IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Welfare Assessment of SPS Standards: An Empirical Study of Indo-US Mango Trade Dispute

Listed author(s):
  • Siddhartha.K.Rastogi


    (Indian Institute of Management,Indore,India)

As trade quotas have been eliminated under GATT and tariffs have been rationalized under WTO; the focal point of disputes and negotiations in international trade has shifted to non-tariff barriers (NTBs), particularly Sanitary and Phytosanitary (SPS) standards. However, in the absence of any past experience and concrete scientific or empirical evidence, standards are usually kept at prohibitively high levels, thereby inducing sub-optimal outcomes. One such case is the mango trade dispute between India and USA. India ranks first in mango production worldwide, supplying about 40 per cent of world mangoes; whereas, USA is world’s biggest mango importer accounting for 32.7% of the total imports worldwide during 2003-05. However, USA imposed a ban on import of Indian mangoes between 1989 and 2006 due to high pesticide levels and incidence of pests. The US permitted import of mangoes from India in 2006 under high standards and strict inspection norms. This study examines the impact of various standard regimes on the two trading partners and explores if the benefit from a higher standard regime is worth the marginal effort. As the importing nation, US has four policy options – 1) a complete ban on mango trade, which was in application between 1989 and 2006; 2) Hot Water Treatment (HWT), the policy advocated by India; 3) nuclear irradiation, the policy favored by US and presently in force, and; 4) free trade, policy regime with no SPS standards in place. Welfare impact of mango trade on both, India and US, under all four different policy regimes is estimated using partial equilibrium framework with stylized microeconomic models for different components. The results suggest that policy choices of both the nations are consistent with their respective payoff estimates. However, if India undertakes to compensate the US for any losses from a policy change in favor of India, both the nations may reach a Kaldor-Hicks efficient outcome. A brief sensitivity analysis is performed, indicating that the developed north can afford to be more flexible in adopting SPS standards. This study also underscores that the impact of risks arising out of invasive species cannot be studied in terms of science alone but it has to be wedded to the economic implications.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: First version, 2011
Download Restriction: no

Paper provided by Indian Institute of Foreign Trade in its series Working Papers with number EC-11-05.

in new window

Length: 24 pages
Date of creation: May 2011
Handle: RePEc:ift:wpaper:1006
Contact details of provider: Postal:
B-21, Qutab Institutional Area, New Delhi

Phone: 91-11-6965124
Fax: 91-11-6853956
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. Surabhi Mittal, 2006. "Structural Shift in Demand for Food - Projections for 2020," Macroeconomics Working Papers 22223, East Asian Bureau of Economic Research.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ift:wpaper:1006. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (S. Balasubramanian)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.