Triggering Factors for US Import Refusals

Antifreeze in toothpaste and melamine-tainted infant formula have raised concerns about the quality and safety of imports into the US to unprecedented levels. However, the Food and Drug Administration (FDA) cannot inspect all imports, so their inspections are path-dependent (Baylis et al., 2009) and targeted based on risk (Elder, 2013). This research investigates potential factors triggering FDA's import refusals within the three categories of food, drugs, and cosmetics during the period from 2002 to 2014. Triggering factors are differentiated by: 1) FDA's human resource and financial capacity; 2) product-specific characteristics; 3) economic and political pressures in the US and exporting countries; and 4) spillover effects among exporting countries. Number of refusals and ratio of refusals to import value are used as the dependent variable in a dynamic panel data model and in Negative Binominal model, respectively. The dummy variables for 20 countries classified into three regions (Asia, EU, and the Americas) are not statistically significant. Factors related to FDA's human resource and financial capacity, including FDA budget allocation, FDA foreign offices, the Food Safety Modernization Act of 2010 and historical compliance all have a significant influence on refusals. Determination of spillover effects indicates that lagged refusals and food scandal from China caused significant influence on rejections not only from the neighbor countries but also the EU members and American countries.