Weight gains from trade in foods: Evidence from Mexico

11/03/2017

|

Osea Giuntella, Matthias Rieger, Lorenzo Rotunno

The prevalence of obesity, overweight and other diet-related chronic diseases has increased rapidly in the developing world. Today an estimated 62 percent of obese individuals live in developing countries (Ng and et al., 2014). The number of overweight or obese people living in the developing world has tripled between 1980 and 2008 (Keats and Wiggins, 2014). Over the same period many emerging economies have opened up their food markets to international competition. In response, policy makers have paid more attention to the implications of globalisation and international trade for population health and diets. The World Health Organization (WHO, 2015), for instance, has adopted a clear mandate to help and support member states to better align trade and health policies. Despite the perceived association between trade liberalisation and diet-related health outcomes, the causal effects of trade in foods on obesity and their quantitative importance are not well established.

The rise of obesity in emerging economies has been associated with a “nutrition transition” whereby diets become richer in animal fats and sugars, and rely more on processed foods as average income increases (Popkin and Gordon-Larsen, 2004). These nutritional changes are intertwined with an epidemiological transition in which populations increasingly suffer from obesity, diabetes and cardiovascular diseases rather than infectious diseases and undernutrition (Omran, 1971).

Greater openness to trade in foods can affect the nutrition transition and hence obesity through changes in income, food prices, tastes and norms. By increasing average income, trade liberalisation can fuel the nutrition transition and contribute to the rise in obesity. Its effects through prices are however ambiguous as they depend on the induced price changes and availability of unhealthy and healthy foods. Furthermore, globalisation and trade openness can affect norms and preferences by, for instance, heightening exposure to food advertising on television and the internet (Dragone and Ziebarth, 2017).

In this paper, we empirically examine the effects of U.S. exports of foods and beverages (F&B or ‘food’ for short) on obesity in Mexico. Over the last decades, Mexico has recorded spectacular increases in diabetes and obesity rates, and has become a prime example of a country in the nutrition transition (Popkin et al., 2012). According to the latest WHO data from 2014, it ranks among the twenty most obese countries in the world, with an estimated 28 percent of the adult population being obese. Trade flows between the U.S. and Mexico have also grown substantially since the 1980s and following the North America Free Trade 1A recent literature in public health has studied the link between trade liberalisation and supply and sales of products containing high-fructose corn syrup (Barlow et al., 2017), and sugar-sweetened beverages (Lopez et al., 2017; Schram et al., 2015). 2 Agreement (NAFTA) in 1994 (Caliendo and Parro, 2015).2 This is particularly true for the F&B industry, where U.S. products represent around 80 percent of total Mexican imports (see section 4.1 for details). In our empirical analysis, we dissect these aggregate patterns and investigate the influence of U.S. “unhealthy” foods on Mexican diets and hence on obesity prevalence in Mexico.3 By so doing, we assess to what extent the U.S. has “exported” its high obesity prevalence (the highest among OECD countries (OECD, 2017)) to Mexico through trade in foods.

Read More Here.