an empirical assessment of sps regulations on u.s. fresh ... · • background on fresh fruit and...
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An Empirical Assessment of SPS Regulations on U.S. Fresh Fruit and
Vegetable Imports
Vuko Karov (Virginia Tech)
Jason Grant (Virginia Tech)
Everett Peterson (Virginia Tech)
Donna Roberts (USDA/ERS)
Funding for this research has been provided by the USDA/ERS Program of
Research on the Economics of Invasive Species Management (PRESIM)
Presented at the Annual Meeting of the
International Agricultural Trade Research Consortium
December 13-15, 2009
Ft. Myers, FL
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Outline
• Background on fresh fruit and vegetable imports
• Overview of U.S. regulations
• Empirical estimates of effects of phytosanitary
treatments on U.S. imports
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Trends in U.S. Fresh Fruit and Vegetable Imports
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0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
$0
$1
$2
$3
$4
$5
$6
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Fresh Fruit Imports (in billions of U.S. $)
Fresh Vegetable Imports (in billions of U.S. $)
Fresh Fruit Imports as a Share of Total Agricultural Imports
Fresh Vegetable Imports as a Share of Total Agricultural Imports
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U.S. Regulation of Fresh Fruit and Vegetable
Imports
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U.S. Fresh Fruit and
Vegetable Imports
Phytosanitary
Treatments
Irradiation
India-Mangoes
Geographical
Restrictions on
Destination
Mainland U.S.
vs
Hawaii
Thailand-
Pineapples
Geographical
Restrictions
on Origin
Areas/regions
recognized as
pest-free or
greenhouses
Israel-Tomatoes
Pre-clearance
Procedures
Phytosanitary
Treatment and
Inspection in the
country of origin
Peru-Mangoes
Systems
Approaches to
Pest Risk
Management
Combination
of pest-risk
mitigation
techniques
Mexico-Hass
Avocados
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Global Fresh Vegetable Export Volume Eligible
for Importation to the United States
5
0 10 20 30 40 50 60 70 80 90 100
Tomatoes
Sweet potatoes
Sweet corn
Pumpkins and squash
Potatoes
Onions
Mushrooms
Lettuce
Green beans
Garlic
Eggplants
Cucumbers
Carrots
Cabbages and other brassicas
Broccoli and cauliflower
Bell peppers
Asparagus
Artichokes
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U.S. Phytosanitary Treatments
• Methyl Bromide
• Water Treatment
• High Temperature Forced Air
• Pest Specific/Host Variable
• Irradiation
• Vapor Heat
• Cold Treatment
• Fumigation Plus Refrigeration of Fruits
• Cold Treatment Plus Fumigation of Fruits
• Quick Freeze
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Incidence of Phytosanitary Treatments
• Treatment requirements from APHIS Fresh Fruits and
Vegetables Import Manual
• Observed import flows
• Incidence of all treatments
• Fresh fruits: 21.7%
• Fresh vegetables: 8.0%
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Phytosanitary Treatments for Vegetables
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Phytosanitary Treatments for Fruits
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Gravity Model Specification
• Dependent variable: custom value
• Independent variables:
• Distance
• U.S. and exporter production
• Exchange rate
• Exporter share of global exports
• Free trade agreements
• Phytosanitary treatments
• Treatment-export share interaction
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Zero Trade Flows
• With product-line analysis, high number of zero trade
flows
• Reasons for zero trade flows
• No production in “exporting” country
• Country doesn’t export product
• Trade costs too high
• Exporting country not “eligible” to ship product to U.S.
• Cost of phytosanitary treatment too high
• 40% zero trade flows in sample
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Results
• Non-treatment independent variables
• Have expected signs
• Values statistically significant and robust across scenarios
• Phytosanitary treatments
• Negative and significant for treatment variable(s)
• Positive and significant interaction term with export share
• R2: 0.56 to 0.61
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Aggregate Effect of Treatments
-100.0
-80.0
-60.0
-40.0
-20.0
0.0
20.0
40.0
1% 10% 20% 30% 40% 50%
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Global Export Share
% C
hange in I
mport
s
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Aggregate Treatment Effects by Product
-100.0
-50.0
0.0
50.0
100.0
150.0
200.0
250.0
300.0
0% 10% 20% 30% 40%
Fruits
Vegetables
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Global Export Share
% C
hange in I
mport
s
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Effects of Cold Treatments
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Global Export Share
% C
hange in I
mport
s
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Effects of Methyl Bromide
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Global Export Share
% C
hange in I
mport
s
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Constant Treatment Effects
• Negative effects (fruits)
• Water: -52.7%
• Fumigation plus refrigeration of fruits: -97.7%
• Methyl bromide and cold treatment: -98.1%
• No effects:
• Pest specific/Host variable
• Heat – too few observations
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Treatment Rankings
• Least to most restrictive:
• Pest specific/Host variable
• Methyl bromide
• Water
• Cold
• Cold or fumigation plus refrigeration (fruits)
• Fumigation plus refrigeration (fruits)
• Methyl bromide and cold treatment (fruits)
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Summary
• Incidence of phytosanitary treatments relatively low
• Effects of phytosanitary treatments:
• Negative but may diminish as country’s exports increases
• Vary by treatment type
• Cold treatments, including combinations with methyl
bromide fumigation, are most trade restrictive
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