International Economics

<< N°166

Issue Q2 2021  
The impact of services trade restrictiveness on food trade  
Amara Zongo
This paper examines the effects of restrictions in logistics, transportation, distribution, finance and other business sectors on food trade. We use a gravity model with panel data from 2014 to 2018 across 36 OECD countries, OECD indices of individual country restrictions and regulatory differences by country pair to capture the level of restrictions in these sectors. The results suggest that higher restrictions in the logistics and transport sector lead to lower exports of food commodities. Also, restrictions in the financial and other business sectors are associated with lower imports. Interestingly, restrictions in the distribution sector have positive and significant effects on both exports and imports of food products. The sectors most affected are food, live animals and perishable products (milk, eggs and meat). The regulatory disparity has a significant negative impact on food trade. This impact decreases when the exporter country is closed to service providers. The deregulation or harmonization of these measures would be highly beneficial to food trade.

Food trade ; Service sector ; Restrictions in services ; Gravity model ; Keywords
F13 ; F14 ; K23 ; Q17 ; JEL classification
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