Welfare Assessment of SPS Standards: An Empirical Study of Indo-US Mango Trade Case

Siddhartha Rastogi

Agricultural Economics Research Review, 2012, vol. 25, issue 2

Abstract: Sanitary and phytosanitary (SPS) standards under WTO’s ambit have gained prominence in recent years. However, due to mostly thin evidence, standards are set at prohibitively high levels, inducing sub-optimal outcomes. One such case is of mango trade between India and USA. The US banned import of Indian mangoes from 1989 to 2006 and permitted it thereafter under strict treatment and inspection standards. This study has examined the impact of various policy options on the two trading partners and has explored if the benefit from a higher standard regime is worth the marginal effort. Welfare impact of mango trade on India and US under four policy options (trade ban, nuclear irradiation, hot water treatment, and free trade) has been estimated using partial equilibrium framework with stylized microeconomic models. The study has suggested that policy choices of both the nations are consistent with their respective payoff estimates. However, if India undertakes to compensate the US for any losses due to an India-favouring policy, both the nations may gain more through trade; thereby, implying that there is social improvement if the gainers can fully compensate the losers and still be better off (Kaldor-Hicks efficient outcome).

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/137351/files/4-SK-Rastogi.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aerrae:137351

DOI: 10.22004/ag.econ.137351

Access Statistics for this article

More articles in Agricultural Economics Research Review from Agricultural Economics Research Association (India) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().