Using SPS measures obtained from
the SPS Information Management System of the WTO and controlling for
zero trade flows, we find that SPS concerns reduce the probability of trade
in agricultural and food products consistently. However, the amount of
trade is positively affected by SPS measures conditional on market entry.
This suggests that SPS measures constitute an effective market entry barrier.
Additionally, we split SPS measures into requirements related to (i)
conformity assessment, and (ii) product characteristics. Both types of measures
are implemented by policy makers to achieve a desired level of health
safety, yet, entail diverse trade costs. We find that conformity assessment
measures hamper not only the likelihood to trade but also the amount of
trade, while measures related to product characteristics do not affect the
market entry decision, but have a strong positive impact on the trade volume.
This suggests that trade outcomes crucially depend on the measure
policy makers decide to implement.
No: ERSD-2012-05
Authors:
Pramila Crivelli — University of Geneva
and
Jasmin Gröschl
— Ifo Institute for Economic Research
at the University of Munich
Manuscript date:
February 2012
Key Words:
International Trade, Sanitary and Phytosanitary Measures, Conformity
Assessment, Heckman SelectionModel
JEL classification numbers:
C23, F14, Q17
Disclaimer back to top
This is a working paper, and hence
it represents research in progress. This paper represents the opinions of
the author, and is the product of professional research. It is not meant
to represent the position or opinions of the WTO or its Members, nor the
official position of any staff members. Any errors are the fault of the
author. Copies of working papers can be requested from the divisional
secretariat by writing to: Economic Research and Statistics Division,
World Trade Organization, Rue de Lausanne 154, CH 1211 Geneva 21,
Switzerland. Please request papers by number and title.
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