Abstract
Purpose
This article tries to investigate the factors behind regional integration in BIMSTEC regarding agricultural trade. One such factor may be the sanitary and phytosanitary (SPS) measures adopted by the member countries. Hence, it is pertinent to look at their patterns and implications.
Design/methodology/approach
We analyze the trends and patterns related to the SPS measures notified by the member countries to the World Trade Organization (WTO) from 1996 to 2024. Finally, we use these SPS statistics in a modified gravity model to estimate the relationship between the frequency of SPS notifications and agricultural exports.
Findings
We find that both emergency and regular SPS notifications significantly and negatively impact agri-exports, with emergency notifications being more harmful. Notifications that result in trade disputes significantly hurt trade sentiments. Notifications with objectives such as “Animal health” and “Food safety” are trade-distorting, while those with multiple objectives, including “Plant protection” and “Protect humans,” may be trade-inducing.
Research limitations/implications
The gravity model treats the number of SPS notifications as an indicator of trade restrictiveness, whereas, in actuality, implementation and stringency vary widely. Endogeneity risk: higher trade volumes may trigger more SPS notifications (reverse causality). SPS notifications are proxy measures of actual trade restrictiveness. They don't necessarily capture enforcement intensity, compliance costs or informal barriers.
Originality/value
While SPS/trade literature is rich for WTO members globally, little work has been done on South and Southeast Asian sub-regional groupings. This study is among the first to systematically analyze SPS impacts in the BIMSTEC context, where agriculture dominates, but intra-regional trade remains underdeveloped. Instead of treating SPS notifications as a homogeneous barrier, the study distinguishes between emergency and regular notifications, as well as trade-distorting and trade-inducing objectives. This disaggregation adds nuance by highlighting how SPS measures can both constrain and facilitate trade.