The economic impact of SPS measures on agricultural exports to China: an empirical analysis using the PPML method

Wood, Jacob, Wu, Jie, Li, Yilin, and Jang, Haejin (2017) The economic impact of SPS measures on agricultural exports to China: an empirical analysis using the PPML method. Socia Sciences, 6 (2).

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Since China first joined the World Trade Organization (WTO) in 2001, many countries around the world have sought to capitalize on lower tariff rates and China’s increasing demand for high quality agricultural products. However, as competitive pressures in its agricultural sector have intensified, the Chinese government has implemented other forms of protectionist measures. Known as non-tariff measures (NTMs), these policy initiatives have added another dimension to international trade activities that needs to be better understood. Using a set of variables clearly identified in academic literature, our paper analyzes the effect that sanitary and phytosanitary measures (SPS) have on New Zealand, U.S., Korean, and Japanese agricultural exports to China. To measure the effect that NTMs have on exports, we use an adapted version of the gravity model and the Poisson pseudo maximum likelihood method. The key findings from the empirical projection show that Chinese SPS measures have a negative, albeit insignificant effect on the sample as a whole. However, when looking at the individual countries, the SPS measures were seen to have a negative effect on Japan and the U.S., while from a Korean perspective, their impact was positive and significant. As part of a secondary analysis, it was interesting to note that the SPS measures had a positive effect on New Zealand’s exports before its free trade agreements (FTA) with China came into force. However, in the years since then, they were seen to have a negative impact.

Item ID: 52837
Item Type: Article (Research - C1)
ISSN: 2076-0760
Keywords: non-tariff barriers; sanitary and phytosanitary measures; China; agricultural exports; international trade
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

Funders: Chungnam National University Professor Research Fund for 2016
Date Deposited: 05 Apr 2018 01:25
FoR Codes: 38 ECONOMICS > 3801 Applied economics > 380110 International economics @ 100%
SEO Codes: 91 ECONOMIC FRAMEWORK > 9103 International Trade > 910303 Trade Policy @ 100%
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