The Trade-Enhancing Effects of Non-Tariff Measures on Virgin Olive Oil

Ronen, Eyal (2017): The Trade-Enhancing Effects of Non-Tariff Measures on Virgin Olive Oil. Published in: International Journal of Food and Agricultural Economics , Vol. 5, No. 3 (July 2017): pp. 9-26.

Abstract

Over the last 15 years, the global trade of virgin olive oil (VOO) seems to face a stringent regulatory regime, mainly through the imposition of TBT and SPS measures. Such a development should have adversely impacted global levels of VOO trade. However, evidence shows that the world's imports of VOO have more than quadrupled in value since 2000. Alongside this trend, the share of VOO imports gradually shifts from traditional sources (mainly EU) to New World producing countries, such as Argentina, Australia, the USA, and Chile. By extracting data from hundreds of NTM regulations, as well as all possible registered bilateral trade flows between 2002 to 2014, this paper aims to empirically explore to what extent particular NTMs impact imports of VOO. The results indicate that while tariffs remain a stringent barrier, most NTMs have a positive impact on imports, rather than enhancing restrictiveness. The paper asserts that the majority of NTMs respond to consumers' demand for higher food safety standards and protection of human health, while increasing available information and transparency. That, in turn, leads to an expansion in the magnitude of imports of VOO products.

• Item Type: MPRA Paper
• Language: English
• Keywords: Non-Tariff Measures, Sanitary and phytosanitary, Technical Barriers to Trade, Virgin Olive Oil
• 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. M., and Caswell J. A. (2009). Standards-as-Barriers versus Standards-as-Catalysts: Assessing the Impact of HACCP Implementation on U.S. Seafood Imports. American Journal of Agricultural Economics, 91(2): 310-321.

Chen, M.X., T. Otsuki, J.S. Wilson (2006). Do Standards Matter for Export Success?. Policy Re- search Working Papers, No. 3809, World Bank, Washington, DC.

Chevassus-Lozza E., Latouche K., Majkovic D. & Unguru M. (2008). 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. 33(6):595-606.

Cicia G., Del Giudice T., Scarpa R. (2005). Welfare Loss due to Lack of Traceability in Extra- virgin Olive Oil: a Case Study. Cahiers Options Mediterranennes, 64: 19-32

Combris P., Seabra P.A., Fragata A. & Giraud-Heraud, E. (2010). Does Taste Beat Food Safety? Evidence from the ”Pera Rocha” Case in Portugal. Journal of Food Products Marketing, 16: 60-78.

Dekhili S., d’Hauteville F. (2009). Effect of the Region of Origin on the Perceived Quality of Olive Oil : An Experimental Approach Using a Control Group. Food Qual Preference, 20(7): 525-532.

Dekhili S., Sirieix L., & Cohen E. (2011). How Consumers Choose Olive Oil: The Importance of Origin Cues. Food Quality and Preference, 22(8): 757-762.

Del Giudice T., Cavallo C., Caracciolo F., & Cicia G. (2015). What attributes of extra virgin olive oil are really important for consumers: a meta-analysis of consumers stated preferences. Agricultural and Food Economics, 3(20): 1-15.

Disdier A.C., Fontagne L. & Mimouni M. (2008). The Impact of Regulations on Agricultural Trade: Evidence from the SPS and TBT Agreements. American Journal of Agricultural Eco- nomics, 90(2): 336-350.

Disdier A. C., Head K. (2008). The Puzzling Persistence of the Distance Effect on Bilateral Trade. The Review of Economics and Statistics 90(1): 37-48.

Drogue, S., DeMaria, F. (2012). Pesticide residues and trade, the apple of discord? Food Policy, 37(6): 641-649.

FAO (2017). Food and Agriculture Organization FAOSTAT online statistical service. Rome: FAO- http://faostat.fao.org/

Fontagne L., Orefice G. , Piermartini R. & Rocha N. (2013). Product Standards and Margins of Trade: Firm-level Evidence. CEPII Working Paper, Paris: CEPII.

Gruebler, J., Ghodsi, M., & Stehrer, R. (2016). Assessing the Impact of Non-Tariff Measures on Imports.

Gil J.M., Soler, F. (2006). Knowledge and Willingness to Pay for Organic Food in Spain: Evidence From Experimental Auctions. Food Economics - Acta Agriculturae Scandinavica, Section C, 3(3- 4): 109-124.

Gourdon J., Nicita A. (2012). NTMs: Interpreting the New Data: Non-Tariff Measures - A Fresh Look at Trade Policys New Frontier. edited by Cadot et. al. CEPR and the World Bank.

Grant J. H., Boys K. A. (2012). Agricultural Trade and the GATT/WTO: Does Membership Make a Difference?. American Journal of Agricultural Economics, 94(1): 1-24.

Guimaraes M. H. (2012). Non-Tariff Measures in the European Union: Evidence from the Agri- Food Sector. Agricultural Economics Review, 13.

Haq Z.U., Meilke, K. & Cranfield, J. (2013). Selection Bias in a Gravity Model of Agri-food Trade. European Review of Agricultural Economics, 40(2): 331-360.

Henson S.J., Jaffee S. (2008). Understanding Developing Country Strategic Responses to the Enhancement of Food Safety Standards. The World Economy, 31(4): 548-568.

International Olive Council. (IOC), Data on Production & Consumption from Nov. 2016.

Josling T., Roberts D., Orden D. (2004). Food Regulation and Trade. Toward a Safe and Open Global System. Institute for International Economics. Journal of International Economic Law, 8(3): 793-802.

Kavallari A., Maas S. & Schmitz P. M. (2011). Examining the Determinants of Olive Oil Demand in Nonproducing Countries: Evidence from Germany and the UK. Journal of Food Products Marketing, 17: 355-372.

Krystallis A., Ness M. (2005). Consumer Preferences for Quality Foods from a South European Perspective: A Conjoint Analysis Implementation on Greek Olive Oil. Int Food Agribusiness Man- age Rev 8(2): 62-91

Liu, L., Yue, C. (2012), Investigating the Impact of SPS Standards on Trade Using a VES Model. European Review of Agricultural Economics, 39(3): 511-528.

Martin W., Pham C.S. (2008). Estimating the Gravity Equation When Zero Trade Flows are Frequent. MPRA Working Paper 9453, University Library of Munich

Mayer T., Zignago S. (2011), Notes on CEPIIs distances measures: The GeoDist database. CEPII Working Paper 2011-25, CEPII.

Menapace L., Colson G., Grebitus C. & Facendola M. (2011). Consumers’ Preferences for Geographical Origin Labels: Evidence from the Canadian Olive Oil Market. European Review of Agricultural Economics, 38: 193-212.

Michalek J.J., Hagemejer J., Roshal V., Rothert J., Tovias A., Pugacewicz A., & Vancauteren M. (2005). Comparative Analysis of Importance of Technical Barriers to Trade (TBT) for Central and Eastern European Countries and Mediterranean Partner Countries Exports to the EU. FEMISE Research Paper, No. FEM 22- 03, Warsaw University, Warsaw.

Otsuki T., Wilson J. S., & Sewadeh M. (2001). What Price Precaution? European Harmonisation of Aflatoxin Regulations and African Groundnut Exports. European Review of Agricultural Economics, 28(3): 263-284.

Sandalidou E., Baourakis G. & Siskos Y. (2002). Customers Perspectives on the Quality of Organic Olive Oil in Greece-A Satisfaction Evaluation Approach. British Food Journal, 104: 391-406.

Silva J.M.C.S, Tenreyro S. (2006). The Log of Gravity. The Review of Economics and Statistics, 88(4): 641-58

Staiger R. W. (2012). Non-tariff measures and the WTO. Geneva, WTO, Working Paper ERSD. TTBD: The World Bank Trade Barriers Database.

Swann G. P. (2010). International Standards and Trade: A Review of the Empirical Literature. OECD Trade Policy Papers, No. 97, OECD Publishing.

Swinnen J.F.M.,Vandemoortele T. (2011). Trade and the Political Economy of Food Standards. Journal of Agricultural Economics, 62(2): 259-280.

Thilmany D., and Barrett C. (1997). Regulatory Barriers in an Integrating World Food Market. Review of Agricultural Economics, 19: 91-107.

UNCTAD (2013). Non-Tariff Measure to Trade: Economic and Policy Issues for Developing Countries. (UNCTAD/DITC/TAB/2012/1). New York and Geneva. United Nations Publications, ISSN 1817-1214.

USITC (2013). Olive Oil: Conditions of Competition between US and Major Foreign Supplier Industries. Investigation No. 332-537, USITC Publication 4419.

Winchester N., Rau M.L., Goetz C., Larue B., Otsuki T., Shutes K., Wieck C., Burnquist H.L., Pinto de Souza M.J. & Nunes de Faria R. (2012). The Impact of Regulatory Heterogeneity on Agri-food Trade. The World Economy, 35(8): 973-93.

World Trade Organization (2012). Trade and Public Policies: A Closer Look at Non-Tariff Measures in the 21st Century. Geneva: WTO.

World Trade Organization (2013). Tariff Download Facility: http://tariffdata.wto.org/

Xiong B., Beghin J.C. (2012). Does European Aflatoxin Regulation Hurt Groundnut Exporters from Africa?. European Review of Agricultural Economics, 39(4): 589-609.

Xiong B., Beghin J.C. (2014). Disentangling Demand-Enhancing and Trade-Cost Effects of Max- imum Residue Regulations. Economic Inquiry, 52(3): 1190-1203.