Common Contracts

WTO Agreements on SPS and TBT: Implications for Imports of South Asia

February 20th, 2021

• Filed
  February 20th, 2021

Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary Agreement (SPS) initiated by the World Trade Organisation (WTO) have obstructed the world trade patterns; these agreements are conceptualized as non-tariff barriers (NTBs)that impede trade. WTO has bound its member states not to increase current tariffs, so member countries have the only option left is to deploy NTBs to control imports. In this research, the impact of TBT and SPS has been analyzed on imports of South Asian countries (SACs) from the rest of the world. The PPML estimation method is used to address zero-trade flows and overdispersion of data of South Asia based on the gravity model. The results depict that GDP of SACs and partners, exchange rate, tariff, distance, and contiguity are vital determinants; while TBT and SPS initiated are import restrictive; hence TBT, SPS, and tariff can be levied to administer the region’s trade deficit. Intra-regional trade is also affected by NTBs and tariffs. Similar to deve