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The effect of product standards on agricultural exports from developing countries


  • Ferro, Esteban
  • Wilson, John S.
  • Otsuki, Tsunehiro


The authors create a standards restrictiveness index using newly available data on maximum residue levels of pesticides for 61 importing countries. The paper analyzes the impact that food safety standards have on international trade of agricultural products. The findings suggest that more restrictive standards are associated, on average, with a lower probability of observing trade. However, after controlling for sample selection and the proportion of exporting firms in a gravity model, the analysis finds that the effect of standards on trade intensity is indistinguishable from zero. This is consistent with the assumption that meeting stringent standards increases primarily the fixed costs of exporting. Once firms enter the market, however, standards do not impact the level of exports. The analysis also finds a greater marginal effect of BRICS (Brazil, Russia, India, China, and South Africa) standards on the probability of trade, relative to other countries'standards, keeping in mind however that on average BRICS standards are less restrictive. The analysis also suggests that exporters in low-income countries are more adversely affected by stricter standards.

Suggested Citation

  • Ferro, Esteban & Wilson, John S. & Otsuki, Tsunehiro, 2013. "The effect of product standards on agricultural exports from developing countries," Policy Research Working Paper Series 6518, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6518

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    References listed on IDEAS

    1. Chunlai Chen & Jun Yang & Christopher Findlay, 2008. "Measuring the Effect of Food Safety Standards on China’s Agricultural Exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(1), pages 83-106, April.
    2. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    3. John Wilson & Tsunehiro Otsuki & Baishali Majumdsar, 2003. "Balancing food safety and risk: do drug residue limits affect international trade in beef?," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 12(4), pages 377-402.
    4. Bo Xiong & John Beghin, 2017. "Does European aflatoxin regulation hurt groundnut exporters from Africa?," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 16, pages 287-307 World Scientific Publishing Co. Pte. Ltd..
    5. Keith Head & John Ries, 2001. "Increasing Returns versus National Product Differentiation as an Explanation for the Pattern of U.S.-Canada Trade," American Economic Review, American Economic Association, vol. 91(4), pages 858-876, September.
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    7. Alan Deardorff, 1998. "Determinants of Bilateral Trade: Does Gravity Work in a Neoclassical World?," NBER Chapters,in: The Regionalization of the World Economy, pages 7-32 National Bureau of Economic Research, Inc.
    8. Bo Xiong & John C. Beghin, 2017. "Stringent Maximum Residue Limits, Protectionism, and Competitiveness: The Cases of the US and Canada," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 12, pages 193-207 World Scientific Publishing Co. Pte. Ltd..
    9. Bergstrand, Jeffrey H, 1989. "The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 143-153, February.
    10. Hallak, Juan Carlos, 2006. "Product quality and the direction of trade," Journal of International Economics, Elsevier, vol. 68(1), pages 238-265, January.
    11. 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.
    12. Shang-Jin Wei, 1996. "Intra-National versus International Trade: How Stubborn are Nations in Global Integration?," NBER Working Papers 5531, National Bureau of Economic Research, Inc.
    13. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 441-487.
    14. Yuan Li & John C. Beghin, 2017. "Protectionism indices for non-tariff measures: An application to maximum residue levels," World Scientific Book Chapters,in: Nontariff Measures and International Trade, chapter 10, pages 167-178 World Scientific Publishing Co. Pte. Ltd..
    15. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-623, June.
    16. Leamer, Edward E, 1974. "The Commodity Composition of International Trade in Manufactures: An Empirical Analysis," Oxford Economic Papers, Oxford University Press, vol. 26(3), pages 350-374, November.
    17. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
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    Cited by:

    1. Kareem, Olayinka Idowu, 2016. "Food safety regulations and fish trade: Evidence from European Union-Africa trade relations," Journal of Commodity Markets, Elsevier, vol. 2(1), pages 18-25.
    2. Grant, Jason & Peterson, Everett & Ramniceanu, Radu, 2015. "Assessing the Impact of SPS Regulations on U.S. Fresh Fruit and Vegetable Exports," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 40(1), January.
    3. Unnevehr, Laurian J. & Ronchi, Loraine, 2014. "Food safety and developing markets: Research findings and research gaps:," IFPRI discussion papers 1376, International Food Policy Research Institute (IFPRI).
    4. Hejazi, Mina & Grant, Jason H. & Peterson, Everett, 2016. "Hidden Trade Costs? Maximum Residue Limits and US Exports to Trans-Atlantic and Trans-Pacific Trading Partners," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235847, Agricultural and Applied Economics Association.
    5. Foletti, Liliana & Shingal, Anirudh, 2014. "Stricter regulation boosts exports: the case of Maximum Residue Levels in pesticides," MPRA Paper 59895, University Library of Munich, Germany.
    6. Olayinka Idowu Kareem, 2014. "The European Union Sanitary and Phytosanitary Measures and Africa’s Exports," RSCAS Working Papers 2014/98, European University Institute.

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    Free Trade; Economic Theory&Research; Labor Policies; Food&Beverage Industry; Trade Law;

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