Accessible Requires Authentication Published by De Gruyter April 23, 2013

Is Food Security a New Tariff? Explaining Changes in Sanitary and Phytosanitary Regulations by World Trade Organization Members

Andrew G. Long, Justin J. Kastner and Raymond Kassatly
From the journal Global Economy Journal

Abstract: Scholars at the intersection of agricultural trade policy and health regulation have speculated that some governments, under the pretext of health protection, have adopted food safety and plant and animal health regulations to shield domestic farmers from foreign competition. In this paper, we investigate the relationship between trade protection for agriculture and the number of trade-restricting sanitary and phytosanitary (SPS) regulatory notifications issued by World Trade Organization (WTO) members. We construct an empirical model to determine the influence of agricultural protectionism, agricultural interest groups, consumer sentiment, and institutional capacity on changes to a government’s SPS rules. The findings suggest that governments’ adoption of trade-restricting sanitary and phytosanitary regulations are influenced by agricultural protectionism, even after controlling for consumer awareness and institutional capacity. The evidence suggests that health related trade policies are substituting for more traditional forms of agricultural protectionism.

Appendix: list of countries

  • Argentina

  • Australia

  • Bangladesh

  • Brazil

  • Bulgaria

  • Canada

  • Chile

  • China

  • Colombia

  • Colombia

  • Czech Republic

  • Dominican Republic

  • Egypt

  • European Union

  • Ghana

  • Hungary

  • Indonesia

  • Japan

  • Lithuania

  • Madagascar

  • Malaysia

  • Mexico

  • New Zealand

  • Norway

  • Pakistan

  • Philippines

  • Poland

  • Republic of Korea

  • Slovak Republic

  • South Africa

  • Sri Lanka

  • Switzerland

  • Tanzania

  • Thailand

  • United States

References

AndersonK.2009a. “Five Decades of Distortions to Agricultural Incentives.” In Distortions to Agricultural Incentives: A Global Perspective, 1955–2007, edited by K.Anderson, 364. Washington, DC: The World Bank and Palgrave Macmillan. Search in Google Scholar

AndersonK.2009b. “Distortions to Agricultural Versus Nonagricultural Producer Incentives.” Annual Review of Resource Economics1:5574. Search in Google Scholar

Bates, R. H.1987. Essays on the Political Economy of Rural Africa. Berkeley, CA: University of California Press. Search in Google Scholar

Bates, R. H.1990. “The Political Framework for Agricultural Policy Decisions.” In Agricultural Development in the Third World, edited by C.Eichner and J.Staatz, 154159. Baltimore, MD: Johns Hopkins University Press. Search in Google Scholar

Beck, T., G.Clark, A.Groff, P.Keefer, and P.Walsh. 2001. “New Tools in Comparative Political Economy: The Database of Political Institutions.” World Bank Economic Review15 (1):165176. Search in Google Scholar

Becker, G.1983. “A Theory of Competition among Pressure Groups for Political Influence.” Quarterly Journal of Economics98:371400. Search in Google Scholar

Beghin, J., and M.Kherallah. 1994. “Political Institutions and International Patterns of Agricultural Protection.” Review of Economics and Statistics76 (3):482489. Search in Google Scholar

Berry, W. D.1993.Understanding Regression Assumptions. London, UK: Sage. Search in Google Scholar

Brown, C., L.Lynch, and D.Zilberman. 2002. “The Economics of Controlling Insect-Transmitted Diseases.” American Journal of Agricultural Economics84 (2):279291. Search in Google Scholar

Calvin, L., and B.Krissoff. 1998. “Technical Barriers to Trade: A Case Study of Phytosanitary Barriers and US–Japanese Apple Trade.” Journal of Agricultural and Resource Economics23 (2):352366. Search in Google Scholar

Cash, J., J.Kastner, B.Anders, S.Timmons, and E.Helou. 2004. “SPS Notifications Tool.” http://frontier.k-state.edu. Search in Google Scholar

Chappell, H. W.1982. “Campaign Contributions and Congressional Voting: A Simultaneous Probit-Tobit Model.” Review of Economics and Statistics64:7783. Search in Google Scholar

Darby, M. R., and E.Karni. 1973. “Free Competition and the Optimal Amount of Fraud.” Journal of Law and Economics16 (1):6768. Search in Google Scholar

Davis, C. L.2003. Food Fights Over Free Trade: How International Institutions Promote Agricultural Trade Liberalization. Princeton, NJ: Princeton University Press. Search in Google Scholar

de Gorter, H.1983. “Agricultural Policies: A Study in Political Economy.” PhD thesis, University of California-Berkeley. Search in Google Scholar

de Gorter, H., and G. C.Rausser. 1989. “Endogenizing U.S. Milk Price Supports.” CUDARE Working Paper Series 504. Berkeley, CA: University of California at Berkeley, Department of Agricultural and Resource Economics and Policy. Search in Google Scholar

de Gorter, H., and J.Swinnen. 1995. “The Economic Polity of Farm Policy: Reply.” Journal of Agricultural and Resource Economics46:403414. Search in Google Scholar

de Gorter, H., and Y.Tsur. 1991. “Explaining Price Policy Bias in Agriculture: The Calculus of Support-Maximizing Politicians.” American Journal of Agricultural Economics72:131137. Search in Google Scholar

Downs, A.1957. An Economic Theory of Democracy. New York: Harper and Row. Search in Google Scholar

DPI. 2006. Database of Political Institutions. World Bank. Search in Google Scholar

Ewen, C., D.Todd, and C.Narrod. 2006. “Understanding the Links between Agriculture and Health, Food Safety, and Food Borne Diseases.” 2020 Vision for Food, Agriculture, and the Environment. Washington, DC: International Food Policy Research Institute, Focus 10, Brief 5. Search in Google Scholar

Ganiere, P., and W. S.Chern. 2004. “Consumer Acceptance of Genetically Modified Foods: A Profile of American Consumers.” Annual Meeting of the American Agricultural Economics Association, Denver, CO. Search in Google Scholar

Gardner, B. L.1987. “Causes of US Farm Commodity Programs.” Journal of Political Economy95:290310. Search in Google Scholar

Gignilliat, J. L.1961. “Pigs, Politics, and Protection: The European Boycott of American Pork, 1879–1891.” Agricultural History35:312. Search in Google Scholar

Grossman, G., and E.Helpman. 1994. “Protection for Sale.” American Economic Review84 (4):833850. Search in Google Scholar

Henson, S. J., R. J.Loader, A.Swinbank, M.Bredahl, and N.Lux. 2003. “The Impact of Sanitary and Phytosanitary Measures on Developing Countries.” Working paper, University of Reading. Search in Google Scholar

Honma, M., and Y.Hayami. 1986. “Structure of Agricultural Protection in Industrial Countries.” Journal of International Economics20 (12):115129. Search in Google Scholar

Inhwan, J.2008. “Determinants of Agricultural Protection in Industrial Countries: An Empirical Investigation.” Economics Bulletin17 (1):111. Search in Google Scholar

James, S., and K.Anderson. 1998. “On the Need for More Economic Assessment of Quarantine/SPS Policies.” Australian Journal of Agricultural and Resource Economics42 (4):525544. Search in Google Scholar

Josling, T., D.Roberts, and D.Orden. 2004. Food Regulation and Trade. Washington, DC: Institute for International Economics. Search in Google Scholar

Kastner, J., J.Ackleson, and J.Cash. 2005. “Doha and Development.” Commentary from Frontier. http://frontier.k-state.edu/ResearchAndAnalysis/Commentary/KastnerAckleson20051216.pdf. Search in Google Scholar

Kastner, J., and D.Powell. 2002. “The SPS Agreement: Addressing Historical Factors in Trade Dispute Resolution.” Agriculture and Human Values19 (4):283292. Search in Google Scholar

Kaufmann, D., A.Kraay, and P.Zoido-Lobaton. 1999. “Aggregating Governance Indicators.” Working Paper No. 2195, World Bank. Search in Google Scholar

KILM. 2007. Key Indicators of the Labor Market. Geneva, Switzerland: International Labor Organization. Search in Google Scholar

Kimenju, S. C., and H.de Groote. 2008. “Consumer Willingness to Pay for Genetically Modified Food in Kenya.” Agricultural Economics38:3546. Search in Google Scholar

Kono, D. Y.2006. “Optimal Obfuscation: Democracy and Trade Policy Transparency.” American Political Science Review100 (3):369384. Search in Google Scholar

Long, J. S.1997. Regression Models for Categorical and Limited Dependent Variables. London: Sage. Search in Google Scholar

Lutz, B. J., and J. M.Lutz. 2009. “Factory Farming and Potential Problems in International Trade.” Global Economy Journal9 (3):15245861, DOI: 10.2202/1524-5861.1518, September2009. Search in Google Scholar

Marshall, M., T. R.Gurr, and K.Jaggers. 2009. “POLITY™ IV PROJECT: Political Regime Characteristics and Transitions, 1800–2009.” Dataset Users’ Manual, Center for Systemic Peace. http://www.systemicpeace.org/polity/polity4.htm. Search in Google Scholar

Magee, S. P., W. A.Brock, and L.Young. 1989. Black Hole Tariffs and Endogenous Policy Theory: Political Economy in General Equilibrium. Cambridge: Cambridge University Press. Search in Google Scholar

Messerlin, P.2005. “Agricultural Liberalization in the Doha Round.” Global Economy Journal5 (4):15245861, DOI: 10.2202/1524-5861.1136, December2005. Search in Google Scholar

Moe, T. M.1980. The Organization of Interests: Incentives and the Internal Dynamics of Political Interest Groups. Chicago, IL: University of Chicago Press. Search in Google Scholar

Moy, G. G.1999. “Food Safety and Globalization of Trade: A Challenge to the Public Health Sector.” World Food Regulation Review8 (9):21. Search in Google Scholar

Nielson, D. L.2003. “Supplying Trade Reform: Political Institutions and Liberalization in Middle-Income Presidential Democracies.” American Journal of Political Science47 (3):470491. Search in Google Scholar

OECD. 1997. Regulatory Reform in the Agro-Food Sector (Regulatory Reform Volume I: Sectoral Studies). Paris: OECD. Search in Google Scholar

OECD. 2004a. The Impact of Regulations on Agro-Food Trade: The Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary (SPS) AgreementsParis: OECD. Search in Google Scholar

OECD. 2004b. OECD Agriculture Policies: At a Glance. Paris: OECD. Search in Google Scholar

OECD. 2008. Producer and Consumer Support Estimates. Paris: OECD Statistics. http://stats.oecd.org/wbos/Index.aspx?usercontext=sourceoecd. Search in Google Scholar

Olper, A.2001. “Determinants of Agricultural Protection: The Role of Democracy and Institutional Setting. Journal of Agricultural Economics52 (2):7592. Search in Google Scholar

Olson, M.1965. The Logical of Collective Action: Public Goods and the Theory of Groups. Cambridge, MA: Harvard University Press. Search in Google Scholar

Olson, M.1985. “Space, Agriculture, and Organization.” American Journal of Agricultural Economics67:928937. Search in Google Scholar

Olson, M.1990. “Agricultural Exploitation and Subsidization: There Is an Explanation.” Choices4:811. Search in Google Scholar

Orden, D., C.Narrod, and J. W.Glauber. 2001. “Least Trade-Restrictive SPS Policies: An Analytical Framework Is There But Questions Remain.” In The Economics of Quarantine and the SPS Agreement, edited by K.Anderson, C.McRaye and D.Wilson. Adelaide and Canberra, Australia: Center for International Economic Studies and AFFA, Biosecurity. Search in Google Scholar

Otsuki, J., J.Wilson, and M.Sewadeh. 2000. “Saving Two in a Billion: A Case Study to Quantify the Trade Effect of European Food Safety Standards on African Exports.” Working Paper, World Bank. Search in Google Scholar

Otsuki, J., J. S.Wilson, and M.Sewadeh. 2001. “Saving Two in a Billion: Quantifying the Trade Effect of European Food Safety Standards on African Exports.” Food Policy26:495514. Search in Google Scholar

Peterson, P.1995. The Price of Federalism. Washington, DC: Brookings. Search in Google Scholar

Snape, R., and D.Orden. 2001. “Integrating Import Risk Analysis and Trade Benefit Analysis.” In The Economics of Quarantine and the SPS Agreement, edited by K.Anderson, C.McRaye, and D.Wilson. Adelaide and Canberra, Australia: Center for International Economic Studies and AFFA, Biosecurity. Search in Google Scholar

Snyder, L. L.1945. “The American-German Pork Dispute, 1879–1891.” Journal of Modern History17:1628. Search in Google Scholar

Stern, R. M.2005. “Overview: Perspectives on the WTO Doha Development Agenda Multilateral Trade Negotiations.” Global Economy Journal5 (4):15245861, DOI: 10.2202/1524-5861.1141, December2005. Search in Google Scholar

Swinnen, J.,H.de Gorter, G.Rausser, and A.Barnerjee. 2000. “The Political Economy of Public Research Investment and Commodity Policies in Agriculture: An Empirical Study.” Agricultural Economics22:111122. Search in Google Scholar

Thies, C., and S.Porche. 2007. “The Political Economy of Agricultural Protection.” Journal of Politics69 (1):116127. Search in Google Scholar

Umali-Deininger, D., and M.Sur. 2007. “Food Safety in a Globalizing World: Opportunities and Challenges for India.” Agricultural Economics37 (1):135147. Search in Google Scholar

Wang, Z. G., Y.Mao, and F.Gale. 2008. “Chinese Consumer Demand for Food Safety Attributes in Milk Products.” Food Policy33 (1):2736. Search in Google Scholar

WDI. 2007. “World Development Indicators.” CD-ROM, World Bank. Search in Google Scholar

WGI. 2008. “World Governance Indicators.” http://info.worldbank.org/governance/wgi/index.asp, World Bank. Search in Google Scholar

World Trade Organization. 2012. “Members and Observers.” Accessed December2012. http://www.wto.int/english/thewto_e/whatis_e/tif_e/org6_e.htm”. Search in Google Scholar

WTO. 1998a. “Agreement on the Application of Sanitary and Phytosanitary Measures.” In The WTO Agreement Series: Sanitary and Phytosanitary Measures, edited by WTO, 2949. Geneva: World Trade Organization. Search in Google Scholar

WTO. 1998b. Sanitary and Phytosanitary Measures (The WTO Agreement Series). Geneva: WTO. Search in Google Scholar

WTO. 1999. Review of the Operation and Implementation of the Agreement on the Application of Sanitary and Phytosanitary Measures. Geneva: World Trade Organization Committee on Sanitary and Phytosanitary Measures. Search in Google Scholar

WTO. 2008a. SPS Agreement Training Module. Geneva: WTO. Search in Google Scholar

WTO. 2008b. “SPS Information Management System.” http://spsims.wto.org/Default.aspx. Geneva: WTO. Search in Google Scholar

Zusman, P.1976. “The Incorporation and Measurement of Social Power in Economic Models.” International Economic Review17:447462. Search in Google Scholar

  1. 1

    A thorough overview of the issues surrounding agricultural trade liberalization can be found in the Global Economy Journal, Volume 5, Issue 4 (Stern 2005).

  2. 2

    Food safety or animal health concerns have a lengthy history of effective use as protectionist tools (see, e.g., Gignilliat 1961, Snyder 1945).

  3. 3

    Appendix A lists the countries in the estimated sample for Model 1. Data limitations reduce our number of observations from the potential 1,530 for two reasons. First, the measures we employ to test our hypotheses and control for other important factors related to SPS notification activity (see below) are unavailable for WTO members in all years. Second, data for European countries are averaged after the point at which they entered the EU. Measures for fifteen EU countries are averaged between the years 1996–2003. After ten additional countries joined the EU in 2004, the data of the 25 members are averaged for the years 2004–2005.

  4. 4

    Each notification may include multiple changes to individual regulations. To the extent that our count of notifications differs from the number of regulatory changes a government implements, it will introduce random measurement error into our dependent variable and make coefficient estimates less efficient. Thus, if we find statistically significant relationships using notifications as a dependent variable, we can infer that the standard errors of the coefficients would decrease, improving the statistical significance of our independent (Berry 1993).

  5. 5

    We also estimated zero-inflated negative binomial regression models and found that we could not reject the null hypothesis in a Vuong test for Model 1 in Table 1. Thus, the negative binomial distribution is appropriate.

  6. 6

    As alternative measures of governments’ capacity to implement regulatory food safety and animal and plant health policies we estimate models substituting the institutional capacity index with the polity scale measuring democratic regime characteristics from the Polity IV project (Marshall, Gurr, and Jaggers 2009). We also substitute the natural log of Gross Domestic Product (in constant US dollars). In both cases, the results remain identical for all of the other variables included in Model 1, Table 1.

Published Online: 2013-04-23

© 2013 by Walter de Gruyter Berlin / Boston