testing at each border crossing in a year.<sup>25</sup> Expected sampling rates were allowed to vary across products and across origin countries or regions. While the plan specified the expected numbers of samples to be taken, FVA border agents were to continue having discretion in choosing the shipments that were sampled in terms of meeting the plan. Border agents also retained the authority to deviate from the plan and sample from any shipment if the circumstances justify it. Hence, the sampling plan was not entirely prescriptive, though border agents were expected to follow the plan to the extent possible.

The specific aspects of the reform that we study relate to these changes. Concretely, the direct outcomes that were meant to be achieved by the reform were: 1) Focusing sampling activity on the shipment types that were most harmful, and 2) Reducing the number of shipments that were sampled for laboratory testing. It was expected that these reforms, if successfully undertaken, would reduce the costs for firms engaging in international trade. Economic theory suggests that if the costs of undertaking imports were reduced, the reform would lead to increases in international trade volumes. We are not in a position to study the effects of the reform on direct measures of trade costs, which are hard to capture in a single measure and would vary substantially across many dimensions of the traded products, the trading firms and modes of transportation. The availability of monthly trade data reporting import value with country and product detail allows us to study short run impacts of the broader reform, and of reduced sampling activity more specifically, on imports. The behavioral responses to the reform could occur through at least two channels: a) pre-announced reductions in sampling rates along with rational expectations by firms about the probability that they would be sampled generate more imports when sampling is less likely, or b) learning about the new lower sampling rates within the year and reasonably rapid updating of prior beliefs.<sup>26</sup> Delayed release onto the market that is associated with lengthy laboratory testing procedures is the primary source of trade costs that are avoided when sampling and testing activity is reduced.

# _Caveats_

As we detail in Section III and in Appendix A, the data on laboratory tests is weakest for imports of products covered by the license governing imports of food of non-animal origin and food contact materials. These products are the least likely of the FVA products to harm consumers. The reform was designed to have the most impact on sampling and testing activities in these products. Unfortunately, this means that most of our conclusions are limited analysis to the set of products with the fewest (planned) changes in sampling activity. This limitation should be kept in mind in interpreting our results.

> 25 The EU’s RASSF notifies governments about recent threats in the area of food safety and animal health. The 2015 annual report of RASSF is available here: https://ec.europa.eu/food/sites/food/files/safety/docs/rasff_annual_report_2015.pdf. 26 These channels are very difficult to pull apart, even with detailed shipment level data from a customs agency, which we lack here.

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