Trade policy and health implication for Pacific island countries

Abstract

PurposeThe purpose of this paper is to examine the effect of trade policy pertaining to imported processed food on poorer health outcomes of people’s in the Pacific island countries.Design/methodology/approachUsing an extended gravity model, the paper adopts the OLS time varying importer/exporter effects method and a Pseudo Poisson maximum likelihood estimator on a cross-sectional panel data set of 215 countries and territories. The estimation procedure controlled for 11 Pacific island countries between 2003 and 2013.FindingsThe empirical findings revealed a positive and statistically significant relationship between trade liberalisation and increased processed food imports in the Pacific island countries. The findings also reveal that the access ratio (kg/person) to selected imported processed food high in salt to Pacific island countries has increased significantly over time.Originality/valueWhile much of the trade literature reveals positive impact of trade on the prosperity of nations, this study makes a new contribution in terms of supporting a negative impact of trade liberalisation policy on people’s health in small island developing states.