DP5254 Small Fish - Big Issues The Effect of Trade Policy on the Global Shrimp Market

Author(s): Peter Debaere
Publication Date: September 2005
Keyword(s): international trade
JEL(s): F1
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=5254

It is a well-established theoretical result that the trade policy of a large country can directly affect its own and other countries' welfare by affecting international goods prices. However, there exist very few empirical studies that analyze the effect of trade policy on international prices. With detailed data on unit values and tariffs, I show how policy actions in Europe disrupted the global shrimp market in a non-negligible way and set the stage for the current anti-dumping case in the US. The loss of Thailand's preferential trade status in Europe and the international differences in food safety standards during the antibiotics crisis, have shifted esp. Thai, Vietnamese and Chinese shrimp exports away from Europe towards the US in the late 1990s and early 2000s. I document how these shifting markets have decreased US prices for shrimp significantly compared to those in Europe.