Agricultural Trade Face to Non-Tariff Barriers: A Gravity Model for the Euro-Med Area

Abstract:

At first, Non-Tariff Barriers (NTBs) and environmental standards have been aimed at protecting human health, animal and plant safety as well as the environment, wildlife and human security. However, overbearing usage of NTBs can significantly restrict trade. In this regard, many experts hold the view that agricultural exports from developing countries are adversely affected by NTBs. With respect to the present study, the objective is to quantify the actual impact of non-tariff barriers on agricultural trade in the Euro-Med area for the two years 1996 and 2008. For this purpose, a Gravity model use multilateral resistance variables (BNT TTRI) has been applied. Moreover, we have opted for a cross-sectional estimate of bilateral flows between the set of countries making up our sample. Two "dummy" variables are then introduced to specify the non-tariff barriers effects on imports of each block apart. The achieved results show that the coefficients of the standard gravity equation turn out to be significant and bear the expected signs. These indices of trade restrictiveness appear to be significant and negative, reflecting the restrictive effect of tariff and nontariff barriers on these countries "˜agricultural trade. Yet, these two variables evolution has shown a degradation of their effects on such a trade. It is also worth noting that the EU imports from the SEMC have proven to be affected by the first block imposed NTBs exclusively for the year 2008. As for the SEMC imposed on EU exports, they have had a negative and significant impact for the two years: 1996 and 2008.