sanitary requirements in dairy trade evidence from an exporter survey on divergent standards thom...
TRANSCRIPT
Sanitary Requirements in Dairy TradeEvidence from an Exporter Survey on Divergent StandardsThom AchterboschIPC International Dairy Roundtable, Geneva, 2 March 2007
Rationale
Increasing importance of technical food regulation
Sanitary measures good for society... ...but concern over impact of divergent
requirements on trade Dairy case study
Limited scope in terms of global players Differentiated product Animal health and food safety issues Codex and OIE standards
Outline
Issues at play Objectives of the study Key results (economic impact) Approach Observations and case studies Conclusions and recommendations
Issues at play – Dairy regulation under the SPS agreement
1 dairy SPS disputes 6 specific concerns addressed in SPS
committee 1995-2006
Issues at play – Mandatory sanitary requirements encountered
Certification Health Veterinary
Specifications Testing
Issues at play – Internationally recommended standards under Codex/OIE Product standards (tolerances, etc) Process standards Emergency measures Conformity assessment standards Methods of sampling and analysis
International Dairy Federation (IDF)
How to analyse sanitary requirements in trade
Practice of dairy exporting companies is to seek compliance with whatever regulation put forward (keep trade going)
1. TRADE BARRIER
2. RESPONSE(short term)
3. SOLUTION(long term)
Type of impedimentMotivation or causeEconomic impact
ComplyNegotiate
International agreements and standards; Dispute settlement;Change national policies;Firm: restructure
Study objectives
1. Examine the trade-impeding effects of divergent sanitary requirements, from the perspective of exporters.
2. Explore how dairy exporters minimise trade losses and costs in case of SPS obstacles to trade.
3. Explore possible solutions for timely resolution of disputes over obstacles to trade.
Economic impact of sanitary requirementsTrade loss Transaction cost
“Response” “Solution”
Cost for firm
Detained shipmentMarkets restrictedVolumes, prices dropLoss of market position
Scan foreign regulationsCompliance costs: products, labels, tests, certificationNegotiation
Second-best business solutions
Cost for govern-ment, industry organization
-- Prepare compliance, certificatesNegotiationsInspections
Standard-settingDispute settlement
Key results – trade impact of sanitary requirements Exporters face divergent standards across
markets – ´a patchwork quilt´ Costs of sanitary requirements lie in additional
complexity of trading Large benefits to be obtained from reducing trading
costs
Few markets closed by means of SPS measures Limited overprotection recorded Many unintended obstacles
Approach
Selection of 9 firms from 5 dairy export countries: Denmark (1), France (3), Netherlands (3), New
Zealand (1), US (1) Total sales of € 37.1 billion
Contact via producer organizations limited non-response
Methods of data collection Questionnaires, semi-structured interviews with
export firms and key informants Limitations: small sample, market sensitivities
Observations and case studies – 1 of 3
Emergency measures often go beyond recommended length and scope OIE recommends continued dairy trade with
countries experiencing outbreaks infectuous disease
BSE, FMD in EU: €100 million of trade loss reported in the survey
Dispute settlement no option within time-frame
Possible solutions
More binding OIE standards (compulsory harmonization?)
Rapid consultation under advisory technical exports group (science based risk assesment) Including more detailed regionalization
Observations and case studies – 2 of 3
Divergent methods for analysis and sampling hamper trade, particularly when zero-tolerance limits are applied as mandatory requirements Mandatory end-product testing versus private
process standards quality assurance schemes Zero-tolerance limits for contaminants and
pathogens International Dairy Federation laboratory standards
applied ‘with a twist’ €85 mln trade losses reported in the survey
(Chloramphenicol and E.Sakazakii) Arbitrariness in country experiences in compliance
Possible solutions
Replace zero tolerances for contaminants with MRLs (harmonization)
IDF/ISO proposed standard on methods for analysis and sampling (harmonization)
Advisory technical exports group (science based risk assesment)
Equivalence agreements
Observations and case studies – 3 of 3
Veterinary requirements for dairy products (esp. heat-treated) often not justified for sanitary purpose Generic rules apply – veterinary certificates required
for highly processed product Risk of transmitting animal and zoonotic diseases is
determined by import risk and application by downstream producer in supply chain.
Survey records difficulties in certification on all key dairy products (powders, cheese)
Also ingredients (casein, milk protein conc.): milk rules apply to products that some no longer consider as milk
Possible solutions
Solutions lie in specific rules for dairy-based ingredients: differentiating rules for food safety and
agricultural health by applications of the shipped products;
quality assurance standards for performance rather than product
Conclusion
Sanitary measures affect dairy trade mainly by increasing the complexity and raising the costs of shipping products abroad.
Conclusion Export firms encounter a 'patchwork quilt' of
sanitary requirements Dairy exporting companies seek compliance with
whatever regulation Emergency measures often go beyond
recommended length and scope €100 mln trade losses
Standards involving zero-tolerance limits hamper trade
Divergent methods for analysis and sampling hinder trade €85 mln trade losses
Strong competion on emerging markets, more SPS issues
Recommendations - 1
Target SPS procedures more towards reducing the costs of sanitary requirements in trade Trade facilitation Economic impact of reducing trading costs by
1.5% comparable to benefits of a Doha round reform.
Recommendations - 2 Harmonization
Replace zero-tolerances with MRLs Apply global standards for laboratory analysis, sampling
Equivalence Performance standards in regulations
Science-based risk assessment Processed milk minor factor in transmitting risk Need for a less restrictive regulatory framework for
sanitary measures in dairy trade Dispute settlement
Solve time-constraint for checks on emergency measures
Rapid consultation, forms of mediation
Sanitary Requirements in Dairy Trade: Evidence from an Exporter Survey on Divergent Standards, by Thom Achterbosch, forthcoming on websites of IPC (www.agritrade.org) and LEI (www.lei.wur.nl)
© Wageningen UR