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An Economic Theory of the SPS Agreement

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Author Info
JINJI Naoto
Abstract

Sanitary and phytosanitary (SPS) measures are important policy instruments to regulate food safety and to protect the domestic ecosystem from biological invasions. However, these measures may also be used to protect domestic producers from international competition. The World Trade Organization's (WTO) Agreement on the Application of Sanitary and Phytosanitary Measures (the SPS Agreement) was established in 1995 to prevent member countries from using SPS measures discretionarily and arbitrarily. Whereas the SPS Agreement is mainly based on the risk analysis approach, economists have criticized it for its lacking economic considerations in regulating SPS measures. Despite these criticisms, I show that the SPS Agreement would contribute to establishing economically sound discipline for SPS measures by reducing the scope of the use of SPS measures for disguised protectionist purposes. However, it is not entirely free from protectionist use of SPS measures. Potential problems also arise from scientific uncertainty.

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Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 09033.

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Length: 26 pages
Date of creation: Jul 2009
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Handle: RePEc:eti:dpaper:09033

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  7. John Wilson & Tsunehiro Otsuki & Baishali Majumdsar, 2003. "Balancing food safety and risk: do drug residue limits affect international trade in beef?," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 12(4), pages 377-402, December. [Downloadable!] (restricted)
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  8. Christopher Costello & Carol McAusland, 2003. "Protectionism, Trade, and Measures of Damage from Exotic Species Introductions," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 85(4), pages 964-975, November. [Downloadable!] (restricted)
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  10. Chengyan Yue & John Beghin & Helen H. Jensen, 2006. "Tariff Equivalent of Technical Barriers to Trade with Imperfect Substitution and Trade Costs," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 88(4), pages 947-960, November. [Downloadable!] (restricted)
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  11. Copeland, Brian R., 1989. "Tariffs and quotas : Retaliation and negotiation with two instruments of protection," Journal of International Economics, Elsevier, vol. 26(1-2), pages 179-188, February. [Downloadable!] (restricted)
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  13. Otsuki, Tsunehiro & Wilson, John S. & Sewadeh, Mirvat, 2001. "Saving two in a billion: : quantifying the trade effect of European food safety standards on African exports," Food Policy, Elsevier, vol. 26(5), pages 495-514, October. [Downloadable!] (restricted)
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  15. Josh Ederington, 2002. "Trade and Domestic Policy Linkage in International Agreements," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1347-1368, November. [Downloadable!] (restricted)
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  19. Isaac, Grant E., 2004. "The SPS Agreement and Agri-food Trade Disputes: The Final Frontier," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 5(1). [Downloadable!]
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