Regulatory Policies in Meat Trade: Is There Evidence for Least Trade‐distorting Sanitary Regulations?

Abstract

Multilateral trade rules as in the Sanitary and Phytosanitary (SPS) Agreement (WTO 1994) on trade in food and agricultural goods offer guidelines to policy makers on how to make use of regulatory instruments governing agrifood trade. The provisions of the SPS Agreement require that regulations targeting specific national agri-food safety objectives are minimal with respect to their trade effects (Art. 5.4) and not more trade restrictive than required (Art. 5.6). Accordingly, Wilson and Anton (2006) define the most welfare-efficient SPS measure as one that is least trade distorting but protective in terms of providing the desired health and safety level. However, only limited knowledge exists on the specific trade impacts of different regulatory instruments available to enforce desired policy goals. Furthermore, the trade impact of regulatory instruments is not always negative; safe and healthy food, information transmission, increased producer efficiency, and increased consumer confidence may also imply positive trade impacts. Gravity models at various levels of detail have been mostly used to provide evidence on the trade impact of regulatory measures. At the aggregate level of agricultural trade, an example includes Disdier, Fontagne, and Mimouni (2008), whereas Otsuki, Wilson, and Sewadeh (2001) analyze product-specific regulations. Another body of literature applies partial equilibrium models in the quest for an optimal set of SPS measures regarding welfare impacts and risk mitigation strategies.