Stringent maximum residue limits, protectionism, and competitiveness: The cases of the US and Canada

Bo Xiong, John C. Beghin

Research output: Chapter in Book/Report/Conference proceedingChapter

7 Scopus citations

Abstract

Maximum residue limits (MRLs) on pesticides and veterinary drugs in plant and animal products are established to promote food safety and animal and plant health. In practice, however, they are often accused of creating unnecessary trade barriers. The controversy is more prominent when a given MRL is stricter than the corresponding international standard developed by Codex. Using the score indices constructed by Li and Beghin (2012), we empirically assess the implications of stringency in MRLs in plant and animal products, relative to Codex levels, for Canadian and US trade performance. We find little evidence that US imports are influenced by domestic stringency or those imposed by its trading partners. However, US exports are negatively affected by stringency in destination markets. Canada's stringent MRLs facilitate its exports of plant and animal products and these exports do not seem to be impeded by MRL stringency in destination markets. Canada's imports do not appear to be systematically influenced by either its own or its trading partners' MRL stringency. We draw implications for the potential harmonization of MRLs between the two countries.

Original languageEnglish (US)
Title of host publicationNonTariff Measures with Market Imperfections
Subtitle of host publicationTrade and Welfare Implications
PublisherEmerald Group Publishing Ltd.
Pages245-259
Number of pages15
ISBN (Print)9781781907542
DOIs
StatePublished - 2013
Externally publishedYes

Publication series

NameFrontiers of Economics and Globalization
Volume12
ISSN (Print)1574-8715

Keywords

  • Canada
  • Competitiveness
  • Gravity
  • MRL
  • Maximumresidue limit
  • Nontariff barriers
  • Nontariff measures
  • Protectionism
  • Standard
  • US

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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