The effect of SPS agreements on the contractual choice in international fruit supply chains
Abstract
This study investigates how interfirm contracts are influenced by the SPS provisions within Trade Agreements and by the relational BtoB context in which transactions occur. Drawing on transaction cost theory and international trade research, we analyze the case of Chilean exports of apples. We measure the degree of completeness of SPS provisions of Trade Agreements signed by Chile and the share of direct exports to supermarkets. We found evidence of the double function of contracts: As a safeguard to protect transactions in uncertain institutional environments and as a coordination tool to adapt to changing market conditions and specific sanitary requirements.