Agro-food exports, standards and trade agreements

1
Agro-food exports, standards and trade agreements

• Stefano Ponte
• Institute for International Studies
• Copenhagen
• spo_at_cdr.dk

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Introduction

• Trade is an important revenue base for developing
  countries
• Especially as aid flows slow down
• Still, low income countries account for only 3
  of income generated by exports
• Lowering traditional trade barriers Will this
  be enough?

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Global Value Chain (GVC) analysis and trade

• Trade not only between countries but also among
  (and within) firms
• Trade rules do not arise only from domestic
  regulation and international agreements
• Lead firms in GVCs set private rules that
  shape trade flows and market access

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GVC analysis and standards

• Standards are one of the mechanisms shaping trade
  rules and flows
• GVC analysis contributes new knowledge on
  private and voluntary standards set and
  enforced by lead firms or industry
  associations, NGOs etc.
• These may be even more demanding than mandatory
  standards
• Standards affect upgrading opportunities for
  developing countries

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Standards as a trade passport?

• Standards define whether a good is fit for
  trade
• Key issues for developing countries
• Who defines standards?
• Who decides the content?
• Who sets the measurement methods?
• Who pays for the costs of compliance, monitoring
  and verification?
• Who captures the benefits?

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Trends in agro-food standards (1)

• Increased food safety awareness
• Focus on health and diet
• Social and environmental concerns
• Authenticity of origin

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Trends in agro-food standards (2)

• Product differentiation
• Quality control
• Traceability (field-to-fork)
• Third-party certifications or auditing
• Larger number of standards
• More complex standards
• More stringent food safety standards

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Agro-food standards A simplified typology

• Mandatory
• Import regulation (i.e. food safety, geographic
  indications, labelling)
• Voluntary
• International standards (ISO, Codex, SA8000)
• Labels (organic, fair trade, eco-labels)
• Model codes of conduct (EUREP-GAP, ETI)
• Private
• Defined and owned by a company (supermarket chain
  quality standards)
• Considerable overlaps

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Lessons from case studies (1) Coffee

• Why is coffee interesting for analysing value
  chains, trade and standards?
• No protectionist element in standards
• Produced mainly in the South
• Low tariff barriers
• Yet, tariff escalation (roasted, instant)
• Proliferation of private standards specialty
  and sustainable coffees

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Specialty and sustainable coffee standards

• Issues of participation in the setting of
  standards
• Who benefits? Who pays?
• Different stories
• Specialty
• Fair trade
• Organic
• Shade-grown
• Mainstream initiatives on sustainability

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Lessons from case studies (2) Supermarket
standards for FFVs

• Extremely demanding
• Higher than import regulation on food safety
• Quality, maximum pesticide residues, ethical
  standards
• More functions demanded from exporters
• Some cases of upgrading
• From smallholders to commercial farms increasing
  concentration at production and export levels

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Challenges (1) Mandatory standards

• Better use of the dispute settlement system in
  the SPS Agreement
• Lenghty and demanding process
• Penalties based on punitive tariffs
• Not a practical way for developing cos
• SPS Committee as a forum of discussion

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Challenges (2) International standard setting

• SPS Agreement harmonisation
• Through Codex, IPPC, OIE
• Poor participation in international standard
  setting and revision
• Technical and financial assistance (not binding
  in SPS Agreement)
• Modest size of the Advisory Centre on WTO law

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Challeges (3)Voluntary and private standards

• Voluntary (sectoral) and private standards are
  often more stringent than public regulation
• Issues of participation, transparency
• Public pro-active strategies to help industry
  organisations
• Technical and facilitation support for firms and
  industries

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Key questions

• Are standards eroding the comparative advantage
  of developing countries?
• Are they marginalising smallholders and small and
  medium enterprises?
• Can standards be a tool for stimulating learning
  and a launch-pad for upgrading in developing
  countries?

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The role of research

• GVC analysis, trade and standards
• Access and participation
• Specificities of value chains
• Catalyst for industry-level debate
• Entry barrier AND opportunity for upgrading
• Costs and benefits of compliance
• Distributive impact