The Impacts of Non-Tariff Measures on China's Tea Exports

Abstract

Tea is China's traditional export-earning agricultural product. For a long time, China's tea exports have occupied an extremely important position in the international market. With the further opening of the international agricultural product market and the increasingly fierce competition in the international tea market, China's tea exports are increasingly being affected by technical barriers.The purpose of this paper is to empirically analyze which factors are affecting Chinese green tea exports. In addition, there is a focus on the trade status of Chinese green tea in the EU market, Japan and the United States. To achieve this objective, this paper adopts a modern approach to gravity models, i.e. an approach which uses specifications based on micro-foundations. Specifically, The paper uses a specification which explicitly takes into account the nature of multilateral trade resistance (MTR). More specifically, estimators based on traditional panel methods (combined with the recommended structures of dummies) and Silva-Tenreyro's (2006) PPML estimator (also combined with dummies). The results show that the maximum residue limits(MRL) of pesticides in importing countries have significantly impacted the export of Chinese tea. The cultural effects such as the Language similarity have a positive...