Trade Effects and Compliance Costs of Food Safety Regulations: the Case of China

This paper assessed the short run and long run impacts of food safety regulations on trade. Using aggregate trade data, the results showed that food safety regulations had a significantly negative effect on China's short run export, while had a positive effect on China's long run export in agricultural products. The costs of China's agri-food exporting enterprises in complying with foreign food safety regulations was investigated through two firm level surveys during the year of 2008 and 2009. The results showed that the total compliance costs increased over time. Building renovation, technological innovation, and testing equipments were major components of total compliance costs. The results of surveys also showed that compliance costs of domestic private enterprises were more than that of foreign-funded enterprises. The compliance costs of small-scale enterprises were more than that of big- and medium-scale enterprises.