Impact of Standard Differences on Position in Agricultural Global Value Chains

Abstract

The development of agricultural global value chains (AGVCs) has led to the rapid development of intermediate goods trade, agricultural products need to cross between several countries, so that more different technical standards such as SPS (Agreement on the Application of Sanitary and Phytosanitary Measures) / TBT (Technical Barriers to Trade) between countries have been imposed by countries around the world with regard to the quality and safety of agricultural products, which lead the burden of trade costs increase prominent. This paper examines whether the extent to which SPS/TBT measures differ between countries in the agricultural sector affects their position in global value chains, based on the bilateral trade value added data in the OECD inter-country input-output database, combing the social network analysis and UNCTAD database from 2010 to 2018, measure the positions of countries in the agricultural global value chains and the standard differences of SPS/TBT among countries. We use the gravity model to empirically inspect the impact of the SPS/TBT standards heterogeneity between countries (regions) on the AGVCs position. We find: (1) structural differences in SPS/TBT standards among countries negatively affect the centrality of GVCs; (2) the negative impact of standards difference on the total and forward centrality is more serious than backward centrality; (3) The negative impact of the SPS/TBT difference is more pronounced in developing countries.