International trade relations are increasingly driven by technical regulations and trade-related standards. The “Meeting Standards, Winning Markets – Trade Standards Compliance” Reports (TSCRs) present new approaches to the analysis of developing countries’ capacity to comply with such standards, the challenges they confront, and the implications of their failure to comply. The first edition of the TSCR was published in 2010 and the second edition came out in 2015.
The 2010 TSCR analyzes import rejection data of the EU and US. In the 2015 edition, the scope of this analysis is expanded to additionally cover the Australian and Japanese markets. The reports also highlight the root causes of such rejections with reference to non-compliance with different standards, provide estimates of resulting export losses of developing countries in these markets, and advocate for more informed policy decision making in development efforts and related technical assistance to enhance the compliance capacity of developing countries.
In addition, UNIDO has started to regionalize this trade standards compliance analysis. The “Regional Trade Standards Compliance Report – East Asia 2013”, published jointly with the Institute of Developing Economies of the Japanese External Trade Organization (IDE-JETRO), is a first outcome of these efforts. This report presents an in-depth analysis of import rejections of East Asian agrifood products in major markets as well as detailed case studies of East Asian value chains supplying to the Japanese and other international markets. Such regionalized analyses more effectively take into account specific regional circumstances and conditions, which in turn allows for a more specific tailoring of policy recommendations.
The empirical analyses would not have been possible without the unprecedented access granted by Australian, EU, Japanese and US authorities to their databases on import rejections. The key findings of the reports can be summarized as follows:
- Import rejections provide a good indicator of key trade standards compliance challenges.
The estimated value of import rejections is lower than expected but constitutes only the tip of the iceberg.
- In addition to complying with public technical regulations in export markets, exporters also have to meet the requirements of buying/importing companies, including private standards. Corporate buyers’ confidence in the compliance capacity of exporting countries and local producers plays an important role in their sourcing decisions.
- Systematic tools for standards compliance capacity assessment and benchmarking are needed and the newly proposed Trade Standards Compliance Capacity Indices (TSCCI) represent a first step in this direction.
- Overcoming standards compliance challenges requires innovative technical assistance with the value chain approach providing valuable guidance.
- The capacity to meet trade standards rests on the awareness and capabilities of actors along the value chain. In-depth case studies on value chains allow to identify weak links in terms of compliance capacity and help to target remedial measures.
- There is a need to devise a cost-benefit model that offers guidance to development partners on where investment in trade capacity-building is most rewarding, thereby allowing for better accountability and effectiveness of technical assistance.
- The trade standards compliance challenges faced by developing countries will continue to change over time and the TSCRs highlight such “emerging issues”.
As such, the TSCR provides a unique policy decision tool for donors, and governments and private sector producers in developing countries as well as innovative analytical devices for researchers. It is the product of a project funded by our long-standing partner, the Norwegian Agency for Development Cooperation (NORAD), and results from a strong partnership with the Institute of Development Studies, Brighton (UK).
The TSCR is part of UNIDO’s advocacy work and is to become a periodic publication. To download the 2010 and 2015 Global TSCR and the 2013 Regional TSCR for East Asia (pdf) click the downloads in the right hand box.
In addition, UNIDO has established Trade Standards Compliance Footprints (TSCFs) for a number of selected countries. These TSCFs represent country fact sheets that provide a snapshot on selected countries’ challenges to comply with export market requirements in agri-food trade and can be downloaded here.
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