Journal of Business & Economic Policy

ISSN 2375-0766 (Print), 2375-0774 (Online) DOI: 10.30845/jbep

Competition in the World Market, Diversity versus Market Protection
Caspar von der Crone

The imposition of punitive duties on imports by the US Government is not new. Such measures have traditionally been a strategic trade policy instrument to protect domestic market participants. Another reason, however, is the different competitive conditions vis-à-vis third-country suppliers. The example of the poultry industry will be used to illustrate the obstacles and perspectives. In many countries, especially in South America and Thailand, production conditions are much more favorable than in most countries of the European Union due to the resources available. In the past, the EU Commission has introduced customs duties on imports from third countries to protect agriculture. In the major exporting countries, Brazil, Thailand and the USA, import tariffs for market access were systematically adjusted. In fact, the production costs for poultry meat in these countries are significantly lower as no raw material components for animal processing, such as cereals or protein carriers, have to be imported. In addition, there are significantly lower labor costs, simplified requirements for working conditions and lower environmental and animal welfare requirements, as well as less stringent requirements for facilities and stables. All these aspects lead to production costs up to one third below the EU average. In addition, the competitive advantage includes product specifications that correspond to those of the EU and compliance with global standards such as IFS (International Featured Standard) or BRC (British Retail Consortium). Diversity aspects and trade effects on the world market are examined using Brazil as an example. Brazil is one of the largest poultry meat producers and the world's largest exporter of poultry meat. Over time, the EU Commission has installed several levers to control imports from Brazil, but also from other countries. For this reason, threshold prices, customs duties and safeguard clauses have been set to protect EU producers. These are at odds with the GATT and WTO agreements and the objectives of the free trade agreements. The EU Commission continues to adhere to this. However, there are quotas at reduced or even suspended duties. The use is however bound to regulations. The elaboration is intended to present the effects of impairments and imbalances on world trade.

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