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Standards and Trade: Backgroundresults of the project Veena Jha

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Title: Standards and Trade: Backgroundresults of the project Veena Jha


1
Standards and TradeBackground/results of the
projectVeena Jha
UNCTAD
  • 2nd July 2002

2
The project
3
Reasons for undertaking the project
  • Benefits of liberalized agricultural trade were
    not reduced by disguised restrictions or other
    non-tariff barriers to trade
  • Developing countries feel that standards and SPS
    measures are as important as traditional WTO
    issues such as tariffs and quantitative
    restrictions.
  • Therefore, both the AoA and the SPS were
    negotiated as part of an agricultural package

4
Lessons learned
  • Importance of the standards examined in the
    market place?
  • Compliance costs and trade effects
  • Protection versus protectionism
  • Regional strategies

5
Potential problems
  • Lack of transparency
  • Complexity of SPS standards
  • Threshold limits
  • Standard takers instead of Standard Setters
  • Relevance of the standard to the production
    conditions of the exporting countries
  • Domestic Regulatory Problems

6
Potential problems
  • Standard takers instead of Standard Setters
  • Relevance of the standard to the production
    conditions of the exporting countries
  • Domestic Regulatory Problems
  • Other Capacity Problems

7
Economic/developmental effects of SPS measures
and environmental standards
  • Compliance costs
  • Trade impacts
  • Impacts on industry

8
Economic/developmental effects of SPS measures
and environmental standards
  • Legislation
  • Training
  • Infrastructure
  • Engagement in international negotiations

9
Can SPS measures and environmental standards be
protectionist?
  • Motivation
  • Protecting national producers against import
    competition?
  • Creating a market for conformity assessment?
  • Lowering prices?
  • Perceptions
  • Insufficient scientific evidence
  • Lack of coherence in standards

10
Developing countries
11
Fish and fisheries products
  • Automatic detention (United States)
  • Value of detained products from India etsimated
    at US 14 million or 15 of total exports in
    1996-1997
  • HACCP and other requirements
  • Import bans (EU)

12
Perceptions
  • Certain standards are not strictly relevant for
    product quality
  • Certain standards are too stringent given Indian
    fishing conditions
  • The legitimate objectives of standards could be
    met through less cumbersome and less costly
    procedures
  • Indian plants face more stringent standards than
    European plants (e.g. Indian plants have to
    undertake 62 tests to check water quality)

13
Implications
  • Fixed costs for adjustments between US 250,000
    and US 500,000 approved plants generally are
    large plants
  • Out of a total of over 400 establishments in
    India, only 84 processing units have been
    approved for exports to the EU
  • Many small companies were unable to continue
    exporting to the EU

14
Peanuts
  • Different testing procedures and conformity
    assessments required in different markets
  • New sampling plan (3 test Dutch code methodology)
    would result in higher rejection rate
  • Experts believe that 75 of the rejected lots
    would actually fall within the established
    tolerance limits

15
Peanuts
  • Europe 47 of the world imports of groundnuts
    and groundnut products
  • Multi-test plan will increase the cost of testing
    alone by US 4 million
  • UK Government estimates that compliance costs
    would average 8 of turnover
  • Increased costs of doing business in the EU
    market could be more than US 200 million
    according to JEFCA (Joint European Commission
    Food Association)

16
Mango pulp
  • Quality a major hurdle

17
Tea
  • Quality a major hurdle

18
Tea
  • Quality a major hurdle

19
National level
  • Awareness raising
  • National and regional standard setting
  • Technology, innovation and enterprise development
  • Small and medium sized enterprises
  • Branding and umbrella certification
  • Institutional changes

20
Multilateral level
  • Transparent and participatory preparation of
    standards
  • Trade rules
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