The Import Effects of the Entry Price System

Abstract

The European fruit and vegetable (F&V) trade regime is regulated by the Entry Price System (EPS), a nontariff measure on imported goods. We investigate the trade effects of the EPS by estimating a structural gravity model for the major European suppliers of apples, lemons, oranges, peaches, pears, table grapes, and tomatoes. We assess how imports react to EPS overshoots, and price dynamics. The EPS limits imports, but marked differences exist across products. The efficacy of the EPS is valid for all products; its effectiveness is found only for less perishable F&Vs.