NON-TARIFF MEASURES AND TRADE FLOWS: THE CASE OF EU AGRI-FOOD STANDARDS

Trade may increase or decrease by imposing food standards. Thus there is not yet a clear trend whether the standards promote or hinder trade. From political point of view, a standard is considered as trade protectionist tool, which in agricultural trade takes the form of the so-called non-tariff measure (NTMs) including the Maximum Residue Levels (MRLs), which is in the focus of this research work. The objective of this work is to quantify the protectionism of MRLs standards relative to the stringency of international standards of Codex Alimentarius and to give insights on the effects of European MRL standards on trade versus US and other countries. The empirical approach of gravity model is used to explain international trade flows. For the quantification of the protectionism we implement the aggregation index of NTMs established by Li and Beghin (2014). An importer’s MRL is defined as protectionist when the stringency of MRL standards exceeds the levels of Codex’s MRL. In our research work, the country-level results show that Europe has more protectionist food standards, compared to US.