Estimating the effects of import rejections related to stricter non-tariff measures (NTMs) in European RASFF countries on African Exports of Edible Vegetables and Fruits

Most agri-food import rejections at the borders of Rapid Alert System for Food and Feed (RASFF) network countries stem from non-tariff measure (NTM) compliance issues, such as the presence of mycotoxins, pathogenic microorganisms, excessive pesticide residues, and insufficient quality controls. These rejections predominantly affect products like edible vegetables and fruits, which African countries export more frequently than other nations. This paper examines the impact of RASFF import refusals on African exports of edible vegetables and fruits from 2008 to 2018. Specifically, we estimate the average effects of border rejections by RASFF countries on the extensive and intensive margins of African exports, accounting for the endogeneity of current border rejections and addressing the issue of zero trade flows. Using data on border rejections from the RASFF online database and export figures from 45 African countries in the UN WITS database, we apply the canonical sectoral gravity equation from Anderson & Van Wincoop (2004). Our methodology employs the Poisson Pseudo Maximum Likelihood (PPML) estimator from Silva & Tenreyro (2006), combined with the robust Two-Stage Residual Inclusion (2SRI) approach of Terza et al. (2008). Our findings indicate that a single import refusal by a RASFF country in a given year leads to a 0.018% decrease in the number of European trade partners for African exporters of edible vegetables and a 0.143% decrease for edible fruits. Additionally, each additional import refusal lowers the export value of edible vegetables from African countries by 0.045%. However, counterintuitively, import refusals in a given year contribute to a 0.126% increase in the export value of edible fruits. Furthermore, our results confirm the endogeneity of import refusals and reveal both direct and spillover effects of border rejections. Specifically, an increase in border rejections of a particular product such as fresh fruit one year prior correlates with a rise in rejections of the same product and similar items, such as fresh vegetables, in the following year.