Tuesday, 20 December 2011

How regulations and standards affect sub-Saharan African countries’ participation in global agri-food trade

By Spencer Henson

A recent article in Trade Negotiations Insights highlights the importance of sanitary and phytosanitary (SPS) regulations and standards for the participation of sub-Saharan African countries in global agri-food trade. This article provides a timely reminder that the ability of poorer countries to diversify and add value to their agri-food exports hinges on their ability to comply with the food safety and plant and animal health requirements in export markets. Whilst compliance with stricter SPS regulations and standards can undoubtedly act as a barrier to trade, most notably where the associated costs undermine the competitiveness of countries with weaker capacity, compliance can also be the basis of market positioning and competitive gain. The act of compliance with food safety and plant and animal health controls in international trade can also act to enliven processes of upgrading in controls directed at domestic markets. This suggests a rather complex interplay of costs and benefits for developing countries pondering improvements in SPS compliance capacity.

There is a widespread recognition that the increasing importance of SPS regulations and standards in global trade contrasts with the declining role of traditional trade restrictions such as tariffs. There are frequent and maybe irresistible accusations (or at least suspicions) that SPS regulations and standards represent the new way in which countries protect their domestic markets against import competition. However, there is limited hard evidence to support this claim. It is important to recognise that, unlike tariffs, food safety and plant and animal health controls can bring about significant benefits in terms of public health and agricultural productivity, and also through increased consumer demand. Furthermore, countries have a legitimate right to protect their citizens, even where the standards and regulations they enact inflict pain on poorer parts of the world.

Of course, all should be done to minimise the adverse effects of SPS regulations and standards on the countries of sub-Saharan Africa. For example, it is legitimate for SPS requirements to be adjusted where comparable but different controls that reflect local conditions can be shown to provide an equivalent level of protection. The history of such equivalence agreements to date, however, does not offer much hope. Rather, the emphasis must inevitably be on building the SPS compliance capacity of the countries of sub-Saharan Africa, both to enhance trade performance and to promote the welfare of their citizens and productivity of their agri-food sectors. The article in Trade Negotiations Insights provides some useful ideas in this respect, including a number of areas where countries can collaborate in order to share information and capacities. However, whilst regional initiatives are effective at stretching the inevitably limited resources available for SPS capacity-building, hard decisions still need to be taken in order to prioritise the ‘shopping list’ of needs presented in the article. Recent work by the Standards and Trade Development Facility (STDF) in developing a coherent and transparent framework for establishing priorities can play a key role in this regard.

The article puts significant emphasis on enhancing the role of the countries of sub-Saharan Africa in the setting of SPS standards, presumably through Codex Alimentarius, OIE and the IPPC. The greater inclusiveness of these institutions is essential, not only for the interests of poorer countries but also to the continued relevance of international standards. Participation of sub-Saharan African countries in the promulgation of international standards is not, however, a panacea to the cure of ‘all ills’. Even if the ‘voice’ of developing countries in general (and the countries of sub-Saharan Africa in particular) were to be heard more effectively, SPS compliance would still be a problem. To be relevant (and to be used), international standards must reflect the needs of all countries, including those that are wealthy. At the same time, the private sector is wading into the standards landscape, such that some argue ‘public’ international standards are being increasingly sidelined. At the heart of the issues faced by developing countries is their incapacity relating to food safety and plant and animal health.

It is refreshing that the article puts considerable focus on the role of SPS regulations and standards at the regional level. The need for countries in sub-Saharan Africa to pool capacities in order to meet the compliance challenges posed by industrialised country markets has been highlighted above. Over time, however, SPS regulations and standards are likely (or at least it is assumed) to become a more pertinent issue in south-south trade, highlighting the need for harmonisation within sub-Saharan Africa. The Regional Economic Communities (RECs) potentially have a major role to play in this regard. Relatively little is known, however, about the role of SPS regulations and standards within regional trade in sub-Saharan Africa today, and how these are evolving over time. Work along these lines is essential if we are to predict (and plan for) the evolving impact of SPS regulations and standards into the future. Whilst IDS is doing some work on this issue with UNIDO, much more analysis is needed.

It is important to remain mindful of the considerable challenges faced by the countries of sub-Saharan Africa in the face of seemingly ever stricter SPS regulations and standards. Many of these issues, however, are much more complex than appears ‘at first sight’, belying the effectiveness of ‘quick fixes’.

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