Three essays on technical non-tariff measures in developed countries and African countries' international trade in agricultural products

Authors: Traore, Ousmane Z.
Advisor: Tamini, Lota Dabio
Abstract: The objective of this thesis is to analysis the economic implications of technical non-tariff measures (TNTMs) in force in developed countries on the international trade of agricultural and agri-food products of African countries. More specifically, we focus on three main issues. The first more general question is: what is and what determines the net effect of the set of TNTMs in OECD countries on African exports of plant products ? The second, more specific, question is: what are the effects of compliance with maximum residue limit (MRL) for pesticide on production, export supply and import demand ? Finally, the third question is to determine: what is the direct impact of product rejections at the border of European countries of the Rapid Alert System for Food and Feed (RASFF) on African exports of plant products ? We address these different questions through three essays. In the first essay, we theoretically analyze the net effect of technical non-tariff measures (TNTMs) on bilateral trade and suggest a robust empirical approach to evaluate this effect. We assess the impediment, enhancement and net effects of the TNTMs in force in OECD countries on African exports of plant products. Our theoretical findings highlight that the net effect of the TNTMs on aggregate bilateral trade depends not only on the elasticity of substitution and the elasticity of marginal cost with respect to the TNTMs but also the shape parameter of the distribution of marginal costs which depends on the technology. In addition, we find that for a given elasticity of substitution, only firms or countries characterized by a lower marginal cost than a cutoff marginal cost and higher productivity than a threshold productivity level will experience a positive net effect of trade to a given destination. For our empirical investigation, we estimate a sectoral gravity equation using the non-tariff measures (NTMs) database released by UNCTAD and WITS combined with cross-sectional trade data for 2017 from the UN COMTRADE/WITS database. The data cover 53 African countries exporting 40 Harmonized System (HS) 4-digit plant products to 35 OECD member countries. Our empirical results show both impediment (decrease of 3.099%) and enhancement (increase of 2.056%) effects of the TNTMs in force in OECD countries on African exports of plant products. Together, these effects yield a negative and significant net effect, which indicates that the TNTMs in force in OECD member countries are obstacles for African exporters of plant products. In the second essay, we disentangle theoretically and empirically the effects of the MRLs for pesticides on the production, export supply and import demand. We adopt a modelling approach based on the costs and benefits associated with food safety standards and use our theoretical framework to assess the empirical net effects of the MRLs for pesticides on African mango production and trade with OECD member countries. Theoretically, we show that the production effects of MRLs are negative while their net effects on bilateral trade can be positive, zero or negative depending on whether the consumers' perceived quality effect on import demand is greater than, equal to or less than the compliance cost effect on export supply through the unconditional expected standard-compliant production. We use a cross-sectional data set for 12 African countries that produced and exported MRL-compliant mangoes to 31 OECD countries in 2016, and find that, on the one hand, the net effects of MRLs on the production of safe mangoes are negative. On the other hand, they are positive on mango trade between African and OECD member countries. Our results highlight that the tightening or imposition of strict MRLs for pesticides in developed countries may be trade promoting while they severely impede production in African countries. In the last essay, we assess the effects of European countries' import refusals on African exports of edible vegetables and fruits from 2008 to 2018. We specifically estimate the average effects of the RASFF countries' border rejections on the extensive and intensive margins of African countries exports of edible vegetables and fruits. We use the border rejections data from the RASFF online database and export data on 45 African countries from the UN WITS database. We estimate the canonical version of the sectoral gravity equation of Anderson and al. (2004) using the Poisson pseudo maximum likelihood (PPML) estimator of Silva and al. (2006) in association with the robust twostage residual inclusion (2SRI) approach of Terza and al. (2008). We find that a single increase in the number of import refusals by a RASFF country in the current year leads to a decrease in the number of trade partners in Europe for African countries by 0.018 percent for edible vegetables and 0.143 percent for edible fruits. In addition, our results show that one additional import refusal decreases the export value of African countries' edible vegetables by 0.045 percent. However, we find that RASFF countries' refusal to import once in the current year leads to an increase in the export value of African countries' edible fruit by 0.126 percent. Furthermore, our results explicitly validate the hypothesis of the endogeneity of the number of import refusals and highlight both the direct and spillover effects of border rejections. The latter result means that an increase in the number of border rejections for a given product (for instance, a fresh fruit) in a given year leads to an increase in the number of border rejections for a product and its neighboring products (for instance, a fresh vegetable) in the next year.
Document Type: Thèse de doctorat
Issue Date: 2021
Open Access Date: 19 April 2021
Grantor: Université Laval
Collection:Thèses et mémoires

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