view, and others favouring the ‘standards as barriers’ explanation. To the extent that NTMs can influence trade, understanding the prevailing effect, and the motivations behind one effect or the other, is a pressing issue. We review a large body of empirical evidence on the effect of NTMs on agri-food trade and conduct a meta-analysis to disentangle potential determinants of heterogeneity in estimates. Our findings show the role played by the publication process and by study-specific assumptions. Some characteristics of the studies are correlated with positive significant estimates, others covary with negative significant estimates. Overall, we found that the effects of NTMs vary across types of NTMs, proxy for NTMs, and levels of details of studies. Not negligible is the influence of methodological issues and publication process.

• Item Type: MPRA Paper
• Language: English
• Keywords: Non-tariff measures; Trade barriers; Trade standards; Meta-analysis
• Subjects: F - International Economics > F1 - Trade > F13 - Trade Policy ; International Trade Organizations; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q17 - Agriculture in International Trade; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q18 - Agricultural Policy ; Food Policy

References

Anders, S. and Caswell, J.A. ‘Standards-as-barriers versus standards-as-catalysts: Assessing the impact of HACCP implementation on U.S. seafood imports’, American Journal of Agricultural Economics, Vol. 91(2), (2009) pp. 310–321.

Arita, S., Beckman, J. and Mitchell, L. ‘Reducing transatlantic barriers on US-EU agri-food trade: What are the possible gains?’, Food Policy, Vol. 68, (2017) pp. 233-247.

Baldwin, R. and Taglioni, D. Gravity for dummies and dummies for gravity equations, Working Paper No. 12516 (National Bureau of Economic Research, 2006).

Beckman, J. and Arita, S. ‘Modeling the Interplay between Sanitary and Phytosanitary Measures and Tariff-rate Quotas under Partial Trade Liberalization’, American Journal of Agricultural Economics, Vol. 99(4), (2016) pp. 1078–1095.

Beghin, J.C., Maertens, M. and Swinnen, J. ‘Nontariff measures and standards in trade and global value chains’, Annual Review of Resource Economics, Vol. 7(1), (2015) pp. 425-450.

Belsley, D.A., Kuh, E., and Welsch, R.E.. Regression diagnostics. New York: Wiley (1980).

Böcker, T.G. and Finger, R. ‘A meta‐analysis on the elasticity of demand for pesticides’, Journal of Agricultural Economics, Vol. 68(2), (2017) pp. 518-533.

Card, D. and Krueger, A.B. ‘Time-series minimum-wage studies: a meta-analysis’, The American Economic Review, Vol. 85(2), (1995) pp. 238-243.

Cardamone, P. ‘The effect of preferential trade agreements on monthly fruit exports to the European Union’, European Review of Agricultural Economics, Vol. 38(4), (2011) pp. 553-586.

Chen, C., Yang, J. and Findlay, C. ‘Measuring the effect of food safety standards on China’s agricultural exports’, Review of World Economics, Vol. 144(1), (2008) pp. 83–106.

Chevassus-Lozza, E., Latouche, K., Majkovic, D. and Unguru, M. ‘The importance of EU-15 borders for CEECs agri-food exports: The role of tariffs and non-tariff measures in the pre-accession period’, Food Policy, Vol. 33(6), (2008) pp. 595–606.

Cioffi, A., Santeramo, F.G. and Vitale, C.D. ‘The price stabilization effects of the EU entry price scheme for fruit and vegetables’, Agricultural Economics, Vol. 42(3), (2011) pp. 405-418.

Cipollina, M. and Salvatici, L. ‘Measuring protection: mission impossible?’, Journal of Economic Surveys, Vol. 22(3), (2008) pp. 577-616.

Cipollina, M. and Salvatici, L. ‘Reciprocal trade agreements in gravity models: A meta‐analysis’, Review of International Economics, Vol. 18(1), (2010) pp. 63-80.

Crivelli, P. and Gröschl, J. ‘The impact of sanitary and phytosanitary measures on market entry and trade flows’, The World Economy, Vol. 39(3), (2016) pp. 444-473.

Dal Bianco, A., Boatto, V.L., Caracciolo, F. and Santeramo, F.G. ‘Tariffs and non-tariff frictions in the world wine trade’, European Review of Agricultural Economics, Vol. 43(1), (2016) pp. 31-57.

Dawson, P.J. ‘The export–income relationship and trade liberalisation in Bangladesh’, Journal of Policy Modeling, Vol. 28(8), (2006) pp. 889-896.

de Frahan, B.H. and Vancauteren, M. ‘Harmonisation of food regulations and trade in the Single Market: evidence from disaggregated data’, European Review of Agricultural Economics, Vol. 33(3), (2006) pp. 337-360.

Disdier, A.C. and Head, K. ‘The puzzling persistence of the distance effect on bilateral trade’, The Review of Economics and Statistics, Vol. 90(1), (2008) pp. 37-48.

Disdier, A.C. and Marette, S. ‘The combination of gravity and welfare approaches for evaluating non-tariff measures’, American Journal of Agricultural Economics, Vol. 92(3), (2010) pp. 713–726.

Disdier, A.C., Fontagné, L. and Mimouni, M. ‘The impact of regulations on agricultural trade: evidence from the SPS and TBT agreements’, American Journal of Agricultural Economics, Vol. 90(2), (2008b) pp. 336-350.

Doucouliagos, C. and Stanley, T.D. ‘Are all economic facts greatly exaggerated? Theory competition and selectivity’, Journal of Economic Surveys, Vol. 27(2), (2013) pp. 316-339.

Fernandes, A.M., Ferro, E. and Wilson, J.S. ‘Product Standards and Firms’ Export Decisions’, The World Bank Economic Review, (2017) [in press].

Ferro, E., Otsuki, T. and Wilson, J.S. ‘The effect of product standards on agricultural exports’, Food Policy, Vol. 50, (2015) pp. 68-79.

Grant J.H. and Arita S. Sanitary and Phyto-Sanitary Measures: Assessment, Measurement, and Impact. IATRC Commissioned Paper No. (21) 53 pp. 2017. Available at: iatrcweb.org/ (last accessed 1 February 2018).

Gourdon, J. CEPII NTM-MAP: A tool for assessing the economic impact of non-tariff measures, No. 24, (2014).

Harvey, D.R. Agricultural policy reform after the Uruguay Round. In Agriculture in the Uruguay Round, pp. 223-259 (Palgrave Macmillan, London, 1994).

Havránek, T. ‘Rose effect and the euro: is the magic gone?’, Review of World Economics, Vol. 146(2), (2010) pp. 241-261.

Head, K. and Mayer, T. Gravity equations: Workhorse, toolkit, and cookbook. In Handbook of International Economics, Vol. 4, pp.131-195 (Elsevier, 2014).

Hoekman, B. and Nicita, A. ‘Trade policy, trade costs, and developing country trade’ World Development, Vol. 39(12), (2011) pp. 2069-2079.

Hooker, N.H., and Caswell, J.A. ‘A Framework for Evaluating Non‐Tariff Barriers to Trade Related to Sanitary and Phytosanitary Regulation’, Journal of Agricultural Economics, Vol. 50(2), (1999) pp. 234-246.

Jayasinghe, S., Beghin, J.C. and Moschini, G.C. ‘Determinants of world demand for U.S. corn seeds: The role of trade costs’, American Journal of Agricultural Economics, Vol. 92(4), (2010) pp. 999–1010.

Jeppesen, T., List, J.A. and Folmer, H. ‘Environmental regulations and new plant location decisions: evidence from a meta‐analysis’, Journal of Regional Science, Vol. 42(1), (2002) pp. 19-49.

Jongwanich, J. ‘The impact of food safety standards on processed food exports from developing countries’, Food Policy, Vol. 34(5), (2009) pp. 447-457.

Li, Y. and Beghin, J.C. ‘A meta-analysis of estimates of the impact of technical barriers to trade’, Journal of Policy Modeling, Vol. 34(3), (2012) pp. 497-511.

Littell, J.H., Corcoran, J. and Pillai, V. Systematic reviews and meta-analysis (Oxford University Press, 2008).

Melitz, M.J. ‘The impact of trade on intra‐industry reallocations and aggregate industry productivity’, Econometrica, Vol. 71(6), (2003) pp. 1695-1725.

Melo, O., Engler, A., Nahuehual, L., Cofre, G. and Barrena, J. ‘Do sanitary, phytosanitary, and quality-related standards affect international trade? Evidence from Chilean fruit exports’, World Development, Vol. 54, (2014) pp. 350-359.

Olper, A. and Raimondi, V. ‘Explaining national border effects in the QUAD food trade’, Journal of Agricultural Economics, Vol. 59(3), (2008) pp. 436–462.

Otsuki, T., Wilson, J.S. and Sewadeh, M. ‘What price precaution? European harmonization of aflatoxin regulations and African groundnut exports’, European Review of Agricultural Economics, Vol. 28(2), (2001a) pp. 263–283.

Otsuki, T., Wilson, J.S. and Sewadeh, M. ‘Saving two in a billion: quantifying the trade effect of European food safety standards on African exports’, Food policy, Vol. 26(5), (2001b) pp. 495-514.

Peterson, E., Grant, J.H., Roberts, D. and Karov, V. ‘Evaluating the trade restrictiveness of phytosanitary measures on US fresh fruit and vegetable imports’, American Journal of Agricultural Economics, Vol. 95(4), (2013) pp. 842-858.

Rose, A.K. and Stanley, T.D. ‘A Meta‐Analysis of the Effect of Common Currencies on International Trade’, Journal of Economic Surveys, Vol. 19(3), (2005) pp. 347-365.

Salvatici, L., Matthews, A. and Scoppola, M. Trade Impacts of Agricultural Support in the EU. IATRC Commissioned Paper No. (938-2016-74528) 2017. Available at: iatrcweb.org/ (last accessed 1 February 2018).

Santeramo, F.G. and Shabnam, N. ‘The income-elasticity of calories, macro-and micro-nutrients: What is the literature telling us?’, Food Research International, Vol. 76, (2015) pp. 932-937.

Schlueter, S.W., Wieck, C. and Heckelei, T. ‘Regulatory policies in meat trade: is there evidence for least trade-distorting sanitary regulations?’, American Journal of Agricultural Economics, Vol. 91(5), (2009) pp. 1484-1490.

Sheldon, I. ‘Trade and environmental policy: A race to the bottom?’, Journal of Agricultural Economics, Vol. 57(3), (2006) pp. 365-392.

Sheldon, I. ‘North–South trade and standards: what can general equilibrium analysis tell us?’, World Trade Review, Vol. 11(3), (2012) pp. 376-389.

Shepherd, B. and Wilson, N.L. ‘Product standards and developing country agricultural exports: The case of the European Union’, Food Policy, Vol. 42, (2013) pp. 1-10.

Silva, J.S. and Tenreyro, S. ‘The log of gravity’, The Review of Economics and Statistics, Vol. 88(4), (2006) pp. 641-658.

Stanley, T.D. ‘Wheat from chaff: Meta-analysis as quantitative literature review’, The Journal of Economic Perspectives, Vol. 15(3), (2001) pp. 131-150.

Stanley, T.D. ‘Beyond publication bias’, Journal of Economic Surveys, Vol. 19(3), (2005) pp. 309-345.

Stanley, T.D. and Doucouliagos, H. Meta-regression analysis in economics and business. Oxford: Routledge (2012).

Stanley, T.D. and Doucouliagos, H. Meta‐regression approximations to reduce publication selection bias. Research Synthesis Methods, Vol. 5(1), (2014) pp. 60-78.

Stanley, T.D. and Jarrell, S.B. ‘Meta‐Regression analysis: A quantitative method of literature surveys’, Journal of Economic Surveys, Vol. 3(2), (1989) pp. 161-170.

Stanley, T.D., Doucouliagos, C. and Jarrell, S.B. ‘Meta-regression analysis as the socio-economics of economics research’, The Journal of Socio-Economics, Vol. 37(1), (2008) pp. 276-292.

Stanley, T.D., Doucouliagos, H., Giles, M., Heckemeyer, J.H., Johnston, R.J., Laroche, P., Nelson, J.P., Paldam, M., Poot, J., Pugh, G., Rosenberger, R.S. and Rost, K. ‘Meta‐analysis of economics research reporting guidelines’, Journal of Economic Surveys, Vol. 27(2), (2013) pp. 390-394.

Swinnen, J.F. and Vandemoortele, T. ‘Trade and the political economy of food standards’, Journal of Agricultural Economics, Vol. 62(2), (2011) pp. 259-280.

Swinnen, J. ‘Economics and politics of food standards, trade, and development’, Agricultural Economics, Vol. 47(1), (2016) pp. 7-19.

Swinnen, J. ‘Some dynamic aspects of food standards’, American Journal of Agricultural Economics, Vol. 99(2), (2017) pp. 321-338.

UNCTAD International Classification of Non-Tariff measures, February 2012 version (UNCTAD/DITC/TAB/2012/2) (New York, Geneva: United Nations, 2012).

United Nations World Economic Situation and Prospects (New York, 2017).

Vollrath, T.L., Gehlhar, M.J. and Hallahan, C.B. ‘Bilateral import protection, free trade agreements, and other factors influencing trade flows in agriculture and clothing’, Journal of Agricultural Economics, Vol. 60(2), (2009) pp. 298-317.

Wilson, J.S. and Otsuki, T. ‘Food safety and trade: winners and losers in a non-harmonized world’, Journal of Economic Integration, Vol. 18(2), (2003) pp. 266-287.

Wilson, J.S. and Otsuki, T. ‘To spray or not to spray: Pesticides, banana exports, and food safety’, Food Policy, Vol. 29(2), (2004) pp. 131–146.

Xavier, C., Gonzales-Barron, U., Paula, V., Estevinho, L. and Cadavez, V. ‘Meta-analysis of the incidence of foodborne pathogens in Portuguese meats and their products’, Food Research International, Vol. 55, (2014) pp. 311-323.

Xiong, B. and Beghin, J. ‘Does European aflatoxin regulation hurt groundnut exporters from Africa?’, European Review of Agricultural Economics, Vol. 39(4), (2011) pp. 589-609.

Xiong, B. and Beghin, J. ‘Disentangling Demand‐Enhancing and Trade‐Cost Effects of Maximum Residue Regulations’, Economic Inquiry, Vol. 52(3), (2014) pp. 1190-1203.

Yue, C. and Beghin, J.C. ‘Tariff equivalent and forgone trade effects of prohibitive technical barriers to trade’, American Journal of Agricultural Economics, Vol. 91(4), (2009) pp. 930-941