Non-tariff measures (NTM) affecting spanish swine meat exports to China

Abstract

Spanish agrifood exports are viewed as an important engine promoting domestic economic growth. The meat sector and specifically swine meat outstands as one of the main exporting sectors, while meat exports to China have witnessed a significant increase since 2007. International trade is mostly affected by tariffs and non-tariff measures (NTMs). While tariffs are quite straightforward, NTMs are quite complex and there is a general perception that they are replacing tariffs as an alternative form of protectionism, and accordingly, are becoming increasingly relevant in trade negotiations. Our objective is to quantify the trade impact and calculate the ad-valorem equivalent (AVE) of the NTMs affecting Spanish swine meat exports to China. A gravity equation is estimated for this purpose using the Poisson Pseudo Maximum Likelihood (PPML) estimator. Our sample consists of a panel of 40 importers; 152 exporters; 18 HS6-digit products; and four years (2012-2015). The gravity equation is expanded to include, besides the usual economic, cultural and geographical explanatory variables, the frequency of NTMs. NTMs data comes from the Trade Analysis Information System (TRAINS) accessed through the World Integrated Trade Solutions (WITS) portal. We identify 19 NTM subcategories affecting Spanish swine meat exports to China: 16 SPS (Sanitary and Phytosanitary) and 3 TBT (Technical Barriers to Trade). Eight out of the nineteen NTMs categories are found to have a significant impact on trade, six of which have a trade restricting impact. In this sense, our results concur with the recent literature that posits both, a restricting and enhancing trade impact.