How did the ban affect US and European producers of beef respectively? updated 2023
EC7190 Written assignment 3 Instructions: Read the Harvard Business Publishing case study “Food fight: the US, Europe, and trade in hormone-treated beef (abridged)” and perform the following two tasks.
Task 1: Provide brief answer to the following questions. 1. Do you think the European ban on hormone-treated beef is a non-tariff trade barrier? Justify your answer.
2. How did the ban affect US and European producers of beef respectively?
3. Did the ban affect any product markets other than the beef market? If yes, what markets were affected? Why were they affected? Find the answers from the case study.
4. To continue with the above question, pick a product market that was affected, and comment how the consumers and producers of this product are affected respectively
. 5. Learn about WTO and GATT from some other sources such as your textbook or online information to supplement your reading of this case study. Briefly summarize how the beef dispute between EU and US was settled at WTO. Task 2: What is your opinion on this beef fight between EU and US?
Should the ban be in place? Why or why not? Task 3: page 8 of the case study, last paragraph
“… In informal negotiations over the next few months, Europeans suggested that the United States sign a document testifying that hormones in US beef production were being used for therapeutic reasons, not the promotion of growth. Such a move would solve the entire problem, some Europeans held, since the directive allowed for therapeutic use. …
” What is your opinion on this suggestion? Task 4: What if EU removes the ban and puts detailed information on label (e.g. whether the beef is hormone treated or not, the place of origin, etc.) and also posts in all grocery stores the information on possible health risk when consuming hormone treated beef, and let consumers make all the choices? What do you think?
What are the pros and cons for this alternative solution to addressing the health concern instead of an outright ban?
Meat Production and Supply Chain Under COVID-19 Scenario: Current Trends and Future Prospects
The COVID-19 pandemic impacted meat production, supply chain, and meat prices that caused a severe socio-economic crisis worldwide
. Initially, meat and meat products’ prices increased due to less production and increased demand because of panic buying. Whereas, later on, both meat production and demand were significantly decreased due to lockdown restrictions and lower purchasing power of the consumers that results in a decrease in meat prices.
In early April 2020, meat packing facilities started to shut down due to the rapid spread of the COVID-19 virus among workers.
Furthermore, meat producers and processors faced difficulty in harvesting and shipment of the products due to lockdown situations, decrease in labor force, restrictions in movement of animals within and across the country and change in legislation of local and international export market.
These conditions adversely impacted the meat industry due to decrease in meat production, processing and distribution facilities.
It is suggested that the integration among all the meat industry stakeholders is quite essential for the sustainability of the industry’s supply chain to cope with such devastating conditions the future may hold. This review aimed to discuss different aspects of the meat industry and supply chain during the COVID-19 pandemic and proposed some future directions.
The COVID-19 pandemic adversely affected many sectors of life, taking a huge toll not only on the economy but the livestock industry, such as global meat production and supply chain. Several countries’ preventive measures included travel restrictions, border controls, and country lockdowns, developed harsh consequences affecting production and supply chain. Meat production and processing were compromised due to difficulty of purchasing production inputs such as feed for animals, restrictions of transportation of live animals including seasonal border crossing restrictions, accessing professional services and workforce, and restrictions in supplying meat and meat products to the markets
These problems caused a drop in capacity for meat production and plants’ processing, resulting in decreased sales conditions that slowed down market activity
(4). Furthermore, during this COVID-19 pandemic, there was a decrease in governmental capacities to prevent, control and treat animal diseases.
This was mainly due to the reallocation of the resources needed to respond to the pandemic effectively. Particularly, prevention and control of transboundary diseases such
as Foot and Mouth Disease, African Swine Fever, Avian Influenza, and other infectious animal diseases have been severely compromised meat production and supply chain
Hidden obstacles to trade: The case of the EU’s Ban on beef hormones
Agriculture is one of the most protected sectors in international trade, with higher tariffs than manufacturing (Peral, Peroni, & Standard, 2012), sensitive sectors that have make trade negotiations difficult (Baldwin, 2009), tariff-rate quotas (TRQs) that limit market
access (Beckman, Dyck, & Herman, 2017), and the significance of non-tariff measures (NTMs) impeding trade more than for other sectors (Li & Beghin, 2012). Some sectors face more trade barriers than others. Dairy is one of the most protected sectors (Owen & Winchester, 2014), as are meat products, rice, and sugar.
These products tend to be difficult to negotiate even in regional trade agreements (RTAs), especially for developed countries who have NTMs in place. The EU-U.S. Transatlantic Trade and Investment Partnership (TTIP) is one such RTA where NTMs feature prominently
(Blind & Mueller, 2019).1 In particular, issues revolve around NTMs such as added hormones in beef production, the use of ractopamine in pork production, and pathogen reduction treatments in poultry (Beckman & Arita, 2016). The beef issue is particularly interesting as the U.S. has a program specifically dedicated to producing non-hormone treated cattle (NHTC) that is allowed into the EU.2
NTMs have become an important topic in trade policy discussion and analysis as tariffs have declined and countries have increased the use of NTMs. Compared to tariffs, data from Becker’s (2019) indicates that the ad-valorem equivalent (AVE) of NTMs are often the same, or higher, than the tariffs facing agriculture. Soon and Thompson (2020) estimate
the NTM on Russian chicken imports as 30–40% AVE, which has remained relatively stable over the years, despite a decline in the actual tariff from 46 to 1%. However, NTMs are not directly observable, so it is often difficult to identify and measure their effects on
trade (Furazan & Maur, 2008). Given that TTIP would involve the two largest economies in the world, there has been a great deal of research on the potential impacts. Given that tariffs are relatively low between the two regions, most research has focused on NTMs, especially given that they are hidden obstacles to trade and socio-economic outcomes.
Barden, Francois, Thella, and Tambien (2009); Didier and Marotte (2010); Fontange, Gordon, and Jean (2013); Francois, Manchin, Norberg, Penduko, and Tubergen (2013) and Egger, Francois, Manchin, and Nelson (2015) are some examples—and the research
generated in estimating NTMs in TTIP have been used in other lines of research (e.g., Veld, 2019—and the macro-economic benefits of the EU single market).
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- United Nations Office on Drugs and Crime (UNODC). (2018). World Drug Report 2018. United Nations. (Provides insights into the impact of drug bans on illicit drug markets)
2 .European Commission. (2021). Regulation (EU) 2019/515 of the European Parliament and of the Council of 19 March 2019 on the mutual recognition of goods lawfully marketed in another Member State and repealing Regulation (EC) No 764/2008.