Research Seminar

Sweet deals, heavy costs? The effects of food trade liberalization and diet-related health costs — Jorge Soguero Escuer

24 Aug 2021


Jorge Soguero Escuer (University of Birmingham)


The new trade agenda has changed the traditional focus on the impact of farm gate policies on international markets towards the implementation of policies tackling other market inefficiencies down in the supply chain. On the demand side, food security is no longer the unique objective and the global mission is now providing affordable healthy foods for everyone. Despite the trade-nutrition linkage has gained attention, unhealthy foods are still passing under the radar in trade negotiations. Snacks, other highly processed foods, and soft drinks have been widely associated with obesity. At the same time, the mounting economic burden of non-communicable diseases, where obesity is a major risk factor, is putting pressure on public health budgets. While trade and investment liberalization has pushed food prices down and provided access to a wider range of fruits and vegetables, it is important to determine to which extent the international expansion of processed foods has contributed to reach the alarming levels of obesity and overweight population. In this study, we examine how free trade agreements affect obesity-related costs through international inflows of unhealthy foods and soft drinks, and the net investment position of US food companies in Latin American markets. We test these mechanisms in a regression analysis based on the mediation approach, as it is a suitable model to test indirect effects. Firstly, we estimate the public health costs associated with obesity for a set of Latin American countries that will later feature as our dependent variable. We then explore whether trade agreements with the US, the largest producer of processed foods, have contributed to increase obesity costs. Our results suggest that Free Trade Agreements(FTAs) with the US promote the imports of these products and substantially contribute to the rising economic burden of obesity. The figures for capital flows also show a significant but not so strong impact on obesity costs. However, both effects are partial, so there are other underlying factors stimulated by FTAs that affect obesity costs.


Sami Bensassi (University of Birmingham) – Fiona Carmichael (University of Birmingham) – Jorge Soguero Escuer (University of Birmingham)


Virtuall via Zoom
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