High animal welfare standards in the EU and international trade – How to prevent potential ‘low animal welfare havens’?

Future costs of compliance with obligatory animal welfare standards in the EU for poultry and egg production are significant and may lead to relocation of production to third countries. After an overview of different rationales for complementary policies to prevent relocation, this article systematically compares such policies. Some policies, like multilateral agreements and labelling, may be supporting, but may not be able to prevent relocation comprehensively. Compensatory payments to domestic producers, in contrast, are effective but disadvantage third country producers that comply with equivalent standards. Therefore, tariff discrimination may be a better alternative. A major drawback of tariff discrimination, however, is its severe institutional requirements. Future research questions include quantification of potential relocation as well as transaction costs of various complementary policies.