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Standards and Agricultural Exports of Developing Countries: Case of South Asia

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Title: Standards and Agricultural Exports of Developing Countries: Case of South Asia


1
Standards and Agricultural Exports of Developing
Countries Case of South Asia
Sachin Chaturvedi
Session on Standards and Market Access Cancun
Trade and Development Symposium (CTDS) 11th
September 2003, Cancun
2
Trade and Environment since Doha WTO
Ministerial Conference at Doha directed that
negotiations on issues relating to SPS measures
should addressed on priority basis. The
Committee on Trade and Environment (CTE) was
instructed to give particular attention to the
effect of environmental measures on market access
and trade This has become relevant in light
of the fact that the past decade has seen a
global proliferation of environment and health
related standards along with a rise in the trade
in environmentally sensitive goods Since
the inception of WTO some 3700 notifications have
been received and almost 18 per cent of them
are related to environment.
3
Trade and Environment Emerging
Issues Harmonisation of International
Standards Environmental Standards -
Precautionary/Protectionist - Food Safety
Regulations - Labelling Requirements -
Quality Standards National Standards and Global
Standard Setting Process Stringent
Environmental Regulations force manufacturers of
pollution-intensive products overseas. It is
feared that differences in environmental
regulations across the globe is leading to
relocation of industries
4
SPS Agreement Concerns or Protectionism!
Sanitary and Phytosanitary (SPS) measures are
requirements imposed by governments to ensure
the safety of products for human on animal
consumption, or to protect the environment
(plant life). Most governments establish
minimum standards that products, plants on
animals must meet in order to be allowed to enter
their territory. In early nineties these
differences have become so stringent that they
restrict imports to a great extent. Accordingly
the concept has expanded on lines of
Precautionary Measures to cover regulations
and procedures, including product criteria
process and production methods testing
inspection certification and other risk
assessment methods.
5
SPS Agreement Concerns or Protectionism!
The Agreement also has a provision for
recognition. WTO members must accept the SPS
measures of other member countries as equivalent
even if they differ from their own. WTO
encourages bilateral or multilateral agreements
on recognition and the equivalence of specified
SPS measures. The Committee on Sanitary and
Phytosanitary Measures may grant developing
countries specified, time-limited exceptions in
whole or in part from meeting the requirements
of the agreement. Least developed country
members may delay applications of the provisions
of the agreement.
6
Difference between SPS and TBT
SPS TBT Deviation from MFN ? ? Deviation from
International Standards ? ? Negative Trade
Effect ? ? Economic Factors considered ?
? Adoption even without scientific evidence ? ?
7
G77/ Perez-Guerrero Trust Fund (PGTF) Research
Project on Impact of Enhancing Environmental
Standards on International Trade of South Asian
Countries
The project was being conducted through a
network of institutions in South Asia led by
RIS. Bangladesh Institute of Development
Studies (BIDS), Dhaka, Bangladesh Sustainable
Development Policy Institute (SDPI) Islamabad,
Pakistan. Nepal Forum of Environmental
Journalist, Kathmandu, Nepal. Institute of
Policy Studies, Colombo, Sri Lanka Shernbtse
College, Kanlung, Bhutan
8
What are Environment related Trade Barriers
(ETBs)? Trade Restriction with Consideration
for Protection of - Plant Health -
Wildlife - Animal Health - Human Health -
Human Safety Thus, Major issue of concern is
that the distinction between environmental,
health and quality standards is gradually
becoming blurred
9
Measurement of ETB TRAINS, UNCTAD
Database Finance Measures advance payment
requirements, multiple exchange rates,
transfer delays, etc. Automatic Licensing
Measures automatic license, prior
surveillance Quantity Control Measures export
restraint arrangements, enterprise
specific restrictions Monopolistic Measures
single channel for imports, compulsory
national services Technical Measures technical
regulations, pre-shipment
inspection, special custom formalities,
obligation on recycling
10
ETB in Agriculture and Marine Products MRL
Aflatoxin EU, Japan (Chilli,
Peanuts, other Nuts) Milk
Products Mediterranean Grapes China Fruit
Fly Fumigation/ Flowers Japan Other
Quarantine Problems Pesticide/Antibiotics Shrimp
s US, Japan
11
(No Transcript)
12
Western Environmental Laws on Textile Products
Country Products Law Status Standard Parameter Ge
rmany Textile articles Dangerous Legislation Compu
lsory Formaldehydes intended for Substance labe
ling when skin contact Act, 1993 exceeding
1500 ppm France Textile articles N.
A. Future Not to exceed Formaldehydes intended
for Legislation 200 ppm skin contact The
Netherlands Textile articles N. A. Unofficial Not
to exceed Formaldehydes intended for
standards 100 ppm skin contact Germany Texti
le Products Chemical Legislation Not to
exceed Tetrachlorophenol Act, 1993 5
mg/kg The Netherlands Textile
Products Staatscourant Legislation Not to
exceed Tetrachlorophenol nr. 35, Act, 5 mg/kg
1994 Sweden Textile Products N. A. Future
Not to exceed Tetrachlorophenol Legislation 5
mg/kg
13
Western Environmental Laws on Textile Products
Country Products Law Status Standard Parameter Ge
rmany Clothing, clothing Fourth
Act Legislation Prohibition Azo-dyes material,
bedding, amending (Appendix 1) towels,
underwear, the German outer
clothing, Commodity sportswear Goods
Act, July 1995 The Netherlands All
garments, Dutch Legislation Prohibition Azo-dyes
footwear, Commodity (Appendix 1) bed
linen Goods Act (warenwet) Sweden Clothing,
clothing N. A. Future Prohibition Azo-dyes mat
erial, bedding legislation (Appendix
1) towels, underwear outer
clothing, sportswear
14
Textiles and Leather Eco Labels - Germany(2)
For lower content of pollutants Norms for
production processes - European Largest Textile
and Apparel Companies (ELTAC) (1) For
ecological perspectives Dye Stuffs Ban
Cobalt Blue and Sulphur Black Ban on PCP
import of Busan 30 Central Leather Research
Institute (CLRI) working on other substitutes
15
SOCIALLY RESPONSIBLE TRADING PROTECTION OF
CHILDREN - Please describe any facilities
provided for employees children - What
medical facilities are available? e.g. First aid
kits, medical centre, medical
insurance. ENVIRONMENT - Adequate fire
protection - Fire extinguishers,
evacuators FACILITIES - canteen facilities
are available on site - What accommodation is
provided for workers?
16
SOCIALLY RESPONSIBLE TRADING EQUAL
OPPORTUNITIES - Are women and ethnic
minorities represented in all areas and
levels of the company? - What is the maternity
entitlement for women
workers? FREEDOM OF ASSOCIATION - Do you
recognise any trade unions on site? WORKING
HOURS - Working hours per week - Workers
paid for working overtime - Daily rest/break
periods given - Pay the workers receive if they
are sick or injured
17
Market Size for Organic Products
Country Approx. Retail Yeara Organic Share
of Import Share Average Retail Value (US
) Total Food Sales of Organic Sales Price
Premium Austria 270 million 1997 2.5 30 20-
30 Belgium 75 million 1997 1.0 50
20 Denmark 190 million 1997 lt3.0 25 15-40
France 508 million 1996 0.4 10 25-35 Germ
any 1.6 billion 1997 1.5 60
30 Netherlands 230 million 1997 1.5 60 15-2
0 Sweden 200 million 1997 2.0 30 15-50 U
K 445 million 1997 2.0 70 0-30
18
Market Size for Organic Products
Contd. Country Approx. Retail Yeara Organic
Share of Import Share Average Retail Value (US
) Total Food Sales of Organic Sales Price
Premium Canada 68 million 1995 1.0 80
30 Australia 60 million 1995 0.2 0-13b 12
-65 b China c 1.2 billion 1995 6.0
d 0 30 Japan c 1.7 billion 1997 1.0 1 20-3
0
a Year given is for retail value data b Varies
by statec In this country, organic includes
low chemical.d Based on production value, not
retail sales. Source American Journal for
Agriculture Economics, Vol. 80 No. 5, 1998, pp.
1125-1129.
19
Policy Options Developing countries would have
to upgrade national infrastructure system for -
Testing - Certification - Laboratory
accreditation - Global standards Developing
countries to draw inferences from OECD efforts
for Mutual Recognition Agreements (MRAs) Export
Assistance Centres (EACs) at Export Promotion
Councils to help SMEs collect information about
ETBs etc.
20
Policy Options Ratification of Biosafety
Protocol EFPs exporters face - Certification
costs - Technical constraints - SPS
measures R D and other support for
EFPs Developing countries should immediately
develop a database to profile trade and
environment related cases at one place Export
Assistance Centres (EACs) to feed in the formal
process of data collection
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