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Something Fishy in Seafood Trade? The Relationship between Tariff and Non-Tariff Barriers

Kathy Baylis, University of Illinois at Urbana-Champaign
Lia Nogueira, University of Illinois at Urbana-Champaign
Kathryn Pace, University of Illinois at Urbana-Champaign

Abstract

As importing countries honor WTO commitments and lower tariff rates, they may be replacing traditional tariff barriers with non-tariff barriers. Recent literature has found that the implementation of food safety standards, specifically the use of import notifications and rejections, has acted as a significant barrier to trade in both the EU and the US. This article estimates the relation between declining tariff rates and the use of non-tariff barriers, measured by a count of EU seafood import notifications. We divide the motives for the use of import notifications into risk and protectionism. The results show that while non-tariff barriers are driven in part by variables associated with risk, they are also correlated with variables associated with increased demand for protection. We find that when trade agreements force a decrease in tariffs, we observe an increase in the number of import notifications, holding trade constant. This effect is strongest for those products that are rejected at the border for less threatening health reasons. When we calculate the effect on trade, we find that these non-tariff barriers offset nearly one quarter of the gains in trade from tariff reductions.

Suggested Citation

Kathy Baylis, Lia Nogueira, and Kathryn Pace. 2012. "Something Fishy in Seafood Trade? The Relationship between Tariff and Non-Tariff Barriers" The SelectedWorks of Kathy Baylis
Available at: http://works.bepress.com/kathy_baylis/34