meat. As the number of SPS notifications as such is likely a conservative indicator of the
effects of SPS measures on trade flows [18] two indicators were chosen and tested for their
ability to reflect the increasing importance of standards on developing countries’ export
performance. First, rejections each country faced for its agricultural exports at the EU
and the US borders and, second, the investment in the food safety sector by the
Standard and Trade Development Facility (STDF), which aims at strengthening
developing countries’ SPS capacity.
Even though standards are only one aspect among multiple factors influencing trade
performance of developing countries we put them in the focus of the interpretation of
the analysis of the trade data.
The paper has the following structure. Overall, it is divided in two major blocks. The
first part describes the standards environment starting in section 2 with a general
overview of sanitary and phytosanitary measures and the WTO Agreement on Sanitary
and Phytosanitary Standards. Following, section 3 explores the development of SPS
measures in the agricultural trading environment looking at the development of SPS
notifications to the WTO, WTO trade concerns and WTO disputes related to SPS
measures as well as border rejections of the EU and the US and STDF investments in
various developing countries. The second major part of the paper is the empirical
exploration of developing countries’ export performance of their fruit/ vegetable and
meat products to OECD countries. Section 4 provides a description of the methodology
and the data. Section 5 starts with a brief description of general trends in agricultural
trade, followed by a detailed discussion of the results of the two cluster analysis. In
section 6, the results of the cluster analysis are related to border rejections and
investments of the STDF. In section 7 conclusions and a future outlook are drawn.
2 Sanitary and Phytosanitary Measures, what are they, why
are they imposed and how are they regulated?
Sanitary and phytosanitary measures are a sub category of non tariff barriers (NTB).1
They are applied as regulations and standards governing the sale of products into
national markets that have as their prima objective the correction of market inefficiencies
stemming from externalities associated with the production, distribution, and
consumption of these products [17:3]. SPS measures consequently have the objective to
prevent the entry of products into domestic markets which fail to meet required
standards and to protect domestic suppliers and consumers interests. The SPS
Agreement defines SPS measures as regulations adopted by a nation to protect human,
animal, or plant life and health from certain enumerated biological and toxicological
risks [17:5].2
SPS measures show a heterogeneous nature, as they consist of various laws, decrees,
regulations, requirements and procedures which are related to food safety. SPS measures
differ among countries because of different tasks, diets, income levels and perceptions
influencing the tolerance of a population towards food safety and agricultural health
risks [9].
The intention to create an international agreement mainly came from the general
development of international trade negotiations. As tariffs had to be lowered and the
use of other traditional trade barriers was eliminated there was a concern that technical
measures such as sanitary and phytosanitary measures could be used in order to replace
traditional protectionist measures [10]. As a consequence, their use and application was
regulated in the SPS Agreement. The agreement is now in force for developed countries
for 10 years, for developing countries for 8 years and for least developed countries for 5
years. The SPS Agreement allows governments to implement border measures relating to
human, animal and plant life or health on the level of sanitary and phytosanitary
protection it regards appropriate. Nevertheless, the agreement tries to minimize the
trade distorting effects of any SPS measure by encouraging countries to use international
standards as a base for their policies. 3 Two main principles of the SPS Agreement are 1)
1 Hillman (1996) defines non tariff barriers as all government measures, other than tariffs or
customs taxes which restrict or distort international trade between domestic and imported goods
and services.
2 All other measures of food regulations and standard are defined as technical barriers to trade
and regulated in the Agreement on Technical Barriers to Trade (TBT).
3 The international standard setting organizations are the Codex Alimentarius (on food safety), the
International Office of Epizootics (on animal health and zoonoses), and the Secretariat of the
3