Investigating the impact of SPS standards on trade using a VES model

Lan Liu · Chengyan Yue

36 citations0/0 files storedEuropean Review of Agricultural Economics

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Global trade and economics Agricultural economics and policies Economics of Agriculture and Food Markets

Abstract

This study employs a novel nested variable elasticity of substitution (VES) utility model to investigate the impacts of food safety standards on international trade and social welfare. The nested VES utility model is applied to investigate the impact of the European Union (EU) Hazard Analysis Critical Control Point (HACCP) standard on EU orange juice (OJ) trade and social welfare. Our results show that the standard's impact on trade and welfare is underestimated when the elasticity of substitution is restricted to be constant. Our findings indicate that the implementation of the EU HACCP standard increases EU OJ imports as well as consumer welfare. We also find that the EU HACCP standard has a greater impact on intra-EU OJ imports than on extra-EU OJ imports.

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References

2008The Impact of Regulations on Agricultural Trade: Evidence from the SPS and TBT Agreements 2001Saving two in a billion:1967A Two-Level Constant-Elasticity-of-Substitution Production Function 2009Standards as Barriers Versus Standards as Catalysts: Assessing the Impact of HACCP Implementation on U.S. Seafood Imports 1971A Class of Variable Elasticity of Substitution Production Functions 2010The Combination of Gravity and Welfare Approaches for Evaluating Nontariff Measures 2006Harmonisation of food regulations and trade in the Single Market: evidence from disaggregated data 1998TECHNICAL BARRIERS TO TRADE: A CASE STUDY OF PHYTOSANITARY BARRIERS AND U.S. - JAPANESE APPLE TRADE

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2018The causal impact of HACCP on seafood imports in the U.S.: An application of difference-in-differences within the gravity model 2016Food safety regulations and fish trade: Evidence from European Union-Africa trade relations 2017The Economic Impact of SPS Measures on Agricultural Exports to China: An Empirical Analysis Using the PPML Method 2017TBT and SPS impacts on Korean exports to China: empirical analysis using the PPML method

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