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

Abstract

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 developed countries, SACs need to initiate NTBs frequently to fetch favourable
trade flows.