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Measuring Costs and Benefits of Non-Tariff Measures in Agri-Food Trade

32 Pages Posted: 25 Jan 2011  

John Beghin

Iowa State University - Department of Economics

Anne-Celia Disdier

National Institute for Agricultural Research (INRA) - UMR Economie Publique

Stéphan Marette

National Institute for Agricultural Research (INRA) - ESR

Frank van Tongeren

Organization for Economic Co-Operation and Development (OECD)

Date Written: January 24, 2011

Abstract

This paper provides a systematic welfare-based approach to analyze the impact of non-tariff measures (NTMs) on trade and welfare in presence of market imperfections. We focus 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 forgone trade caused by trade costs. The latter ignores market imperfections: welfare increases when NTMs are removed 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. We show that the relationship between trade, welfare, and NTMs is complex. The optimum NTM is often not zero. 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.

Keywords: Non-tariff measures, externality, trade, welfare, NTM

JEL Classification: F13, D61, D62, Q17

Suggested Citation

Beghin, John and Disdier, Anne-Celia and Marette, Stéphan and van Tongeren, Frank, Measuring Costs and Benefits of Non-Tariff Measures in Agri-Food Trade (January 24, 2011). Available at SSRN: https://ssrn.com/abstract=1747107 or http://dx.doi.org/10.2139/ssrn.1747107

John Beghin

Iowa State University - Department of Economics ( email )

383 Heady Hall
Ames, IA 50011
United States

Anne-Celia Disdier

National Institute for Agricultural Research (INRA) - UMR Economie Publique ( email )

Centre de Grignon
BP01
Thiverval-Grignon, 78850
France

Stéphan Marette

National Institute for Agricultural Research (INRA) - ESR ( email )

Univeriste des Sciences Sociales
21, Allee de Brienne
Toulouse 31000
France

Frank Van Tongeren (Contact Author)

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

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