Knowledge for Development

Does sanitary and phytosanitary regulation stringency affect developing countries exports? Evidence from Chilean fruit exports

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Date: 12/07/2012

Introduction:

Increasing awareness of food safety issues has brought a boost in sanitary and phytosanitary (SPS) regulations and standards. Although is likely that these regulations have increased health and welfare in the countries that impose them, they may also have an important effect in exporting countries, affecting especially small producers in developing countries. Other papers have found that individual quantitative measures of regulatory stringency have an impact on trade, but none has looked into broader SPS regulation stringency indicators. Through a survey that asked Chilean fresh fruit exporters to evaluate the stringency for 16 countries and four fresh fruits, the authors of the study created an index that incorporates several aspects of SPS regulation. The estimations suggest that, on average, quality standards and packaging and labelling issues are considered the most stringent. The authors also estimate a gravity model and find that SPS regulatory stringency, measured by this broad index, has negative and significant effect on traded volume. (AgEcon, 06/2012)

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