An Empirical Assessment of the Effects of SPS Regulations on U.S. Fresh Fruit and Vegetable Exports

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Virginia Tech

A fundamental requirement in agricultural trade is that imported products are safe, and do not pose a risk to human, animal and plant health. To address this issue, all countries maintain measures to ensure that imported food is safe for consumers, and to prevent the spread of disease among animals and plants. These measures, by their nature, can affect competitiveness by increasing the costs of imports or prohibiting them altogether. To ensure that these measures are used for their intended purpose and not as protectionist measures, WTO member countries signed the Agreement on the Application of Sanitary and Phytosanitary measures.

A growing number of studies attempt to quantify the effects of SPS regulations on international trade flows. However, precious little research is dedicated to determining the effects of specific phytosanitary regulations on trade flows and, more importantly, questions regarding SPS regulations and their impact as "trade barriers" or "trade catalysts" remain to be settled.

This thesis contributes to existing literature in two ways. First, a comprehensive and user friendly database on specific phytosanitary regulations faced by U.S. exports of onions, peas, walnuts, apples, cherries, grapes, peaches/nectarines, oranges and strawberries to 176 countries is developed for the period 1999-2009. Second, this database is used for an empirical investigation to determine how existing SPS regulations affect U.S. fruit and vegetable exports.

The results indicate that initially, phytosanitary treatments act as "barriers" to trade. However, as exporters' experience grows, the negative impact of treatments is reduced and eventually eliminated.

SPS, phytosanitary, non tariff measures, gravity model of trade, fresh fruits and vegetables, U.S. exports, Poisson