An empirical analysis of the impact of EU's new food safety standards on china's tea export
2010
Yue, Ning | Guang, Hua | Sun, Lin | Wu, Linhai | Xu, Chuanlai
Stricter pesticide residue standards have severe negative impacts on the trade in developing countries, leading to a considerable decrease in the export of food and agricultural products from developing countries. For example, officials of the EU Health and Consumer Protection Bureau published the new EU Act 2000/42/EC on 30 June 30, 2000. This act amended the maximum residue levels (MRLs) for some pesticides. From 1 July 1, 2001 onwards, the EU implemented new 134 MRLs for pesticides in tea products. This measure above will limit market entry opportunities and will lead to a decrease in exports from these developing countries. This study aimed to utilise the Gravity Model in international trade, to empirically analyse the impact of the new EU Food Safety Act on the major tea exporters of the world. It is shown that the new EU Food Safety Act has had a significant impact on the major tea exporters of the world as shown in the decline in export volume. Quantitative analysis indicates that tea export has reduced by 61.6% following the MRL reduction to 5% significance level. In recent years the Chinese tea traded to EU supported the accuracy of this conclusion. Practically, China's tea exported to the EU did not drop fast as the theoretical result shows.
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