TTIP and Agricultural Trade: The Case of Tariff Elimination and Pesticide Policy Cooperation

Bo Xiong, John C. Beghin
October 2016  [16-WP 566] (Revised)

A possible Trans-Atlantic Trade and Investment Partnership (TTIP) agreement will further integrate agricultural markets between the United States and the European Union. The elimination of tariffs and cooperation on sanitary and phytosanitary measures will promote cross-Atlantic trade. We empirically estimate the impacts of tariffs and Maximum Residue Limits (MRLs) on trade in plant products between the two partners. Furthermore, we simulate trade expansions under plausible negotiation outcomes. We find that a TTIP agreement promotes cross-Atlantic trade in plant products, in both directions, by over 60% if tariffs are removed and MRLs are mutually recognized or harmonized to Codex levels.

Keywords: Trans-Atlantic Trade and Investment Partnership, TTIP, maximum residue limit, MRL, sanitary and phytosanitary measures, tariff, trade agreement, NTM

JEL: Q17, F15

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