Country‐Specific Determinants of Horizontal and Vertical Intra‐industry Agri‐food Trade: The Case of the EU New Member States

Intra‐industry trade (IIT) has become a widespread phenomenon with a growing role in international trade, though agricultural trade is usually neglected in empirical works. This article identifies the determinants of horizontal and vertical intra‐industry agri‐food trade between New Member States (NMS) and the EU‐27 in 1999–2010, by applying static and dynamic models with different specifications to panel data. Results show that IIT is mainly of a vertical nature in the NMS, though the majority of NMS export low quality agri‐food products to EU‐27 markets. Factor endowments are negatively related to agri‐food horizontal intra‐industry trade (HIIT), but positively to vertical intra‐industry trade (VIIT). Economic size is positively and significantly related to both types of IIT, while distance and IIT are found to be negatively related in both cases. Results also suggest that HIIT and VIIT are greater if a New Member State exports agri‐food products to another NMS while EU accession has had positive and significant impacts on both HIIT and VIIT, suggesting that economic integration fosters IIT.     

Developments in the Doha Round and WTO dispute settlement: some implications for EU agricultural policy

Progress in the Doha Round is assessed against the changes tothe common agricultural policy (CAP) brought about by the Fischlerreforms of 2003–2004, and that proposed for sugar. Anelimination of export subsidies could place EU exports of processedfoods at a competitive disadvantage because of high sugar andmilk prices. Provided the single payment scheme falls withinthe green box, the likely new limits on domestic support shouldnot be problematic for the post-Fischler CAP. However, an ambitiousmarket access package could open up EU markets and bring pressurefor further reform. If there is no Doha agreement, existingprovisions will continue to apply, but without the protectionof the Peace Clause; and increased litigation is likely. FurtherCAP reform is to be expected.     

Melitz Meets Milk: The Impact of Quota Abolition on EU Dairy Export Competitiveness

Previous studies of EU milk quota abolition usually assume perfect competition (PC) in the dairy industry, despite evidence to the contrary. We use a global computable general equilibrium framework with an imperfectly competitive (IC) model variant, which offers insights into structural change (i.e. scale of output, firm entry/exit) and varietal diversity in the dairy industry. A heterogeneous‐firm Melitz extension enriches our analysis by endogenising the decision‐making process of domestic firms when exporting (or not) to specific foreign markets. The results from a PC CGE model variant are found to be consistent with respected market outlooks and official data. Furthermore, PC and IC variants generate broadly similar trends – a result corroborated in a previous study of Italian dairy firms. Our IC model prediction of a ‘shakeout’ among EU dairy firms is tentatively supported by actual observations. Finally, as an industry characterised by significant product innovation, increased extra‐EU export orientation by remaining dairy firms increases varietal choice, which further boosts EU dairy exports compared with the PC model variant.     

The impact of EU trade preferences on the extensive and intensive margins of agricultural and food products

In this article, we study the trade creation effects of EU preferential trade agreements (PTAs) in the agriculture and food sectors for a large sample of developing countries in the period 1990–2006. We investigate the extent to which the PTAs affect trade through the extensive margin—number of exported products—or the intensive margin—volume of existing products. We use a gravity framework in a panel data setting, and different estimators to deal with the issues of zero trade flows and the presence of an upper bound in the dependent variable. The results show that EU PTAs positively affect the extensive margin in agricultural trade, but not in processed foods. As regards the intensive margin, the effect is driven by the role of tariffs alone, whereas the other provisions of PTAs do not exert any other significant impact on agricultural or food products.     

The Size of Terroir: A Theoretical Note on Economics and Politics of Geographical Indications

Geographical indications (GI) certify the geographical origins of a product and delineate the specific area in which the certified product must be produced. Despite a large literature on the economics of GIs, few papers have explored the question of the optimal size of GI regions. This note presents a flexible conceptual framework to explore the economics and politics of the delimitation of a GI. The general framework describes the efficiency and distributional effects of the size of a GI and shows how this affects interest groups’ incentives to influence government decision‐making.     

Quality Upgrades of EU Agri‐Food Exports

We investigate determinants of quality upgrades in EU agri‐food exports using panel data models for the period 2000–2011. By employing highly disaggregated data we show that the unit value of exports is positively correlated to level of economic development and size of population. Our results highlight the negative impacts of comparative advantage and trade costs on upgrades in export quality. Our analysis partly confirms the role of income distribution in quality specialisation, that greater income inequality increases specialisation in quality upgrades. Findings are robust when applied to alternative subsamples, including vertically specialised and final agri‐food products.     

The War on Terroir: Geographical Indications as a Transatlantic Trade Conflict

Terroir, the concept of an essential link between location of production and a specific quality attribute, is emerging as a contentious issue in trade negotiations and disputes. This issue is manifest through disputes and disagreements about appropriate protection of ‘geographical indications’ (GIs). This paper explores the differences in approach taken by the EU and the US towards GI protection, and illustrates the nature of the legal and economic arguments. The transatlantic dispute is spreading to other countries through the inclusion of GI protection in regional and bilateral trade pacts. It also has implications for the eventual conclusion of the WTO Doha Round negotiations, as the terroir issue arises in both the agricultural and the Trade‐Related Intellectual Property (TRIPS) agendas, once again pitting the US and EU as protagonists. But there are signs of change in these positions as the GI system in the EU comes under review and producers in the US reconsider the possible advantages of location‐based identifiers. These issues are important in a number of food sectors, and are likely to be persistent. They deserve more attention from practising applied economists than they have yet received.     

The Heterogeneous Effects of Standards on Agricultural Trade Flows

This article uses a theory‐based translog gravity model to investigate the heterogeneous effects of food standards on aggregate agricultural trade. We revisit the ‘standards‐as‐barriers‐to‐trade’ debate with a distinctive twist. In contrast to existing works, we show that standards reduce trade but even more so for countries that trade smaller volumes. Our identification strategy exploits the within‐country variation in specific trade concerns. We confirm that stricter importer standards are indeed trade‐restrictive. However, the estimated trade cost elasticity varies depending on how intensively two countries trade. Specifically, it decreases in magnitude with an increasing import share of the exporter in the importing country's total imports. The reason is simple but intuitive; bigger trading partners find it more profitable to invest in meeting the costs of importer‐specific standards. This work is novel in showing that the standards–trade debate misses out on an important heterogeneity driven by existing import shares. Liberalising non‐tariff measures will favour smaller trading partners more than well‐established ones.     

Non‐Reciprocal Trade Preferences and the Role of Compliance Costs in the Agricultural Sector: Exports to the EU

We investigate whether non‐reciprocal preferential regimes granted by the European Union have an impact on agricultural export flows from beneficiary countries while accounting for the costs of compliance that may prevent exporters from taking full advantage of potential benefits. Compliance costs are heterogeneous and difficult to measure. We proxy their influence and specify a model that allows for a different preferential margin impact according to the proxy costs. Adopting the gravity framework and using a sample of 554 lines of agricultural products for 131 developing countries in 2002, we find that the costs of compliance play a role in making the schemes work: the lower the costs, the greater the impact of the preferential margins. Moreover, the estimated margin effect differs between different regimes.     

Global investments in agricultural land and the role of the EU: Drivers,scope and potential impacts

This paper investigates the recent wave of investments in agricultural land, often referred to as land grabbing; a term that not only emphasises the appropriation of resources by investors but also implies a criticism of their potential impacts on livelihoods and ecosystems in the target countries. This phenomenon has increasingly been the focus of public attention as well as a source of concern for NGOs, international institutions, academia and civil society. More specifically, this study investigates the role that the European Union member states play, both collectively and individually, in this wave of acquisitions in agricultural land, by providing a comprehensive overview of the drivers, scope and potential impacts of these land deals.     

人民币实际有效汇率变动对我国木质家具出口贸易影响

汇率是一个国家进行国际经济活动时最重要的综合性价格指标。在经济全球化这一新形势下,出口贸易作为带动经济增长、合理配置资源、引进先进技术和设备及经营理念的有效手段,对促进我国经济迅猛发展具有重要作用。基于迅速发展的我国木质家具出口贸易,汇率变动对其影响越发显著,因此认清这一影响以规避汇率风险则势在必行。     

EU Requirements for Food Safety and Quality Systems in Turkey: Determinants of Perceptions

Abstract

The European Union (EU) is one of Turkey’s most important trade partners. A large number of Turkish agri-food processors, however, are still unable to produce in accordance with the EU specifications. Furthermore, it is uncertain how Turkish food producers perceive the EU regulations. Based on a questionnaire survey of 99 Turkish agri-food enterprises from various industry subsectors and a conceptual framework including knowledge, personal and economic perspectives, this article assesses perceptions of the EU requirements regarding food safety and quality systems in the Turkish agri-food industry. The results indicate that those perceptions vary widely among the processors depending on education level, firm size, and legal form of ownership. Moreover, subjective information related to the perceptions regarding advantages, requirements, and costs of food safety and quality practices significantly contributes to the perceptions examined. The findings have manifold implications which should be taken into account when adapting Turkish legislation to reflect EU regulations.     

The effects of EU agricultural policy changes on farmers' risk attitudes

This analysis utilises a model of production under risk estimatedon Finnish farm-level data to measure farmers' risk attitudesin a changing policy environment. We find evidence of heterogeneousrisk preferences among farmers, as well as notable changes overtime in farmers' degree of risk aversion. This result is dueto the increase in the non-random part of farm income generatedby the policy change after Finland's European Union accession.The analysis confirms the assertion that agricultural policiesthat are decoupled from production do affect input use and cropmix through their effect on farmers' risk attitudes.     

Innovation and Trade with Endogenous Market Failure: The Case of Genetically Modified Products

A partial-equilibrium, two-country model is developed to analyze implications from the introduction of genetically modified (GM) products. In the model, innovators hold proprietary rights, farmers are (competitive) adopters, some consumers deem GM food to be inferior in quality to traditional food, and the mere introduction of GM crops affects the costs of non-GM food (because of costly identity preservation). Among the results derived, it is shown that, although GM innovations have the potential to improve efficiency, some groups can be made worse off. Indeed, it is even possible that the costs induced by GM innovations outweigh the efficiency gains.     

人民币汇率变动对我国木质家具出口贸易的影响及应对措施

目前人民币汇率的浮动弹性在逐渐扩大,而汇率波动对我国出口贸易的影响也在逐渐加深。我国是世界第一大家具出口国,研究人民币汇率变动对我国木质家具出口贸易的影响意义深远。在分析人民币汇率变动对木质家具出口贸易影响的基础上,提出了我国木质家具产业的应对措施。     

Unconstrained trade: The impact of EU cage bans on exports of poultry-keeping equipment

This study evaluates the impact of conventional cage bans for laying hens in the EU on exports of poultry-keeping equipment. Using detailed data on international trade in poultry-keeping equipment combined with an event study regression approach yields several new findings. The results suggest that the cage bans were associated with an increase in intra-EU trade, and also an increase in exports of poultry equipment from EU member states to non-EU countries where conventional cages are still permitted. The results suggest that some banned cages were likely exported to countries outside the EU to be used in egg production.     

The Benefits of Farm Animal Welfare Legislation: The Case of the EU Broiler Directive and Truthful Reporting

The EU Broiler Directive came into force in the UK in June 2010 with the aim of setting new minimum standards, monitoring broiler welfare and addressing any welfare problems. A survey questionnaire was used to elicit information from a stratified sample of citizens in England and Wales regarding their willingness to pay for the provisions of the Directive, as an estimate of the consumer surplus associated with the legislation. We also explore the usefulness of Prelec's ( 2004 ) Bayesian Truth Serum (BTS) in promoting respondents’ truthful reporting. A median willingness to pay of £21.50 per household per year (corrected for sample bias and possible ‘yea saying’) was estimated from 665 responses. This provides an estimated benefit of the legislation to citizens of over £503 million per year, equivalent to 5.3% of current consumer expenditure on chicken. This compares to an estimated £22 million per year cost of producers’ compliance and government enforcement associated with the legislation. No statistically significant differences in responses between respondents that did and did not have a BTS incentive to answer questions truthfully were found, which might reflect apparently truthful answers in this case, an insufficiently strong financial incentive or a weakened effect due to an element of disbelief in the BTS amongst the sample. The analysis suggests that the benefits of the Broiler Directive to citizens greatly outweigh the additional costs to producers, making a case for the legislation to be retained.     

Patterns of world wheat trade, 1945–2010: The long hangover from the second food regime

Food regime analysis is concerned with interpreting possibilities and conflicts inherent to the 21st‐century food system in historical terms. This paper summarizes the theoretical discussion of the food regime method, and of the identification of different “food regime periods” throughout modern history. While it is widely accepted that the so‐called “second food regime” has already ended, there is much discussion on whether or not it is possible to talk about a more recent third food regime. This paper traces the evolution of the “wheat complex” over the “second food regime” (1947–1973) and over the next 45 years, and offers an explanation for the evolution of world wheat trade distribution, based on food regime analysis. Certain authors have claimed that the collapse of the WTO Doha round of negotiations may be understood as a “hangover” from the second food regime. Similarly, this paper argues that the increasing wheat dependence of poor and insecure countries over the past 40 years may be considered as a path dependence outcome of a process initiated during the second food regime.