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The effects of environmental regulations on developing countries: what are the concerns and what can be done


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Title: The effects of environmental regulations on developing countries: what are the concerns and what can be done

Public Symposium Challenges ahead on the Road to
Cancun 16-18th June 2003 WTO, Geneva
  • The effects of environmental regulations on
    developing countries what are the concerns and
    what can be done
  • Veena Jha

UNCTAD activities
  • UNCTAD/IDRC Project Standards and Trade
  • Final meeting Geneva, 16 and 17 May 2002
  • UNCTAD Expert Meeting on Environmental
    Requirements and International Trade
  • Geneva, 2-4 October 2002
  • Papers
  • http//

  • An overview paper
  • Regional scoping paper on South Asia (Bangladesh,
    India, Nepal and Sri Lanka)
  • Regional scoping paper on Central America (in
    particular Costa Rica)
  • Regional scoping paper on Eastern Africa (Kenya,
    Mozambique, the United Republic of Tanzania and
  • Scoping paper on organic agriculture (Costa Rica,
    India and Uganda)

Case studies South Asia
Fishery products India (other countries) HACCP standards
Bangladesh (Aug97) India (May97 Aug97) EU bans on exports of fishery products
Peanuts India Aflatoxin standards setting national standards and promoting indigenous development of technology
Rice India Standards for pesticide residues
Spices India, Sri Lanka Aflatoxin standards and other SPS measures
Tea India Meeting standards on pesticide residues
Organic food products India Standard-setting, certification, exports and institutional support
Case studies Central America
Poultry Costa Rica (and other Central American Effects of (a) the application of US SPS regulations concerning specific avian diseases (New castle disease) and (b) HACCP requirements on exports to the US and intra-Central American trade. Policy responses.
Shrimp Costa Rica US measures concerning imports of shrimp (turtle excluder devices).
Organic food products Costa Rica Standard-setting, certification, exports and institutional support
Case studies Africa
Fishery products Kenya, Mozambique, Tanzania and Uganda Regulation 91/493/EEC
Kenya, Tanzania and Uganda (1997) EU Import ban presence of salmonellae in nile perch from Lake Victoria
Kenya, Mozambique, Tanzania and Uganda (1997) EU Import ban outbreak of cholera
Kenya, Tanzania and Uganda (1999) EU Import ban fish poisoning in Lake Victoria
Peanuts Kenya Kenya  EU regulation on pesticide application (Maximum Residue Levels, MRLs)
Organic food products Uganda Standard-setting, certification, exports and institutional support
Expert Meeting on Environmental Requirements and
International Trade 2-4 October 2002
  • Environmental and health requirements (SPS
  • Chairmans summary (TD/B/COM.1/EM.19/3)
  • Commission on Trade (3-7 February 2003)

Environmental requirements
  • Standards (voluntary) and technical regulations
  • Labelling requirements (either mandatory or
    voluntary, such as eco-labelling),
  • Packaging
  • Product taxes and charges
  • Take-back obligations
  • Informal (non-government) requirements
  • Quotas and Non Automatic Licensing (to implement

Environmental requirements
  • Voluntary measures and private sector standards
    appear to be much more frequent than Government
    environmental product regulations. These include
  • Standards, codes and benchmarks
  • Supply chain management
  • There are only few international standards for
    environmental regulations

More stringent and complex
  • Environmental requirements are becoming more
  • growing evidence of harmful environmental effects
    of certain substances
  • changes in consumer preferences

More stringent and complex examples
  • Draft Strategy for a Future Chemicals Policy in
    the EU point to the imminent introduction of
    legislation that implements a precautionary
  • Stakeholders' Conference on the Commission's
    White Paper on the Strategy for a Future
    Chemicals Policy, Brussels, 2 April 2002

More stringent and complex examples
  • EU Directive 2000/53/EC on End-of-Life Vehicles
  • Aimed at sound management of scrapped vehicles
  • Implications for material selection, use of
    hazardous materials, the use of recyclable and/or
    bio-degradable material as well as design for
  • Japanese market, significant initiatives
  • The recycling-oriented economy framework
  • Launch of the Green Purchasing Act  

Implications for market access
  • Concerns of developing countries
  • Many standards perceived as overly stringent or
  • Frequent changes (never catch up)
  • Scientific justification insufficient
  • Standardes often fail to take into account the
    conditions of developing countries
  • Way a measure is implemented may discriminate
    (GATT/WTO dispute settlement mechanism)

Structural weaknesses
  • Lack of awareness
  • Management of information
  • Poor infrastructure
  • SMEs
  • Lack of finance
  • Lack of institutional capacity
  • Insufficient access to technology
  • Standard-takers rather than standard-setters

  • Most studies done by UNCTAD refer to
  • Agricultural and fisheries products
  • Leather and textiles
  • Forestry products
  • Electronics

Agricultural products
  • Drivers
  • Advancements in food safety sciences and growing
    public awareness of health safety issues
  • Following food scares, consumers expect
    retailers, through their purchasing practices, to
    supplement Government regulations for ensuring
    food safety.
  • Consumers and retailers are demanding more
    transparency, traceability and quality assurance
    in the food chain

Agricultural and fisheries products concerns
  • HACCP (which has environmental aspects) may be
    expensive for small producers
  • Aflatoxin compliance and testing may be very
    expensive (issues such as science and
  • MRL levels in food products too stringent for
    tropical conditions?
  • Developments in cut flowers
  • Fishery products large funds required to
    establish infrastructure and build institutions

Agricultural and fisheries products concerns
  • Cuba, honey and coffee lack of in-country
    technical capacity to verify compliance with the
    very low MRL limits required under EU regulation
  • Peru traditional foods are now subject to
    complex import regulations (EU regulation 258/97
    on Novel Food and Novel Food Ingredients) due
    simply to their exogeniety
  • Caribbean countries similar problems in
    exporting certain traditional food products to
    the US market, because MRL levels have not been

Leather and textiles, concerns
  • India
  • Bans on products containing traces of azo dyes,
    pentachlorophenol (PCP), other harmful amines and
    other substances
  • Eco-labels, based on life cycle analysis, buyers
    requirements and ISO standards
  • Animal rights issues (leather)
  • Pakistan
  • With phasing out quantitative restrictions,
    quality standards and environment-related
    requirements of buyers in developed countries
    become more stringent

Leather and textiles, implications
  • South Asian
  • Problems of SMEs
  • India
  • Substitutes 2.5 times more expensive than azo
  • Azo-free dyeing 15 to 20 per cent more expensive
  • High Costs of testing
  • Nepal
  • Weak regulatory and institutional framework to
    address problems faced by the export industry

Leather and textiles, national responses
  • India
  • The Government of India (GoI) has banned 112
    harmful azo dyes.
  • pro-active role of Pollution Control Boards
    norms for effluent treatment.
  • Dissemination of information and development of
  • The GoI has established a Technology Upgradation
    Fund, strengthened testing laboratories and been
    assisting textile units in securing certification

Leather and textiles, national responses
  • Pakistan
  • Pakistan National Environmental Quality Standards
    and Environmental Improvement Plans
  • Environment Technology Programme for Industry of
    the Federation of Pakistan Chamber of Commerce
    and Industries (FPCCI)
  • Nepal
  • Joint initiative with the Governments of Finland
    to improve environmental performance and promote
    environmental labelling in certain export

  • EU 
  • The Waste from Electrical and Electronic
    Equipment (WEEE) Directive
  • The Restriction of the use of certain Hazardous
    Substances in electrical and electronic equipment
    (RoHS) Directive
  • Integrated Product Policy (IPP)
  • Green Purchasing Law (GPL)
  • The Draft Strategy for a Future Chemicals Policy
  • Japan
  • Recycling regulations

Electronics implications
  • Since manufacturing of electronics components and
    other products are being increasingly outsourced
    to developing countries, companies and
    governments in these countries need to promote
    pro-active policies with regard to information
    gathering/management and product
  • Developing country companies should also seek
    cooperation with transnational corporations and
    obtain information from customers

  • Thailand
  • A high-level subcommittee set up under the
    National Committee for International Trade and
    Economic Policy to monitor the development of the
    EU WEEE and RoHS directives and propose a plan of
  • The subcommittee has commissioned a study to
    investigate the specific implications and
    adjustment requirements

Developmental aspects
  • Environmental requirements that adversely affect
    market access can have a negative effect on
    development and poverty alleviation
  • There can be longer term advantages from
    trade-induced shifts to more stringent standards
    in terms of greater resource efficiency, higher
    occupational safety, improved health conditions
    and less environmental pollution
  • There may be trade-offs especially in
    resource-constraint countries

Developmental aspects
  • SME development
  • WTO issues
  • Special and differential treatment (SD)
  • Technical assistance
  • Notification
  • Transfer of technology

Action at national level
  • Raise awareness (gov., private sector)
  • Dissemination of standard-related information,
    early warning system
  • Strengthen national and regional institutions to
    conduct risk analysis and testing monitor
    enforcement of standards and carry out
  • RD, innovation and enterprise development
  • Promote business partnerships
  • SMEs

Action international community and WTO
  • Bilateral cooperation
  • Participation and adequate time to adjust
  • Information dissemination
  • Promoting harmonization and mutual recognition
    of product standards and regulations based on
    equivalence in the WTO
  • Standards developed without involvement of
    producing and consuming countries should have a
    default assumption of being discriminatory to

Aid agencies
  • Strengthen capacities and assist developing
    countries to become standard setters
  • Assist developing countries in their
    participation in the work of international
    standardization bodies
  • National/regional cooperation
  • Cases where developing countries have
    successfully enhanced their participation?
  • Best practices on appropriate involvement of key
    trading partners in setting of environmental
    standards and regulations
  • Early warning systems

Technical assistance
  • Large range of programmes
  • Piecemeal?
  • Often emerges when developing countries face
    problems in meeting requirements of importing
  • Long-term
  • Link TC/CB to enhance capacities to comply with
    environmental standards with broader TC/CB to
    enhance export comptetiveness

Consultative mechanism
  • To support
  • Research on new trends in environmental
    requirements and likely implications for products
    of export interest to developing countries
  • Information management and dissemination
  • Pro-active adjustment strategies in exporting
    developing countries
  • Strategies for SMEs
  • Reliable statistical information to facilitate
    support policy-oriented research