Agriculture Reference
In-Depth Information
international trade in agricultural commodity products, developing countries are placed at a
disadvantage. This is as a result of agricultural subsidies of key developed country economies
such as the USA and the EU that distort commodity prices and prevent developing countries
from making use of their trade advantages in this sector (Martin and Winters 1995, Grant
1997, Pletcher 2005). Declining terms of trade, dependence on a few commodities for export
earnings, tariff protection on value-added goods and the increase in transfer pricing in the
private sector also disadvantage developing country exports (Ekins et al . 1994, Ropke 1994). A
further challenge to developing countries is the growing number of voluntary product stand-
ards that have the potential to become non-tariff barriers to developing country exports, par-
ticularly for smallholder producers. Such barriers include significant information and
managerial demands, higher capital requirements and certification costs (Pletcher 2005).
Although organic agriculture can offer significant market opportunities for producers in
developing countries, if organic regulation is not managed appropriately, it can raise non-tariff
barriers to trade like other product and process standards. For example, developing countries
have had to adopt largely foreign organic regulations as their own, with little acknowledge-
ment that agricultural production conditions can vary considerably between regions. Further-
more, government regulatory systems are set up mainly to interface with other government
regulatory systems through bilateral recognition of equivalence (or compliance). This places
developing country producers and exporters, whose governments do not prioritise developing
organic regulatory systems, at a disadvantage in that they will be required to find other, more
expensive ways to access import markets (Joint Working Party on Trade and Environment
2002, Swedish National Board of Trade 2003). Such complex regulatory requirements can lead
to significant trade losses as highlighted in the following example (Nycander 2000 in Parrott
and Marsden 2002):
In September 1999, the first organic certified Robusta coffee in Uganda was ready
for export. But when import clearance in the EU was held up, the customer lost
interest. Five months later the two containers were still at the factory in Kampala.
According to Felicia Echeverría, Manager of the National Organic Agriculture Program
from the Department of Agriculture and Animal Husbandry in Costa Rica (Echeverría 2004):
if no changes in the current situation occur in the near future, more and more
small organic farmers from developing countries (the thin part of the rope) may
drop out of certified organic markets as the price premium is not enough to
compensate the difficulties faced to comply.
With respect to international trade law, some interesting issues come into play. According
to the Technical Barriers to Trade Agreement (TBT) of the World Trade Organization (WTO),
member governments must use international standards where they exist, or the relevant parts
of them, as a basis for their technical regulations except when such international standards or
relevant parts would be an ineffective or inappropriate means for the fulfilment of the legiti-
mate objectives pursued, for instance because of fundamental climatic or geographical factors
or fundamental technological problems (WTO 1994). As the IBS are listed in the ISO Direc-
tory of Standards, these are generally considered international standards along with Codex
Guidelines. While the IBS have been used informally as baselines for the development of
national organic regulations, a formalised process to evaluate and promote harmonisation of
organic standards and regulations has been lacking.
Furthermore, the principle of equivalence is encouraged in the TBT with members being
required to give positive consideration to accepting as equivalent technical regulations of other
members, even if these regulations differ from their own, provided they are satisfied that these
Search WWH ::




Custom Search