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Title:SPS measures and trade: Implementation matters PDF Logo
Authors:Crivelli, Pramila
Gröschl, Jasmin
Issue Date:2012
Series/Report no.:WTO Staff Working Paper ERSD-2012-05
Abstract: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.
Subjects:International Trade
Sanitary and Phytosanitary Measures
Conformity Assessment
Heckman Selection Model
JEL:C23
F14
Q17
Document Type:Working Paper
Appears in Collections:WTO Staff Working Papers, Economic Research and Statistics Division, WTO

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