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Some trade policy issues in SPS and TBT and analytical challenges

Some trade policy issues in SPS and TBT and analytical challenges. Frank van Tongeren, OECD/TAD CATSEI workshop Brussels 14 th November 2007. China’s agro-food balance of trade became negative in recent years.

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Some trade policy issues in SPS and TBT and analytical challenges

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  1. Some trade policy issues in SPS and TBT and analytical challenges Frank van Tongeren, OECD/TAD CATSEI workshop Brussels 14th November 2007

  2. China’s agro-food balance of trade became negative in recent years

  3. Importables are protected – exportables are not China producer NPC by commodity, 2003-05 average Note: for eggs, poultry, pig meat, beef and veal, apples and peanuts the NPCs amounted to one.

  4. Outline • Regulation and NTMs • EU-China concerns: SPS • EU-China concerns: TBT • Analytical challenges and possibilities for modelling

  5. Regulation and Non-Tariff Measures • NTMs not necessarily trade restricting; good regulation can make trade flow more freely • Trade measures are derived from domestic regulations • Frictions arise because of regulatory heterogeneity • Different regulations • Differences in implementation/procedures • Information • The above does not necessarily apply to core-NTBs (quota, import licensing, STEs)

  6. Food quality and food safety • Food safety is essentially domain of government policies • Food quality is more a private business affair (product differentiation etc.) • Both are important for trade, but in rather different ways.

  7. EU-China concerns: SPS • Systemic issues • Not transparent system in China • Information • National/subnational competencies • Not following international standards referenced in SPS agreement • OIE, IPCC, CODEX • Different ‘interpretation’ of standards and testing protocols

  8. EU-China concerns: TBT • Many complaints about CCC system (Compulsory Chinese Certification) • Non-transparent; multiple testing; surveillance by customs (= non-national treatment) • Systemic solutions sought: • Simplified procedures for low-risk products; exemptions for ISO-certified suppliers; introduction of SDOC; integration of China into international standardisation processes

  9. EU-China concerns: TBT • Many individual industries report problems to enter China market • Food sector: • Food labelling; registration procedures unclear and labelling requirements claimed to be excessive

  10. Analytical challenges • Concentrate on systemic issues; incidents not really interesting analytically (e.g. Mattell lead paint = failure of SDOC or failing market surveillance?) • If few sectors/products are focussed, use price gap method to assess height of trade barrier • This encompasses assessment of cost of compliance, fixed and variable • Must collect info both ways • Handicraft • Usually several measures affect a given product; including private standards: • which one is restricting trade?

  11. Analytical challenges, contd. • Food safety and trade: • focus on cost of compliance with regulations (mandatory standards) if trade impact is only concern; • Define the proper baseline to measure cc! ‘No regulation’ is typically not the right baseline • if broader economic assessment is required, need assessment of consumer benefits as well • Food quality and trade: • Horizontal and vertical product differentiation

  12. Data collection • A good inventory of NTMs in China will be useful beyond this project • If possible use standard classification schemes that can be shared with others • MAST tentative scheme for UNCTAD pilot project (printout)

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