Retaliatory use of public standards in trade

Abstract

This research investigates the extent to which countries use public standards as a means of political retaliation in the international policy arena. We match World Trade Organization notifications of Sanitary and Phytosanitary (SPS) standards with SPS committee data on Specific Trade Concerns and annual, bilateral trade flows to test whether countries targeted with a public standard respond with a trade barrier of their own. We find that this type of retaliatory behavior exists for economically strategic goods. Our results suggest that about 1000 bilateral trade flows globally—or just over $11.8 billion in trade—were subject to retaliatory standards in 2015.