Is the Bioterrorism Act a Barrier to Developing Country Seafood Exporters

Abstract

The United States is one of the largest seafood importers in the world and most of the seafood that is consumed is imported. More strict food safety regulations, such as mandatory HACCP in 1997 and the Bioterrorism Act in 2002, have been established to ensure the safety of products. This has led to debates about the role of food safety regulations acting as technical barriers for developing countries. The HACCP and Bioterrorism Act are used in this study to represent the implementation of stricter food safety regulations to the U.S seafood trade flow. A fixed effects gravity model is used to analyze the panel data of 30 developed and developing exporting from 1992 to 2006. Nineteen of these countries are developing, while 11 countries are developed. Not surprisingly we find the impact on US imports to be positive for the exporting country’s GDP, its export volume, and its membership in regional trade agreements; and negative for distance and time. The results show negative, but statistically insignificant, effects of HACCP and the Bioterrorism Act overall. We reject the hypothesis that these regulations act as de facto barriers to trade and suggest that food safety regulations may not affect the seafood imports to the U.S as a whole.Analyzing developed and developing countries separately reveals negative effects of HACCP and Bioterrorism for developing countries as a group and positive effects for developed countries as a group. However, since the estimates from this analysis are not statistically significant, we must reject the hypothesis that food safety regulations act as technical barriers to impede trade for developing countries.The results from country-level estimates are quite varied. Both developed and developing countries are found with both positive and negative coefficients for HACCP and Bioterrorism with most of them being insignificant. However, we find significant positive estimates for three developed countries and both positive and negative effects among developing countries. These significantly different effects among countries may support the view of food safety regulations as technical barriers for certain countries.Since exporting countries have different levels of market share and different abilities to comply with food safety requirements, the impacts from food safety regulation are different among countries. For example, large exporting countries may have little impact from stricter food safety regulations or even gain from regulations while small exporting countries may face negative impacts. It appears that the role of food safety regulations may be better analyzed on an individual country basis rather than as a group.Our study tended to confirm previous results that found food safety regulations could be either a barrier to trade or a catalyst by enhancing the quality of products and export performance.