Harmonisation of food regulations and trade in the Single Market: evidence from disaggregated data

Abstract

This paper uses a structural gravity model based on Anderson and van Wincoop (2003) to quantify and test the hypothesis that EU harmonization of food regulations increases EU bilateral trade. Using a self-constructed database that identifies processed food products at a detailed level covered by harmonization, our results suggest that bilateral exports subject to harmonized food regulations are 253% greater than bilateral exports not covered by harmonized food regulations for 1998. The paper also estimates a tariff equivalent of trade costs that arises from non-harmonized food regulations which ranges between 73% and 97%. Both of these effects vary across food sub-sectors.