WTO’s Disputes on ‘Shrimps’ and ‘Tuna’ and Its Implication on Sustainability: Settlement and Its Impact on Exports from Developing Countries

Abstract

Export restrictions have been widely used by many countries in recent pasts to protect their domestic industries. In this paper, we estimated the short-run and long-run elasticity of the shrimps and tuna exports using the techniques of co-integration and error correction. We have also checked for structural breaks in the data to analyse the impact of ban periods. The models estimated for shrimps and tuna exports using annual data for the period 1975 to 2013.

The results obtained provide evidence of a long-run equilibrium relationship between the shrimp’s exports and its principal determinants, but in the case of tuna exports, there is no such existing equilibrium relationship. The error correction predicts that importing country’s GDP has more impact on exports as compared to relative prices in the long run. In the short-run, both the variables are together causing the exports of shrimps.

The ‘structural break analysis’ through the Chow test shows that there is no break found in the shrimp’s exports data as there is an increasing demand for the period 1975 to 2013. For the tuna exports data, we have seen a structural breakpoint in the year 1991. We have corrected the problem of the ‘structural break’ by introducing a dummy variable in the data and found the significant results.

Our results suggest that there are different impacts of the ban imposed on both the products. Since the demands of shrimps in the US markets have followed an increasing trend without any significant break even in the ban period, so we conclude a negligible impact of the ban on exports of shrimps from the four developing nations. The declined Mexican exports of tuna to the US markets show the drastic effects of the ban.

Keywords: Fisheries, WTO, DSU, Sustainbility, India

JEL Classification: F1, Q2