Standards and Trade: Background/results of the project Veena Jha

1
Standards and TradeBackground/results of the
projectVeena Jha
UNCTAD

• Geneva, 2-4 October 2002

2
Sectors
South Asia Fishery products Peanuts, rice, spices, tea Organic products
Central America Fishery products Poultry Organic products
Africa Fishery products Horticulture Organic products
3
Environmental requirements/SPS measures Key
questions

• Effects, both positive and negative, on exports
  from developing countries
• Constraints, costs of compliance
• Perceptions (protection/protectionism)
• Responses at national/regional levels
• Recommendations to mitigate adverse trade effects
  and strengthen capacities to respond to these
  standards
• (a) national/regional
• (b) bilateral/multilateral
• (c) multilateral trading system

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
Economic/developmental effects of SPS measures
and environmental standards

• Compliance costs
• Trade impacts
• Impacts on industry

7
Economic/developmental effects of SPS measures
and environmental standards

• Legislation
• Training
• Infrastructure
• Engagement in international negotiations

8
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

9
Africa
Pesticide residues Standards for maximum residue levels for pesticides
Packaging requirements Has created some concern
Eco-labelling May become more important in the cut flowers and fisheries sectors
Timber Exports may be affected by consumer boycotts and/or timber certification.
CITES Ivory trade
Montreal Protocol Methyl bromide, used in agriculture
10
Sectors/cases
Marine products Bangladesh, India, Pakistan HACCP EU import bans
Peanuts India Responding to aflatoxin standards
Mango pulp India Quality issues
Rice India, Pakistan Standards for pesticides residues
Spices India, Sri Lanka Dealing with aflatoxin standards / other SPS measures
Tea India Meeting standards on pesticides residues
11
Perceptions on Implementation of HACCP Standards
for fish

• 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)

12
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

13
Tea (1)

• It is alleged that in 1995, German limits of 0.01
  mg of tetradifon and 2 mg of ethion per kg of tea
  were imposed somewhat arbitrarily because of lack
  of data from India
• The Teekanne Darjeeling Gold brand of tea was
  rejected because it contained 0.24 mg of
  tetrafidon per kg
• No rejections in United Kingdom most Indian tea
  firms follow UK principles

14
Tea (2)

• Cost of testing required by Germany US 234 per
  analysis
• Indian standards are more stringent than ISO 3720
  standardans other countries standards, except
  Japan

15

• Costa Rica and the TED case
• Lack of enforcement capacity and reluctance of
  fishermen lead to non-compliance. Imported from
  the US at a cost of 300 each, 4 inch (10 cms.)
  TEDs were constantly obstructed by organic waste.
  
•  

16

• After the crisis, Costa Rica initiated formal
  procedures to seek a modification of the TEDs
  proportions. Two important studies were
  initiated in order to support this petition.
• Mid-2000 an increase in the escape holes of 2
  inches, for a maximum distance between deflection
  bars of 6 inches (15.2 cms).

17
COURSE OF ACTION TAKEN BY COSTA RICA

• Engagement in international agreements and
  certifications programs
• Enactment of national legislation
• Seeking approval by showing commitment to
  internationally accepted norms
• Seeking recognition of differing national
  circumstances that render US regulations
  inapplicable by issuing scientific reports on the
  issues concerned (substantial equivalence).
• The same pattern has been shown in the
  Turtle-Dolphin Dispute, the new US regulation on
  shark fins and swordfish.

18
THE HANDLING OF THE HACCP MEASURE

• During 1999 and 2000, the tuna processing
  companies invested US15 million in refurbishing,
  expansion and of course sanitary controls.
• National legislation requiring the HACCP.
• The HACCP team (INCOPESCA and ZED)
• Boats INCOPESCA and CANNEP are drafting a
  project to address this problem. They are
  identifying which ships are feeding processing
  plants that export to the EU.

19
Strenghtening capacities 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
Actions at multilateral level

• Transparent and participatory preparation of
  standards
• Trade rules