Agricultural trade from South Asia and the European SPS measures: a case study of RASFF
Student name: Ms Aditi Gupta
Guide: Dr Poornima Varma
Year of completion: 2012
Host Organisation: IIFT, New Delhi
Supervisor (Host Organisation): Dr Murali Kallummal
Abstract: The present study tries to analyse the impact of the European Union’s SPS measures on the
exports from South Asian countries The importance of the present study should be seen in the
light of the fact that international trade has been disciplined under the WTO Agreements and
the Doha Ministerial Mandate gave considerable emphasis on the reduction or elimination of
tariffs and non-tariff measures for enhancing the market access for developing countries.
While the applied MFN tariff rate has fallen from an average of 34.5 per cent in 1995 to 7
per cent in 2011 for the two important categories (the Developed and Developing) of the
WTO membership. Ever since, there has been a spurt in the standards/regulations (SPS
notifications) indicating the greater use of these non-tariff measures (NTMs) as a trade
policy instrument. This has led to an imbalance in market access (tariff vis-a-vis non-tariff
measures) in the global arena between the developed and developing countries.
There has been a considerable spurt in the two WTO-compatible NTMs, namely Sanitary and
Phytosanitary (SPS) measures and Technical Barriers to Trade (TBT) accounted for
standards/regulations close to 29,137 with a product coverage of 1,86,314 numbers. This has
led to an increase in national barriers in the developed countries while on the contrary the
standards/regulations in developing countries were mostly internationally harmonised
standards. The view that emerges from a number of studies is that, with falling tariffs, the
developed countries have been increasingly using these standards to provide protection to
domestic industries, under the garb of having higher domestic technological capabilities,
which facilitates these countries who continue to maintain these high standards especially
under the SPS and to a limited extent under the TBT agreements. It is imperative to analyse
the impact of SPS standards on developing countries keeping the given fact in mind.
The study uses both inventory based measures and a gravity model to analyse the impact of
the European SPS measure on the agricultural exports of South Asian countries. The analysis
undertaken in the study suggests that the incidence of the European standards have increased
considerably, this is especially true for the agricultural exports from South Asia.
Furthermore, the trend is particularly more discernible post 1999. The study finds evidence
for a possible trade distorting effect due to the increased EU targeting of the South-Asian
agricultural exports, by conducting a qualitative as well as an econometric test using a
gravity model.
