New Concerns in International Business: The Application of Sanitary and Phytosanitary Policies

Abstract

In recent years, the debate over the application of non-tariff measures for environmental protection as a new form of disguised restriction on international trade by developed countries has become increasingly important. While tariffs have decreased over the decades, the increasing application of environmental-related requirements are a new factor that affects international business. These new requirements not only modify companies’ decision-making processes at national and international levels, but also within the firm. Hence, this paper proposes to examine the application of such measures by the European Union in the tea, coffee and yerba mate market, and their impact on exporting Latin-American firms for the 1995-2015 period and analyze whether there has been an improvement in their productive quality. For this aim, through a qualitative methodology, we carried out interviews with specialists of the field and surveys to Latin-American exporting companies. In this way, this analysis discusses with theorists if the application of measures related to environmental sustainability leads to ameliorate firms’ productive quality. Among the results, it is highlighted the fact that non-tariff measures — in particular sanitary and phytosanitary ones — have been used as trade barriers. However, complying with them allows exporting companies to develop environmental performance strategies and ultimately, it leads to a positive growth in their productive quality in the medium-long term.