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Challenges with the Development of Compliance Infrastructure

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1 Challenges with the Development of Compliance Infrastructure
Brussels Rural Development Briefings                                                                                    Session No 11 Meeting Food Safety Standards – Implications for ACP agricultural exports 11th May 2009 – European Commission Challenges with the Development of Compliance Infrastructure Steffen Kaeser Trade Capacity-Building Branch

Global Trade Challenges: Present Inadequacies SUPPLY SIDE: “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 CONFORMITY: Countries that can not meet standards and regulations in developed country markets are effectively barred from trading with those markets. International Development Research Centre (IDRC), Canada TRADE FACILITATION/INFRASTRUCTURE: For the majority of Sub-Saharan African countries, tariffs amounted to less than 2%, while transport cost incidence often exceeded 10%. Since the introduction of AGOA, transport costs have risen relative to tariffs. World Bank Trade Note 15; May 10, 2004 TECHNICAL ASSISTANCE: 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. Steven Jaffee & Spencer Henson, Standards and Agro-Food Exports from Developing Countries – Rebalancing the Debate, World Bank 2004

3 Compete Conform Connect
Challenges for Trade participation: The 3 Cs “Countries must have marketable products for exportation”  COMPETITIVITY of productive capacities “Products must conform to requirements of clients and markets”  CONFORMITY with standards “Rules for trade must be equitable and customs procedures harmonized”  CONNECTIVITY to markets  PRODUCTIVITY (enterprise)  COST OF EXPORTING (support services) Compete Conform Connect

4 Forming Strategic Partnerships for Trade Capacity-Building

5 Meeting Pre-conditions for Exports
Developing countries’ potential in Agro-Food area but have to comply with market requirements Meeting Pre-conditions for Exports Regulatory Environment for Compliance WTO TBT /SPS Agreements (Jan 1995) WTO TBT & SPS agreements compliance Products sourced from areas free of pests & diseases Fruits/vegetables - minimum pesticide residue standard Meats/fish meet minimum antibiotic residue requirement Standards of hygiene applied in manufacturing (HACCP/ISO 22000) The establishment of the WTO came with two agreements, that have standards and conformity implications. The TBT and SPS agreements. Established in January 1995 WTO members have signed it. The agreement recognises every country has a right to use standards and conformity measures, to safeguard citizens, safety, health, product quality etc. and also the environment and plant and animal welfare. The SPS/TBT agreement in effect legalised the use of standards/conformity procedures in Trade. When the agreement was drafted, everyone knew developing countries do not have the capacity to comply with this. The agreements clearly acknowledges this deficiency and has clauses to assist developing countries . However, very little such technical assistance has been delivered. Developing countries lack of implementation capacity

6 “Fair Trade for All”: Priority Areas to meet Product Standards Requirements
“Developing countries lack the ability to assist their producers to meet product standards, which often act as a barrier to developing country exports Significant assistance from developed countries is required to build up their capabilities to conform to product standard requirements” “UNIDO recommends the following priority areas for assistance 1. A national/regional standards/standardization body 2. A national/regional metrology system 3. A certification/conformity assessment system 4. An accreditation system” Source: J. Stiglitz & A. Charlton, Fair Trade for All – How Trade can promote Development, Oxford University Press, 2005

7 UNIDO – DG SANCO Cooperation
- High-level dialogue between UNIDO DG and EC DG SANCO since 2008 Main targeted areas for cooperation:          Establishment of a Manual on Competent Authorities for horticulture products Systematic use of Food and Veterinary Office (FVO) Inspection Reports and of RASFF data on rejections for design of TA programmes  Participation in the Better Training for Safer Food (BTSF) Initiative - Development of a Rapid Inspection Response Facility (for short-term immediate TA after deficiencies are identified by Inspections - avoiding bans)  Plan:  UNIDO support project for DG SANCO cooperation, includ. RIRF

8 UNIDO TCB - LDCs Coverage (2007: 36 countries)
On-going and planned Regional Programmes SAARC Afghanistan Bangladesh Cambodia Ethiopia Mozambique Nepal Senegal Tanzania UEMOA/ ECOWAS MEKONG Country Programmes EAC Madagascar Mauritania Source: OECD DAC List Uganda Burundi (2007) Rwanda (2007) Bhutan Maldives MEKONG Delta Countries Lao PDR CARICOM Haiti SADC UEMOA/ECOWAS Benin Burkina Faso Cape Verde Gambia Guinea Guinea Bissau Liberia Mali Niger Sierra Leone Togo Angola Congo Lesotho Malawi Zambia CEMAC Central African Rep. Chad Equatorial Guinea

9 UNIDO Aid-for-Trade type Programmes (Supply-side & Conformity)
Support to the National Prevention Programme of Ochratoxin in Coffee and Cocoa in Côte d’Ivoire Budget: € 1.7 million Donor: EC Objective: help the supply-chain actors to secure their incomes and exportations Outputs: studies in coffee and cocoa supply-chains (determination of contamination levels, identification of critical contamination points, and determination of adequate sampling methods); national OTA analytical laboratory upgrading for ISO/IEC accreditation promotion of good practices during production and post-harvest stages Lobbying activities to draw the attention of the EC on adequate OTA maximum levels. * The OTA is a mycotoxin considered as a genotoxic human carcinogen and the European Commission (EC) is examining the opportunity to raise new maximum contamination levels for green and roasted coffee, cocoa and cocoa based products

10 Budget: € 5.0 million Donor: EU
UNIDO Aid-for-Trade type Programmes (Supply-side & Conformity) Pakistan TRADE RELATED TECHNICAL ASSISTANCE PROGRAMME Budget: € 5.0 million Donor: EU Barrier to Trade Survey Study on SPS Compliance for Exports Standards (PSQCA) Standards development Certification Body (Systems) Consumer affairs Product certification Metrology (NPSL) Lab upgrading, international accreditation Product Testing (MFD, PCSIR, etc): Fisheries, Food, Leather, Textile Lab upgrading, PT participation International accreditation Accreditation (PNAC) Organizational strengthening, international recognition National accreditation scheme Training of auditors Setting-up of PT schemes Quality/Hygiene (Private sector, FPCCI, etc.) Fish/food Management systems Good practices Compliance with market requirements Pilot certifications HACCP, ISO 9001, 14001, SA 8000) Pilot traceability systems Boat hygiene Icing Landing Sites Inspection Auction Hall Processors Traceability

11 UNIDO Aid-for-Trade type Programmes (Supply-side & Conformity)
Supply and Conformity: Bangladesh QUALITY SUPPORT PROGRAMME Budget: € 7.5 million Donor: EU (co-funded by Norway) Quality Infrastructure standard setting, laboratories infrastructure, certification, accreditation, metrology/calibration Textile competitiveness - industrial upgrading, product development, technical and marketing training Fish Inspection product testing and inspection services, laboratory accreditation, waste treatment, staff training Export Diversification (ITC component) access to regulatory market information, EUREPGAP, sectoral strategies, packaging

12 UNIDO TCB Programmes (TA combining Supply-side & Conformity)
Regional Trade: UNIDO/EU - UEMOA Programme Budget: € 14.0 million Donor: EU Productive Capacities and Quality Promotion Food safety, productivity and quality promotion 68 pilot enterprises prepared for ISO 9001 National and regional Quality awards Training of journalists in consumerism and product quality Standards and Conformity Assessment Harmonization of standards for export products Harmonization of testing procedures, reg. database on labs Upgrading of 50 laboratories, 24 for international accreditation Regional accreditation scheme Training of 16 Lab. auditors Training of 40 ISO 9001 auditors UEMOA Phase 2: (€ 6.0 million) UEMOA Upgrading: funding received (€ 11.0 million) In cooperation with: Microbiology Laboratory in Côte d’Ivoire recently received COFRAC ISO/IEC accreditation for food testing (Sept. 2007)

13 West Africa Quality Programme (€ 14.5 million – EU funding)

14 West Africa Quality Programme Enhanced Integrated Framework (EIF)
Trade Analysis Standardization Accreditation Product Testing/Metrology Inspection Traceability Quality Promotion COLEACP/PIP Enhanced Integrated Framework (EIF)

15 Component 1: Product Testing
Total of 120 labs interested in the programme Total of 40 laboratories assessed for international accreditation (ISO/IEC 17025) Micro-biological Testing Chemical Testing Pesticides Testing International accreditation potential: 2 – 3 laboratories per country Critical Issues: Decision on lab selection (done through NSCs and UEMOA Commissions) Identification of country priority products (done by NSCs) Regional division of labour Civil works as pre-requisite, limited programme funds for equipment upgrades Institutional set-up and salary/incentive schemes 15

16 Component 2: Product Testing
Total of 39 laboratories assessed for international accreditation (ISO/IEC 17025) Micro-biological laboratories: Cape Verde (3), Ghana (3), Guinea (2), The Gambia (2), Liberia (2), Mauritania (3), Nigeria (2), Sierra Leone (1) Chemical laboratories: Cape Verde (1), Ghana (3), Guinea (2), The Gambia (2), Liberia (1), Mauritania (2), Nigeria (2), Sierra Leone (1) Pesticides laboratories: Cape Verde (1), Ghana (1), Guinea (1), The Gambia (1), Liberia (1), Mauritania (1), Nigeria (1), Sierra Leone (1) International accreditation potential: Micro-biological laboratories: 8-10 Chemical laboratories: 5 Pesticide laboratories: 3 Critical Issues: Decision on lab selection, reference laboratories, and regional division of labour Civil works as pre-requisite, limited programme funds for equipment upgrades Institutional set-up (Business Plan) and salary/incentive schemes 16

17 Implementation Challenges
Programme Design Available financial resources Programme duration 3 years with no inception and closing phase Regional Support Unit (2 staff only) Increase in expert pro forma cost, equipment cost, regional travel fares Regional Dimension 2 RECs 15+1 countries Regional travel 3 languages, Translation/interpretation Diverse country/development profiles Countries and RECs divergences

18 Implementation Challenges
Managerial Challenges Techn. counterpart at RECs level (SMTQ) RECs familiarity with TA (FAFA, etc.) Responsabilities of programme partners, division of labour UNIDO HQ management Size and Location of Regional Support Team Donor Coordination Communication by programme with RECs, EC (regional and national), countries, etc. Politico- technical Challenges Regional decisions on lab upgrading, division of labour Regional activities: Harmonization of standards, etc. Regional schemes are new territory

19 CONCLUSIONS Developing Compliance Infrastructure is complex – tailor programmes Regional programmes are needed but difficult – develop REC Capacity REC development is an extra outcome – allocate resources and time Programme management is intensive and needs a lot of communication Regional outcomes are difficult but measurable – need regional convergence Compliance Infrastructure is only one part of trade development: 3 pronged: Competitive supply – Compliance services - Connectivity

20 Merci ! Questions ? Thank You ! Trade Capacity Building 20

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