Measurement of the Impacts of the Technical Barriers to Trade on Vegetable Export of China: An Empirical Study Based on the Gravity Model

[a] Associate professor， PhD. of School of Political Science and Public Management， Southwest University， Chongqing， China.

Research areas； Public policy analysis； administration； economics； trade.*Corresponding author.

Supported by Humanities and Social Sciences Planning Fund in 2012 of Ministry of Education Program： Empirical Analysis and Countermeasures of Technical Barriers to Trade on China’s Exports of Agricultural Products （12YJA630042） and Southwest University： Doctoral Fund Program： Research on the Causes and Economic Effects of Technical Barriers to Trade （2070095）.

Received 17 August， 2013； accepted 14 October， 2013.

Abstract

With the residue limits of pesticides in vegetables as the indication， the present paper employs the gravity model to measure the impacts of the technical barriers to trade on vegetable export of China. The analysis shows that the residue limits of the pesticides in vegetables set by Japan， US and EU have apparent negative impacts on the vegetable export of China. The vegetable export of China decreases by 4.16% with the rise in the strictness of residue limits by 10%. On the other hand， to raise the strictness in residue limits of pesticides in vegetables in China has some positive impacts on the vegetable export of China. The reversed transmission of the affirmative list policy of Japan， despite its apparent short-term repressive impacts on the vegetable export of China， has positive impacts on the vegetable export of China as a whole to the US， European and Japanese markets.

Key words： The technical barriers to trade； The gravity model； The vegetable export

JIANG Ling （2013）. Measurement of the Impacts of the Technical Barriers to Trade on Vegetable Export of China： An Empirical Study Based on the Gravity Model. International Business and Management， 7（2）， 20-25. Available from： http：//www.cscanada. net/index.php/ibm/article/view/j.ibm.1923842820130702.1055 DOI： http：//dx.doi.org/10.3968/j.ibm.1923842820130702.1055

INTRODUCTION

With the development of economic globalization， and on the condition of WTO’s strictly limiting tariffs and quotas， anti-dumping， countervailing and other traditional nontariff measures， to protect human and animal and plant health and environmental resources， technical barriers to trade （TBT）1， because of its characteristics such as strong pertinence， good concealment， flexibility， are increasingly become the main policy tools and means in the world especially in the developed countries to make the trade protection， which has a far-reaching influence on international trade. In recent years， affected by various factors， China’s export of agricultural products has become one of the most serious industries being limited by technical barriers to trade. TBT has caused great negative effect to China’s agricultural product export and domestic agricultural production.

China is the world’s main vegetable production and export country. In recent years its rapid export growth has become the second major categories of products. The main markets of China’s vegetable export are Japan， the United States， Europe and other developed countries and regions， which set higher levels of technical barriers to trade， so vegetable products also encounter more serious technical barriers to trade. According to the examples and data， in recent years， China’s vegetable products are hindered by technical barriers to trade， pesticide residues， microbial pollution and poor quality being the main reasons. And excessive pesticide residue account for 25% 2， which is our main concern. This article， taking American， European vegetable pesticide residue limits as a metric， is to measure TBT’s effect on China’s vegetable export.

1. SELECTION OF THE GRAVITY MODEL

All the time， Japan is the biggest market of China’s vegetable export， but also the most stringent country setting technical barriers to trade for China’s vegetables， especially the affirmative list policy carried out since 2006 has made China’s vegetable export to Japan in a more severe situation. Some studies have revealed that the affirmative list policy has caused in a short period of time great negative impact on China’s vegetable export to Japan， but the research on this policy’s influences on the overall situation of China’s vegetable export in a relatively long period is short. In order to reflect the whole effects of the affirmative list policy on China’s vegetable export， we add dummy variables to it on the basis on of Model 1， so we have Model 2 shown as type （6）：

4.2 Related Discussions

From the regression results， the symbol of each interpretation variable and the expected symbol is basically the same， and most of them reach a significantly higher level. The whole of the equation and every coefficient are tested by F. The determination coefficient of the equation R2 reaching 0.99， that is， the goodness of fit in the model is very good.

The specific analysis of the regression results is shown as the following：

（a） The importing country’s vegetable pesticide residue limits standards have obvious inhibitory effect on China’s vegetable export. In Model 1， at the significant level of 1%， the regression coefficient of the importing country’s standard is -0.416， meaning that the number of the importing country’s standards increases every 10%， China’s vegetable export will reduce by 4.16%； and if you take into account the impact of affirmative list policy， the regression coefficient will be -0.422. Thus the increase of the importing country’s whole number of pesticide residue limits standard will have a greater inhibitory effect on China’s exporting vegetables， and this is consistent with the real situation.

（b） China’s vegetable pesticide residue limits standards have a certain role in promoting its vegetable export. In Model 1 and Model 2， at the significant level of 1%， the regression coefficients of China’s vegetable pesticide residue limits standard are respectively 0.183 and 0.181， both being positive， indicating that improving China’s vegetable pesticide residue limits standards and strengthening the measures to control the pesticide residues in vegetables can improve China’s vegetable quality， and that passing the secure and reliable information of China’s product quality to the importing countries’ consumers is beneficial to China’s vegetable products entering into Japan， US and Europe.

（c） The per capita GNP of both importing and exporting countries has an obvious promoting effect on China’s vegetable export. In Model 1， at the significant level of 1%， the regression coefficient of importing country’s per capita GNP is 0.780， meaning that the importing country’s per capita GNP rise every 10%， that is， the importing country’s domestic demand increases every 10%， China’s vegetable exports will increase by 7.80%； and the regression coefficient of China’s per capita GNP is 0.626， meaning that China’s GNP per capita rise every 10%， China’s vegetable exports will increase 6.26%. Considering the affirmative list policy， the per capita GNP of the both importing and exporting countries still have significant promotion in China’s vegetable exports. In short， in a period of economic prosperity， the development of bilateral trade between the two sides will be better， and the economic downturn is not conducive to the development of trade.

（d） The geographical distance of both sides has a negative effect on China’s vegetable export. In Model 1 and Model 2， the coefficients geographical distance are-0.951 and -0.955， showing that shortening the geographic distance of both sides can reduce the trade cost and promote bilateral trade.

（e） On the whole， the affirmative list policy has a positive effect on China’s vegetable exports， its regression coefficient being 0.034. The reason may lie in： a） while the affirmative list policy has a significant short-term inhibition effect on China’s vegetable exports to Japan， China’s export enterprises increase the development of American and European markets， reducing dependence on the Japanese market. From the actual situation， compared with 2006， China’s vegetable exports to Japan in the years of 2007， 2008， 2009 had a negative growth rate， while exports to Europe and the United States had bigger growth. b） In the long term， the affirmative list policy may force the vegetable production and export enterprises in China to strengthen management， reduce pesticide residues， so as to improve the international competitiveness of exporting agricultural products and promote the export. From the results of the models， the variable of the regression coefficient in the affirmative list policy has not achieved 10%， its long-term effect deserves our further study.

C O N C L U S I O N S A N D P O L I C Y RECOMMENDATIONS

The results ofdata analysis show that： the vegetable pesticide residue limits standards of Japan， America and Europe have a more significant negative impact on China’s exports of vegetables. The more the number of the standards， the larger its negative impact； while promoting China’s vegetable pesticide residue limits standards has a certain role in China’s vegetable export； the Japanese affirmative list policy has a significant shortterm inhibition effect on China’s vegetable exports to Japan， but its forcing mechanism can prompt China’s export enterprises to increase the development efforts of European and American markets， and by strengthening management， reducing pesticide residues， so as to improve the international competitiveness of exporting agricultural products， and to promote the export.

According to the above conclusions， this paper holds that to deal with technical barriers to trade， China’s vegetable export must focus on the control of pesticide residues.

（a） Pay close attention to the changes in the technology standards of the importing and exporting countries， perfect tracking and evaluating the mechanisms， release timely the relevant information； comply to the scientific standards timely and actively， and defense the unreasonable demands positively and actively.

（b） Strengthen the construction of the technical regulations and standard systems of vegetable products， improving the adoption rate of international standards and promote the internationalization of China’s standards.

（c） Optimize the environment of agricultural production， strengthen the management of agricultural inputs， and establish the agricultural product quality safety traceability system “from field to table” to enhance the level of product quality and safety.

（d） Implement the export market diversification strategy， consolidate the original Japanese， European， American and other traditional markets， at the same time， develop the efforts in ASEAN， the Middle East， Central Asia， Russia and other peripheral markets， and actively establish a stable trade channels with these markets， not only having the advantages of distance， but also moderately alleviating the risk of too concentrated export markets.

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