The (lack of) international harmonization of EU standards: import and export effects in developed versus developing countries

ABSTRACT

This article studies the effect of the lack of international harmonization in agri-food standards on international trade flows focusing on the European Union (EU). The EU is characterized by high level of protectionism, which makes it an ideal case study. We measure the differences in countries’ level of ‘protectionism’ by applying an index of aggregation of non-tariff measures to data on maximum residue levels on pesticides and veterinary drugs allowed by countries on agri-food products. The restrictiveness of countries standards’ is compared with the one imposed by the Codex Alimentarius, which is considered as non-protectionist. The EU emerges as the most rigorous standards setter. The higher standards imposed by the EU affect in particular imports from developing countries, while it facilitates its exports, irrespective of the level of development and standard restrictiveness set by the importing countries.

KEYWORDS:

• Agri-food standards
• maximum residue levels (MRLs)
• EU agri-food trade
• harmonization

JEL CLASSIFICATION:

• F13
• F14
• Q17
• Q18

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Considering, for instance, the case of Sanitary and Phitosanitary measures, Fontagné et al. (2015) show that, within the WTO members, the highest number of specific trade concerns is raised against the EU. Specific trade concerns are raised at the WTO by countries towards other countries on one or more measures maintained on one or more products, which they consider to be trade restrictive.

² Most of the published papers assessing the role of food standards in shaping international trade focus on some specific products or countries. For instance, Drogué and Demaria (2012) studied the case of trade in apples and pears; Melo et al. (2014) consider the case of Chilean fruit exports, while Scheepers, Jooste, and Alemu (2007) focus on avocado exports from South Africa to the EU. Other papers consider all the products and substances available in the MRL database, but focus on different countries than the EU. Xiong and Beghin (2013) focus on the US and Canada, while Xiong and Beghin (2014) consider the case of OECD countries’ imports from their major trade partners.

³ MRLs have different scales, which could vary from 0.01 ppm to 10 ppm or more. The lower the MRL value, the stricter the standard.

⁴ For further details on data characteristics and shortcomings, as well as on the index properties, see Li and Beghin (2014).

⁵ By including EU as a single country, we do not include other typical gravity variables (e.g. bilateral distance and other bilateral trade costs), as country and sectoral fixed effects already account for them.

⁶ Note that the OECD group of countries includes all OECD members with the exception of EU countries.