QUALITY RESTRICTIONS AS BARRIERS TO TRADE: THE CASE OF EUROPEAN COMMUNITY REGULATIONS ON THE USE OF HORMONES

Sanitary regulations, product definitions, grades, production or processing regulations, and other qualitative standards are generally applied to both domestic production and imported goods. These quality restrictions can be seen as trade barriers, although it is often difficult to determine whether a given restriction is based on legitimate health or safety concerns or is simply an alternative device for protecting producers. The purpose of this paper is to evaluate the welfare effects of a recent quality regulation, the European Community ban on the use of hormones in livestock production. A conceptual framework is developed to analyze the effects of the ban on the market for edible offals. The results indicate that Community prices for edible offals will increase 34% to 45%, while the world price will fall by at least 35%.