Something Fishy in Seafood Trade? The Relation between Tariff and Non-Tariff Barriers
New research published in the AJAE
New research finds when trade agreements generate a decrease in tariffs, it is observed to increase the number of import notifications, holding trade volume constant. This effect is strongest for those products that are rejected at the border for less threatening health reasons. While there is clear evidence that import notifications are responding to health risks, they also appear to be correlated with demand for protection.
In the new article “Something Fishy in Seafood Trade? The Relation between Tariff and Non-Tariff Barriers,” Kathy Baylis from the Unviersity of California Santa Barbara, Lia Nogueira from the University of Nebraska, Linlin Fan from Pennsylvania State University, and Kathryn Pace from Columbia University, ask whether non-tariff measures increase as rates fall.
Nogueira says, “WTO requirements are set in place to ensure sanitary and phytosanitary (SPS) standards are only used for scientifically-backed health and safety protection but do not appear to be working as intended. The results for this article show that the implementation of standards may be used directly for protectionist purposes. Policy makers should take the flexibility in standard implementation into consideration when designing trade rules. As they stand, rules for implementation of SPS standards are not strong enough to prevent intentional use of non-tariff measures. With limited inspection budgets, the consumer welfare gains could conceivably be improved at the margin by taking efforts currently directed to those imports that threaten domestic production and moving them to target a few more risky products.”
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