This study attempts to estimate the effects of the sanitary and
phytosanitary (SPS) measures in terms of trade elasticity of regulations
and competitiveness of exports. In spite of the gener-alized
acknowledgment of growing liberalization of trade between countries,
there are still numerous obstacles to trade, more of the non-tariff type.
This study aims to contribute to the literature on quantifying the
eco-nomic impact of health and environmental regulations expressed in
the form of SPS measures on international trade in agro-food products,
by taking Indian seafood exports as a case study. The gravity analysis,
complemented with the constant market share (CMS) model, helped to
obtain an insight into the overall dynamics of the export markets, trade
flows and competitiveness of fish and fishery products (aggregate level),
shrimps and cephalopods. For the regulatory variable, the maxi-mum
residue limit (MRL) on cadmium in the model is used as an independent
variable. A detailed study on the micro level dynamics of Kerala seafood
export sector has been carried out, particularly to understand the industry
level changes experienced during the stringent food safety regime. The
results indicate that regulations on cadmium appear to be moderately
trade restrictive. At the same time, results are divergent at the disaggregate
level, which is significant from the point of view of trade policy. The
most important aspect of the existing chain in Kerala’s seafood sector is
the gradual disappearance of the independent preprocessing sector which
has been an important stakeholder of the seafood value chain in Kerala.
The preprocessing node of the value chain is getting integrated to the
processing sector causing a major restructuring of the existing value
chain.
Keywords: Competitiveness, Trade models, Seafood Industry, Value
Chain
JEL Classification: F14, F18, L15, Q17, Q1
