Do different regulations in maximum residue levels of pesticides affect trade competitiveness? The case of apples and pears
2010
Drogue, Sophie | DeMaria, Federica
How food safety standards affect international trade has already been adressed. Generally, economists try to assess trade losses borne by exporters when importing countries impose stricter regulations. In this paper we assess the impact of the Maximum Residue Levels (MRL)of pesticides on trade of apples and pears. We do not focus on a particular pesticide but take into account the entire list of substances set out by the various regulations. The aim is to understand how the similarity (or dissimilarity) in regulations can affect trade. Indeed, moststudies examine the regulations put in force in the importing country. We assume that what can be crucial is the difference in the tolerance level of both the importing and exporting country. We build an indexof similarity and introduce it in a gravity equation to assess the impact of differences in MRL of pesticides on trade of apples and pears of seven exporting and seven importing countries. Results suggest that harmonizing regulations could enhance trade.
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