The Import Effects of the Entry Price System

Abstract

The complexity of the trade policy environment in the European fruit and vegetables market is mostly due to the Entry Price System, a non-tariff measure that regulates imports. We investigate the trade effects of the EPS by estimating a structural gravity model of trade flows from major European suppliers of apples, lemons, oranges, peaches, pears, table grapes and tomatoes. We assess how imports react to EPS overshoots, difference between import price and entry price threshold, and to level and volatility in Standard Import Values. The EPS limits imports of F&Vs, but differences exist across products. While the efficacy of the EPS is valid for all products, its effectiveness is greater for less perishable fruit and vegetables.

Keywords: Non-tariff measure; Price dynamics; Trade dynamics; EU agriculture; Fruit and vegetables