Traore, O. Z. et Tamini, L. T. (2020). European's RASFF Border Rejections, African Countries's Reputation and Exports of Edible Vegetables and Fruits. CREATE-2020-11_WP_5
The low level and frequent occurrences of zero trade flows observed between African and European countries are attributable to the increasing number of import refusals in the context of the constraint imposed by the requirement to comply with the food safety standards of the countries of the Rapid Alert System for Food and Feed (RASFF). In this paper, we assess the effects of European countries' import refusals on African exports of edible vegetables and fruits from 2008 to 2018. We specifically estimate the average effects of the RASFF countries' border rejections on the extensive and intensive margins of African countries exports of edible vegetables and fruits. We use the border rejections data from the RASFF online database and export data on 45 African countries from the UN WITS database. We estimate the canonical version of the sectoral gravity equation of Anderson and Van Wincoop (2004) using the Poisson pseudo maximum likelihood (PPML) estimator of Silva et Tenreyro (2006) in association with the robust two-stage residual inclusion (2SRI) approach of Terza et al. (2008). We find that a single increase in the number of import refusals by a RASFF country in the current year leads to a decrease in the number of trade partners in Europe for African countries by 0.018 percent for edible vegetables and 0.143 percent for edible fruits. In addition, our results show that one additional import refusal decreases the export value of African countries' edible vegetables by 0.045 percent. However, we find that RASFF countries' refusal to import once in the current year leads to an increase in the export value of African countries' edible fruit by 0.126 percent. Furthermore, our results explicitly validate the hypothesis of the endogeneity of the number of import refusals and highlight both the direct and spillover effects of border rejections. The latter result means that an increase in the number of border rejections for a given product (for instance, a fresh fruit) in a given year leads to an increase in the number of border rejections for a product and its neighboring products (for instance, a fresh vegetable) in the next year.