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SPS measures and agricultural trade in BIMSTEC: Uantitative evidence from WTO notifications

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  • Himanshu Jaiswal

    (Indira Gandhi Institute of Development Research)

  • A. Ganesh Kumar

    (Indira Gandhi Institute of Development Research)

Abstract

Though the economy of the BIMSTEC members heavily depends on the agricultural sector, the intra-regional trade among them is below par because of several bottlenecks. One such bottleneck is the Sanitary and Phytosanitary (SPS) Measures adopted by the members of the BIMSTEC for agricultural products. This article investigates the agricultural trade patterns and the impact of SPS measures on BIMSTEC intra-trade. In a three-step analysis, we first do a demand and supply analysis for agricultural products at HS-6 digits using Michelaye's index. It shows that each member country has several high-potential commodities that can be traded with other member countries, but they are not. Second, we analyze the trends and patterns related to the SPS measures notified by the member countries to the WTO from 1st January 1996 to 31st May 2024. Several stylized facts have been illustrated. Finally, using these SPS statistics in a modified gravity model, we find that both the emergency and the regular SPS notifications significantly and negatively impact the agri-exports, and the former one are more harmful than the latter ones. The notifications, which end up as a trade dispute, hurt trade sentiments significantly. The notifications having objectives such as `Animal health' and `Food safety' are trade-distorting, while the notifications with multiple objectives containing objectives such as `Plant protection' and `Protect humans' are, in fact, trade-inducing.

Suggested Citation

  • Himanshu Jaiswal & A. Ganesh Kumar, 2025. "SPS measures and agricultural trade in BIMSTEC: Uantitative evidence from WTO notifications," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2025-013, Indira Gandhi Institute of Development Research, Mumbai, India.
    • Handle: RePEc:ind:igiwpp:2025-013
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    References listed on IDEAS

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    2. Anne-Célia Disdier & Susan F. Stone & Frank van Tongeren, 2019. "Trade and Economic Effects of IRC: Further Empirical Evidence from SPS and TBT Provisions," OECD Trade Policy Papers 224, OECD Publishing.
    3. Pramila Crivelli & Jasmin Groeschl, 2016. "The Impact of Sanitary and Phytosanitary Measures on Market Entry and Trade Flows," The World Economy, Wiley Blackwell, vol. 39(3), pages 444-473, March.
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    Keywords

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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