Balancing food safety and risk: do drug residue limits affect international trade in beef?

There have been a number of high profile food safety disputes in trade over the past decade. These include the widely publicized case at the World Trade Organization between the US and EU over hormone-treated beef. In particular, consumers in some industrialized countries have expressed concern over the health implications of consuming beef produced with antibiotics and other artificial supplements. Developing countries are affected in a significant way in how these concerns are addressed, as well as the balance between risk and safety reflected in how standards are set. This paper examines the impact of drug residue standards on trade in beef and the trade effect of setting harmonized international standards. We find that if international standards set by Codex were followed in antibiotics, global trade in beef would rise by over $3.2 billion. Among other developing countries, South African exports would rise by $160 million, Brazil's by $200 million, and Argentina's by over $300 million.