Standards and Trade: Background/results of the project Veena Jha Geneva, 2-4 October 2002 UNCTAD

Standards and Trade:Background/results of the

projectVeena Jha

Geneva, 2-4 October 2002

UNCTAD

Sectors

South Asia Fishery productsPeanuts, rice, spices, teaOrganic products

Central America

Fishery products PoultryOrganic products

Africa Fishery products Horticulture Organic products

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

Lessons learned

• Importance of the standards examined in the market place?

• Compliance costs and trade effects• Protection versus protectionism

• Regional strategies

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

Economic/developmental effects of SPS measures and

environmental standards

• Compliance costs• Trade impacts• Impacts on industry

Economic/developmental effects of SPS measures and

environmental standards

• Legislation• Training• Infrastructure• Engagement in international

negotiations

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

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

Sectors/casesMarine products

Bangladesh, India, Pakistan

HACCPEU 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

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)

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

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

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

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.

• 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).

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.

THE HANDLING OF THE HACCP

MEASURE • During 1999 and 2000, the tuna

processing companies invested US$15 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.

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

Actions at multilateral level

• Transparent and participatory preparation of standards

• Trade rules