On the effects of bilateral agreements in world wine trade

Abstract

During the last decades there have been significant changes in trade regulations that are modifying the global trade of wine. The number of non-tariff measures (NTMs) adopted in the wine sector is relevant. Similarly, a large number of bilateral trade agreements have been adopted. Despite the regulation is heavy, the impact of these policy instruments on trade is not always clear, nor quantified at global scale. We investigate the effects that bilateral NTMs are showing on global imports of wine. In particular, we estimate a gravity model to explain how bilateral NTMs influence wine trade, and we disentangle these effects for different segments of the international market of wine. Our results suggest that bilateral NTMs tend to favour imports of wine. Differences emerge across market segments and types of regulations. In particular, the Technical Barriers to Trade favour (friction) bottled (bulk) wine; pre-shipment inspections enhance imports of bottled wine; the Sanitary and Phytosanitary Standards are the most trade-enhancing NTMs, regardless of the market segment.