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Our work presents the new data and the evolution of agricultural trade SEMCs in a context of multilateralism while analyzing the impact of environmental policies and their heterogeneity on agricultural trade flows between SEMCs and their main trade partners.Using the theoretical gravity model developed by Anderson and Van Wincoop (2003) and Baier and Bergstrand (2007), we will calculate the potential of bilateral trade in the agricultural sector between SEMCs and their main trading partners (EU, Ukraine, Russia, Argentina, Brazil) over the period 2002-2014. Our choice fell on the market of fruits and vegetables.
The econometric analysis is in panel data because it makes it possible to take into account the influence of unobservable and specific characteristics of the pairs of partner countries and we apply the Poisson pseudo maximum-likelihood (PSML) estimator. Our model introduces key but often overlooked variables, such as relative distance or dummies for regional groups, and a proxy variable for environmental policy rigor. To this end, we use external trade statistics extracted from the United Nations Comtrade and Cepii databases. Other data from the FAOSTAT database and the World Development Indicators database were also used.
The special achievement of our work lies in employing an Agri-environmental policies' stringency proxy variable which has been computed in a previous work using the Partial frontier efficiency (orderalpha) window analysis with undesirable output.
The main results show that the greater the gap in terms of environmental policies' stringency between the reporter (exporter) and the partner (importer) country, the greater the fruits and vegetables' exports quantity is between these two countries. In other terms, less restrictive agri-environmental standards are a key factor for the development of the SEMCs' fruits and vegetables exports. This outcome reconfirms therefore the pollution haven hypothesis which is an extension of the traditional theory of international trade and which indicates that the standards tightening in the industrialized countries may lead the least developed countries to specialize in the production of "polluting goods".
