L11

Question 1

Trade policies

Answer 1

• Tariffs (tax on import and export)
  
  • Quotas (quantity restriction of import and export)
  • Export subsidies
    
    • Regulation (safety norms)

Question 2

Geographic indication

Answer 2

A geographic indication is a collective label to certify geographical origins of a product
=link product to quality (perceptions) to the location of their production
It solves information asymmetry
It is a protectionist instrument

Question 3

Chocolate

Answer 3

Became a chocolate market
Could test ingredients in food/chocolate and analyze in microscope
A lot of producers was substituting expensive products with cheap alternative
Sometimes they put poisonous things in food
=> introduced public standards to protect customers
• Prohibit some ingredients
• Put labels on products
• Only allowed to produce in one specific way (recipe)

Question 4

30 year chocolate war

Answer 4

member in EU defined chocolate in almost same way (recipe)
but when UK joined which only had regulations of what could not be in the chocolate their chocolate could not be defined and exported as chocolate
Compromise was that up to 5 % of fat could come from other than chocolate bean

Question 5

history of Wine

Answer 5

• Bug which destroyed 70 % of french grapes
• France imported from Spain and Italy and dry grapes from Greece
• Settlers in Africa started producing wine and export 90% to France
• French wines was restored, supply increased and prices decreased
○ Imported export tax
○ Defined wine (no more dry grapes)
○ Increase tariff on raisin
○ Regulation between quality and terroir
○ Tariff on Algeria when they gained independency

Question 6

In 1960s countries in Africa gained independency - what happened?

Answer 6

• The European settlers went back home
-The countries lost the skilled labor
Wine is a big investment that takes time and knowledge
The wine consumption within the countries in Africa also decreased when settlers left
- France could also impose tariffs on Algeria
- Nationalized vineyards
Poor management
Did not have ability to find new export
=>Production of wine hugely declined

Question 7

Wine standards and European integration

Answer 7

In 1960s the European Union had been established
This required a harmonization or standards
French regulation extended to other countries
Italy had a more liberal policy (no GI)
A Common Wine Policy was established 1970 with minimum prices and intervention buying
This lead to overproduction because the union would pay for production - incentivized to produce more and more
(Especially Italy produced a lot)
The French blocked the Italy harbors and this triggered a wine war
The Wine Policy was reformed and introduced planting rights
Needed to own planting right (≈license) on top of property rights to be allowed to produce wine