Sanitary and Phyto-Sanitary Measures: Assessment, Measurement, and Impact

Abstract

Although recent data collection have revealed a large and diverse universe of non-tariff measures (NTMs), identification and quantification of these measures remain elusive. While much has been written on the subject, the extant literature has been unable to effectively diagnose the most critical areas of NTM concern, sorting out how and to what extent the trade effects vary across different types of measures, and the development of a suitable framework to address these policies in multilateral and regional trade arenas. The purpose of this paper is to shed new light on the landscape of sanitary and phytosanitary (SPS) measures affecting agri-food trade by exploiting detailed information from the World Trade Organization’s (WTO) SPS committee meeting minutes on specific trade concerns (STCs) as a way to ‘reveal’ major cross-cutting NTM concerns faced by exporters. We catalogue the nature and duration of these measures across countries, products and specific classes of NTMs for the period 1995-2014. Our analysis indicates that developed countries play a significant role notifying specific concerns, although developing country notifications are on the rise. The results suggest that the WTO’s SPS trade concern discussion mechanism may facilitate the resolution of SPS concerns, with success often depending on the type of concern and the participation of Members as raising the issue or maintaining the measure. While most SPS concerns are resolved, the distribution of concerns exhibits sharp peaks and heavy right tails with some concerns lasting more than a decade. Animal diseases and tolerances are identified as recurring concerns in meat and fruit and vegetable trade, respectively, with concerns related to testing and quarantine, customs and administration procedures, certification and import permits also on the rise. A first-pass empirical assessment indicates that SPS concerns impart significant reductions to Members’ agricultural exports. While the SPS trade effects are heterogeneous across types of measures, countries maintaining or raising the measure, and the product sectors considered, they are consistently negative and strikingly large in magnitude, even for some of the largest countries in global agri-food trade. Thus, the analysis and results have important policy implications in terms of targeting SPS areas for discussion.