A political economy approach to measuring EU food standard enforcement and their implications on agri-food trade.

Abstract

The effect of Non-Tariff Measures (NTMs) on agri-food trade has drawn broad research interest and gained a substantial attention by scientific community as well as by policy makers. Sanitary and Phytosanitary (SPS) standards among others represent a major challenge for trade policy and food safety. The identification and measurement of the economic implications of NTMs require the use of an adequate both methodological and empirical framework to derive sound estimates. By targeting economic sectors and issues not previously investigated, this Thesis contributes to previous literature on determining the factors that affect the implementation of SPS and their effects on trade flows. Four specific objectives have been pursued in four papers that constitute the main body of the present Thesis. The main purpose of the first paper is to investigate the scope of the reputation effect over time. To do so, we use The European Union (EU)'s Rapid Alert System for Food and Feed (RASFF) data on sanitary and phytosanitary notifications from 1998 to 2013. Two count data models have been implemented to estimate the distribution of current notifications. In line with previous literature, our findings indicate that reputation does affect current EU notifications. Furthermore, we identify some relevant exporter countries for which reputation is long-lasting. The second paper aims at analyzing the behavior of the EU in controlling Aflatoxin (AF) contamination with respect to tree nuts and groundnuts for the period (1998-2015). To conduct this analysis, we have used a count data model, based on political economy considerations, past alerts and path dependence effects. Policy changes, including harmonization of AF standards and their further relaxing are estimated to have significant impact on the frequency of border controls. In the third paper, we seek to assess the influencing factors on food standard enforcement in the EU with a special attention to agri-food imports from Mediterranean countries. We explore if there is any special treatment toward Mediterranean countries in controlling agri-food imports, testing if past border notifications affect current decisions on the implementation of food standards by the EU. RASFF notifications data over the period 2000-2012, and count data models are used for this purpose. Our empirical results support the hypothesis that previous food notifications may slightly affect current notifications; nevertheless, this effect seems to be less relevant for products of interest for Mediterranean Partner Countries. Hence, we cannot identify a pro or anti Mediterranean bias in the way that food safety controls are implemented at the EU borders. The last paper focuses on the assessment of the competitiveness of the Tunisian agri-food sector before signing the Deep and Comprehensive Free Trade Agreement (DCFTA) with the EU. Specifically, competitive advantage measurement, based on the Tunisian National Institute of Statistics (INS) data over 2007-2012 period, has been used for this purpose. The analysis of the Tunisian agri-food sector reveals an important potential for exporting some agri-food staples. Recently, Tunisia is facing new challenges in exporting strategic products underlying the importance of adopting new business and marketing strategies or prospecting new markets. However, some agri-food subsectors, mainly animal products, milk and dairy products and cereals, remain unprepared to overcome the costs of the DCFTA due to their low competitiveness. Hence, Tunisian authorities could propose a progressive trade liberalization strategy with the EU.