Bilateral trade of cultural goods

International trade flows of cultural goods have grown rapidly over the last decades and their liberalization will be an important issue of future multilateral trade negotiations. In this paper, we focus on bilateral trade in cultural goods and investigate its determinants. Furthermore, we use trade in cultural goods as a proxy for countries’ cultural proximity and study if countries with proximate cultural tastes have more intense bilateral exchanges. Our estimations show a positive and significant influence of cultural flows on overall trade, suggesting that regulations fostering domestic cultural creation might have impacts going beyond what is generally expected.     

New plant engineering techniques,R&D investment and international trade

New plant engineering techniques (NPETs) may significantly improve both production and quality of foods. Some consumers and regulators around the world might be reluctant to accept such products and the global market penetration of these products may remain low. We develop a parsimonious economic model for R&D investment in food innovations to identify conditions under which NPET technology emerges in the context of international trade. The framework integrates consumers' willingness to pay (WTP) for the new food, the uncertainty of R&D processes, the associated regulatory cost of approval, and the competition between domestic and foreign products. With generic applicability, the model enables the quantitative analysis of new foods that could be introduced in markets and then traded across borders. We apply the framework to a hypothetical case of apples improved with NPETs. Simulation results suggest that import bans and high values of sunk cost can reduce R&D investment in NPETs to suboptimal levels.     

Do standards improve the quality of traded products?

We examine whether standards raise the quality of traded products. Matching a panel of French firm–product–destination export data with a data set on sanitary and phytosanitary measures and technical barriers to trade, we find that such quality standards enforced on products by destination countries: (i) favour the export probability of high-quality firms provided that their productivity is high enough, (ii) raise the export sales of high-productivity, high-quality firms at the expense of low-productivity and low-quality firms and (iii) increase the quality supplied by firms if their productivity is high enough. We then develop a simple new trade model under uncertainty about product quality in which heterogeneous firms can strategically invest in quality signalling to rationalize these empirical results on quality and selection effects.     

Trade impact of European measures on GMOs condemned by the WTO panel

In May 2003, the United States, Canada and Argentina launched a World Trade Organization (WTO) case against the European Union concerning its authorization regime for genetically modified organisms (GMOs). The complainants challenged three types of measures: (i) an alleged general moratorium on the approval of GMOs; (ii) delays in the processing of product-specific applications; (iii) national safeguard measures adopted by certain Member States banning the marketing of certain genetically modified products. In November 2006, the WTO condemned the European regime. Using the most recent advances in gravity equation, we estimate the reduction in exports of potentially affected products from the complainants to the European Union. Export losses are calculated by product, complainant country and measure at stake. Our results tend to confirm the foundations of the dispute: the European moratorium and product-specific measures have a negative effect on trade, as do safeguard measures adopted by Germany, Italy and Greece.     

Taxes,minimum-quality standards and/or product labeling to improve environmental quality and welfare: Experiments can provide answers

This study focuses on the welfare impact of taxes, minimum-quality standards, and/or product labeling. A theoretical framework shows that the combination of a label and a per-unit tax is socially optimal. Alternatively, if the label is unavailable, the theory cannot directly conclude which instrument should be socially preferred. Estimations of willingness-to-pay (WTP) are useful for completing the theoretical analysis and evaluating policies ex ante on case-by-case basis. Using hypothetical WTP for shrimp, we confirm that the combination of a label and a tax is socially optimal. In the absence of a label, simulations show that a minimum-quality standard leads to a higher welfare compared to a tax.