Competitive Conditions Affecting U.S. Exports of Medical Technology to Key Emerging Markets

The United States is the world’s largest supplier of medical technology (medtech). At the same time, growth in key emerging medtech markets - especially China, India, and Brazil - represent significant export opportunities for U.S. manufactures to further bolster their competitiveness. Yet, import restrictions arising from onerous regulatory procedures in these countries limit U.S. exports to these markets, particularly by extending the time to market for these goods to gain approval for sale. Using a gravity model approach, we estimate ad valorem equivalents (AVEs) for non-tariff measures (NTMs) in 167 countries and find that China, India, and Brazil all rank in the bottom half in terms of import competitiveness. Further, we run a second stage regression to identify specific factors that depress advanced medtech exports. Our results show that the estimated competitiveness of each country is tied to regulatory measures rather than demand factors. In particular, lengthy time-to-market and regulatory complexity significantly reduce a country’s import competitiveness. These findings suggest that the harmonization of China’s, India’s, and Brazil’s medtech standards to internationally accepted best practices would likely translate into greater U.S. exports to these markets. This paper is the first to quantify the impact of regulatory procedures on the import competitiveness of various global medtech markets