US phytosanitary restrictions: the forgotten non-tariff barrier
| Published date | 21 March 2016 |
| DOI | https://doi.org/10.1108/JITLP-10-2015-0027 |
| Pages | 2-27 |
| Date | 21 March 2016 |
| Author | Marie-Agnes Jouanjean,Jean-Christophe Maur,Ben Shepherd |
| Subject Matter | Strategy,International business,International business law,Economics,International economics,International trade |
US phytosanitary restrictions:
the forgotten non-tariff barrier
Marie-Agnes Jouanjean
Overseas Development Institute, London, UK
Jean-Christophe Maur
World Bank, Washington, DC, USA, and
Ben Shepherd
Developing Trade Consultants, New York, New York, USA
Abstract
Purpose – This paper aims to provide new evidence that the US phytosanitary regime is associated
with a restrictive market access environment for fruit and vegetable products. One chief reason seems
to be that the US regime uses a positive list approach, under which only authorized countries can export.
Design/methodology/approach – The methodology of the paper is primarily qualitative. This
paper reviews the US sanitary and phytosanitary measures (SPS) system and its scope for use to protect
markets, in addition to protecting life and health. The approach is institutional and political economic.
Findings – For most products, only a portion of global production is authorized for export to the USA.
Even among authorized countries, only a small proportion is actually exported. As a result, the number
of countries exporting fresh fruit and vegetables to the USA is far lower than those exporting to
countries like the EU and Canada, but it is on a par with markets known to be restrictive in this area,
such as Australia and Japan. Using a data set of fruit and vegetable market access and political
contributions, this paper also provides evidence showing that domestic political economy
considerations may inuence the decision to grant market access to foreign producers.
Originality/value – The US SPS system has not previously been analyzed in this way, and the
distinction between negative and positive list approaches is highlighted in terms of its implications for
third-party exporters. Similarly, the analysis of political contributions is novel and suggestive of an
important dynamic at work in the determination of the US policy.
Keywords International trade, Trade policy, Political economy of trade policy, Standards, SPS,
and TBT
Paper type Research paper
1. Introduction
Sanitary and phytosanitary measures (SPS) present signicant obstacles to agricultural
exporters, particularly to small producers in developing countries. Although standards
in importing markets like the European Union and the USA can act as catalysts for
production and supply chain upgrading in poorer countries (Maertens and Swinnen,
2009), the adaptation costs involved, including notably large xed costs, can be
substantial and may exceed the capacity of some producers (Henson and Jaffee, 2004).
JEL classication – F13, F15, O24
The authors are grateful to John Beghin for comments on a previous draft. The ndings,
interpretations and conclusions expressed in this paper are entirely those of the authors. They do
not represent the view of the World Bank, its Executive Directors or the countries they represent.
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1477-0024.htm
JITLP
15,1
2
Received 22 October 2015
Accepted 26 October 2015
Journalof International Trade Law
andPolicy
Vol.15 No. 1, 2016
pp.2-27
©Emerald Group Publishing Limited
1477-0024
DOI 10.1108/JITLP-10-2015-0027
Producers are increasingly facing the challenges posed by standards in importing
markets, particularly SPS measures. Market access issues posed by standards are
clearly acknowledged in the World Trade Organization (WTO) framework, in particular
the SPS Agreement and the Agreement on Technical Barriers to Trade, but negotiations
on agricultural market access keep focusing on tariffs and more traditional non-tariff
barriers such as subsidies. Not unlike policy, analysis is also lagging behind the market
realities: data constraints have made it difcult for researchers to shed more than partial
light on the mechanisms at work in the SPS area, and the effects they have on developing
country exporters. SPS measures are complex, often product-rm- and process-specic
and non-transparent. They remain difcult to grasp for non-specialists, including trade
policymakers and analysts.
Unlike traditional instruments of trade policy, SPS measures are not usually designed to
restrict trade. Rather, they aim to meet legitimate health and plant protection objectives,
which complicate the task of disentangling acceptable regulatory stances from possibly
protectionist ones. To date, the main concern in this regard has been on human health
impacts (Otsuki et al., 2001), probably because they resonate more in public policy debates
than does the protection of plants from pests and pathogens[1]. Plant pest outbreaks have a
direct impact on the environment and on producers’ income, who, in developed economies,
only represent up to 1 or 2 per cent of the population. Food safety outbreaks are direct threats
to consumers’ well-being and even sometimes to their lives, but pest outbreaks have a much
more indirect effect. Yet, each objective – the protection of health and of plants – requires a
different set of measures, and both potentially have trade impacts. For instance, a survey of
Guatemalan exporters[2] of non-traditional agricultural exports[3] showed that they were
much more afraid of pest outbreaks resulting in import bans in the USA than of import
refusals from the Food and Drug Administration (FDA) based on food safety parameters.
This is the focus of this paper: SPS measures designed to preserve plant health by preventing
the spread of pests – so-called phytosanitary measures – and more specically the
mechanisms that can give rise to market access restrictions in the USA.
A further issue is that, unlike traditional trade measures like tariffs, SPS measures
are implemented very differently, and in ad hoc ways, across destination markets, even
in cases where regulatory objectives might actually be quite close. Exporters with
limited supply capacity and ability to explore different markets have to make choices
about which market they should target. Differences across markets regarding
conditions of access are relatively difcult to assess, resulting in uncertainty for
prospective entrants. Reliance on a small number of geographical destinations also
places producers at a particular risk of adverse demand shocks. It is to be expected that
differences in enforcement, and beyond that differences in enforcement capacity,
translate also into differences in market assess costs, some of which are xed sunk costs.
This is the beach head effect posited by Baldwin (1988). Recent attempts in the empirical
literature to draw measurable comparisons across markets conrm this suspicion (Kee
et al., 2009).
In this paper, we focus on the US system of phytosanitary measures, the compliance
which determines the right to export to the USA from a given geographical origin. This
system is complex, and this can have profound implications for developing country
exporters, as the outcome is often that market access is precluded altogether. For many
exporters, these phytosanitary requirements are a prohibitive non-tariff barrier. Most
relevant is the “positive list” approach used by the USA, in which only those countries
3
US
phytosanitary
restrictions
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