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Heterogeneous Trade Effects of Pre-Shipment Inspections

Author

Listed:
  • Cosimo Beverelli

    (UNIMORE - Università degli Studi di Modena e Reggio Emilia = University of Modena and Reggio Emilia)

  • Martin Braml

    (German Federal Ministry of Finance, University of Passau, Ifo Institute)

  • Lionel Fontagné

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris)

  • Alexander Keck

    (World Trade Organization)

  • Gianluca Orefice

    (Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, CESifo - CESifo)

Abstract

We analyze the trade impact of pre-shipment inspections (PSI)—a practice under which imports need to undergo a third-party review process before shipment, and whose utilization has been limited by the WTO Trade Facilitation Agreement. We show that PSI requirements had a negative impact on imports, and were most harmful for trade in differentiated manufacturing products (administrative trade cost channel). In contrast, PSI were facilitating trade in products subject to conformity assessment procedures related to sanitary and phytosanitary measures (information channel). Counterfactual analysis suggests that the reduction in administrative costs outweighed the provision of information, with the removal of PSI leading to a slight increase in developing countries' imports. The removal of PSI could also induce a cost: the relaxation of controls on custom misinvoicing. We show that PSI had a limited effect on trade misinvoicing at the intensive margin, and on lost exports at the extensive margin.

Suggested Citation

  • Cosimo Beverelli & Martin Braml & Lionel Fontagné & Alexander Keck & Gianluca Orefice, 2025. "Heterogeneous Trade Effects of Pre-Shipment Inspections," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-05368393, HAL.
    • Handle: RePEc:hal:cesptp:halshs-05368393
    DOI: 10.1093/wber/lhaf013
    as

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