Are veterinary drug maximum residue limits protectionist? International evidence

Abstract

We analyze the distribution of maximum residue limits (MRLs) on veterinary drugs used in animal production and aquaculture in a global context of food consumption and trade. We compare MRLs by drug-product pairs for a large set of countries, commodities, and drugs. International standards by Codex cover a small fraction (27%) of existing drug-product pairs. When Codex MRLs exist, deviations from Codex MRLs are minimal. Little protectionism prevails overall, although countries with a larger presence in world markets and with larger net imports in the regulated commodity have stricter standards. Higher variation prevails when Codex standards do not exist. MRLs exhibit an anti-protectionist lower tail that is fatter than that of those MRLs for which Codex has a standard. Increasing the institutional capacity of Codex Alimentarius for establishing a larger set of MRLs is likely to facilitate greater alignment of MRLs across countries. We highlight the leading regulatory roles of Codex, the European Union, and the United States in helping set MRLs for other countries to which 41, 6, and 5 countries fully defer, respectively.