Technical Barriers to Trade: A Case Study of Phytosanitary Barriers and U.S.-Japanese Apple Trade

Abstract

Concern about the use of technical barriers as restrictions to trade has increased since the World Trade Organization Agreement on Agriculture. In this analysis, we quantify the phytosanitary barriers to U.S. apple exports to Japan by calculating tariff-rate equivalents. We examine the trade and welfare impacts of removing phytosanitary barriers and tariffs under two assumptions regarding transmission of the bacterial disease fire blight: first, that transmission via commercial fruit is not possible, and second, that it can occur. The disease losses required to eliminate the gains to trade are estimated to be much larger than those experienced in other countries. When the World Trade Organization (WTO) Agreement on Agriculture was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, many feared that reducing traditional supports to the agriculture sector would lead governments to place more reliance on technical barriers (TBs) - particularly sanitary and phyto- sanitary barriers - to protect producers. TBs are defined as import standards or regulations that reflect a country's concern and valuation for safety, health, food quality, and the environment (Roberts and DeRemer; Hillman). TBs include sanitary and phyto- sanitary regulatory measures related to food safety and animal and plant health; food standards of definition, measurement, and quality; and environmental or natural resource conservation measures. To date, TBs generally have not been quantified, and therefore cannot be easily compared with other trade barriers. The Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement), also negotiated during the Uruguay Round, allows sanitary and phyto- sanitary regulatory measures to protect plant, animal, and human health. Each member country determines its own level of protection, and adoption of a zero-risk tolerance level is allowed. The regulatory measures used to achieve a particular level of protection require a sound scientific base, although the standards for assessing the scientific