Estimating the Impact of Environmental SPS and TBT on International Trade

Abstract

According to WTO rules, governments are allowed to take measures in order to protect human health, as well as animal and plant health, provided that the enforced measures are not disguised protectionism. The SPS and TBT agreements try to ensure that the regulations enforced at the country level do not translate into unnecessary barriers to trade. Whether they succeed is a key empirical issue in the literature. Contrasting with previous studies focusing on single cases (e.g. aflatoxins), we adopt a new approach tackling the impact of such measures at the border across countries and industries. Our results generalise the finding of recent studies with a predominance of negative impacts of such measures on trade of fresh and processed food, while in the case of manufacturing products an insignificant or even positive impact is observed.

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