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THE ARAB QUALITY AND FOOD SAFETY CONFERENCE15-16 June 2006, Beirut
“QUALITY AND GLOBAL TRADE”
UNIDO Perspective
Gerardo PatacconiIDO, UNIDO Focal Point for UNIDO/WTO MoU and ISO/DEVCO
Trade Capacity Building [email protected]
www.unido.org
www.unido.org
Food scares and other security issues
Global, regional, national TBT/SPS regulations
Standards and Conformity Assessment infrastructure
Supply-capacity (quality, quantity, price) and competitiveness
global/regional value chains
UNIDO Global Approach
Emerging Quality and Safety issues
www.unido.org
I’ve got MAD……….and the World become CRAZY
about improving food quality and safety systems
Food scares and other security issues
SECURITYSECURITY: Risk of deliberate contamination, frauds and misuse of shipment
SAFETYSAFETY: Distribution of unsafe/adulterated Food products (to be withdrawn from the supply chain and timely and accurate information given to consumers)
EMERGING ISSUESEMERGING ISSUESEMERGING ISSUESEMERGING ISSUES
Focus on supply-chain and border Focus on supply-chain and border security:security:
• Bioterrorism Act) to protect the US from the threat of bioterrorism using the food chain.(Registration, US Agent, Prior Notice and Establishment and Maintenance of Records)
• Custom Trade Partnership Against Terrorism (C-TPAT)
• The Container Security initiative (CSI)• The 24-Hour Rule
Focus on supply-chain and food safetyFocus on supply-chain and food safety:• EU Food Law – Regulation (EC) 178/2002EU Food Law – Regulation (EC) 178/2002• Residual of pesticides• Labeling, • Standards/Technical Regulations• Conformity Assessment procedures• ………….
HIGH COST COST
www.unido.org
Standards and Conformity Assessment infrastructure
• Poor physical facilities/infrastructure
• Limited academic and research capabilities and technical/scientific know-how/skills
• Inefficient institutional set up (Standards and conformity assessment functions, when exist, are scatters among too many institutions)
• Early focus on mandatory standards and inspection
• Revenues generated could not be retained due to the public law status
www.unido.org
Standards and Conformity Assessment infrastructure
• Labs established even with donor support not sustainable
• Donation of equipment with poor planning, training, and lacking adequate local physical infrastructure/staff, absorbion capacity
• Political instability and conflicts,
• Lack of funding
• Lack of demand
• Low-level of manufacturing due to focus on commodities
• Exposed to barriers to trade especially SPS measures
www.unido.org
• Poor and uneven quality of local productsPoor and uneven quality of local products
• National quality infrastructure lacks credibility and tests and certificates by local laboratories not recognized in export countries.
• Inability of DCs to utilize preferential treatment/ market access concessions.
Standards and Conformity Assessment infrastructure
www.unido.org
High Risk of rejection of products in export markets due to lack of conformity (TBS and
SPS).
www.unido.org
Supply-capacity (quality, quantity, price) and competitiveness and integration in
regional/global value chains
World exports, 1980-2004 (US$ billion)
Global Trade Growth & Marginalisation
www.unido.org
Share of developing countries in global trade only 26%
Every 1% growth in Trade, LEADS TO one-half % Income increase
Over 75% of global trade is in manufactures (Industry the key)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
1980 1985 1990 1995 2000 2001 2002 2003 2004
bil
lio
n U
S$
World
Developed economies
Developing economies
Source: UNCTAD, 2005
LDCs
www.unido.org
Immediate Opportunities: Agro Food Exports
World and Developing country exports of fish,processed fruits & vegetables now exceed the combined value of exports of tropical crops: Cotton, Coffee, Sugar, Tobacco. (source: UN COMTRADE)
- 20%
+19%+11%
- 9%
Global Trade ChallengesTariffs reduced – Other Barriers remain
US$ 1.75 bn. exports from developing countries have been disrupted in 2004, due to SPS (food safety) non-compliance. While only US$ 53 mn. spent
by donors on SPS support. World Bank 2004, Steven Jaffee & Spencer Henson, Standards and Agro-Food Exports from Developing Countries – Rebalancing the Debate
COST OF COMPLIANCE TO FOOD SAFETY RULES - UNIDO Estimates
Shrimp exports to the EU - Testing and Compliance cost adds 2.8%
Enterprise Quality/safety set up cost – adds 5% to product cost
National Quality & Testing infrastructure – US$ 5.0 mn. to US$ 25.0 mn.
www.unido.org
“LDCs have neither the surplus of capacity of exportable products nor the
production capacity to take immediate advantage of new trade opportunities”
Kofi Annan - UN SG, Financial Times, 5 Mar. 2001
Quality systems in the Agri-Food-Industry
AFITA/WCCA 2004
Quality and safety and Beyond
Feed industry
farmer
processing
retail
GMP EurepGAPBQMAgri Confiance
- QM-Milch IKM KKM
DQG Q+S Certus
IKB Label Rouge
IFS EFSIS BRC
Stages of the food industry
-
Quality systems
www.unido.org
direct
the retail
ISO 22000supplier to
Integration Needs
Enterprise/ChainManagement
SystemISO 22000
HACCP
ISO9000
GHP
GMP 1...X
DifferentProduct Lines
ISO14001
BRC
Q+S
etc.
ABM
IFSSQF
EurepGAP
Traceability
UNIDO GLOBAL APPROACH: The UNIDO 3 Cs
“Countries must have marketable products for export”
COMPETITIVITY of productive capacities
“Products must conform to requirements of clients and markets”
CONFORMITY with standards
“Rules for trade applied and simplified cross border transactions”
CONNECTIVITY to markets
Compete Conform Connect
www.unido.org
25.4
8.8
29.9
19.4
39.8
117.6
15.9
9.5
21.323.2
26.9
9.4
0.6
16.4
11.7 15.311.6
0
10
20
30
40
2002 2003 2004
US$
milli
on
UNIDO FAO ITC UNCTAD UNDP WTO
UNIDO TCB projects 2005: US$ 64.6 Mn.Additional US$ 90.4 Mn. under negotiations
Source: UNIDO elaboration
www.unido.org
Total UNIDO TRTA Portfolio: OECD/WTO TCB Data Base
Situation Before
• Exporters not aware of impact of new Directive EC 178/2002 that could become a TBT as of 1st January 2005:
• Insufficient Insufficient national capability to assess the problem, its impact and to assess the problem, its impact and implement cost-effective solutions implement cost-effective solutions
• Lack of funding (institutions/enterprises)• Risk of Risk of loosing foreign markets by local suppliers and by local suppliers and
complementary industriescomplementary industries• Key priority Key priority exported products to be effected with high negative to be effected with high negative
impact impact not known
Case of EgyptTraceability of agro-industrial products for the European MarketTraceability of agro-industrial products for the European Market
• TRTA/CB Project elaborated jointly by UNIDO and the Ministry of Foreign Trade (MOFT) with support of Italian authorities
• TRTA/CB funded utilising a debt swap agreed between Italy and Egypt and linked to an Italian Initiative for trade facilitation called the “green corridor”
• Egyptian producers assisted and traceability scheme implemented and linkages with Italian/European Importers established
Situation TodaySituation Today
Funded in the framework of the “Debt-for-Development Swap” agreement (19.02.2001) by the Government of the Italian Republic and the Government of
the Arab Republic of Egypt
Case of EgyptTraceability of agro-industrial products for the European MarketTraceability of agro-industrial products for the European Market
• Assistance to Pack Houses (~100) and through them to over 5000 producers
• Available software assessed and 5 best options selected
• UNIDO Traceability manual developed and adopted
• Over 600 Egyptian trained in traceability and related issues
• Physical traceability assessed (farm to fork)
• Value chain analysis of selected products
• Mapping of pack Houses and production pattern
Situation TodaySituation Today
Case of EgyptTraceability of agro-industrial products for the European MarketTraceability of agro-industrial products for the European Market
• Financial scheme designed
• Applicants to traceability fund assessed (ICT infrastructure, traceability system SWAT, assistance in selection of technology, support in implementation)
• Physical traceability assessed (farm to fork)
• Assess sector technology upgrading needs
• Assistance planned for Plant Quarantine system
• Preparatory work for assistance to food manufacturers (also internal traceability)
Situation TodaySituation Today
Case of EgyptTraceability of agro-industrial products for the European MarketTraceability of agro-industrial products for the European Market