COUNTRY EXPERIENCES WITH SPS AND FOOD SAFETY: Shrimp Exports. Mohammad Hassanul Abedin Khan, Ph.D Director WTO Cell Ministry of Commerce Bangladesh

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1 COUNTRY EXPERIENCES WITH SPS AND FOOD SAFETY: Shrimp Exports Mohammad Hassanul Abedin Khan, Ph.D Director WTO Cell Ministry of Commerce Bangladesh

2 SPS:Rules Article 2.1 provides the members basic rights to take sanitary and phytosanitary measures necessary for the protection of human, animal or plant life or health, provided that such measures are not inconsistent with the provisions delineated in this agreement. However, at the preamble of the agreement it is categorically stated, these measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between members where the same conditions prevail or a disguised restriction on international trade.

3 SPS: Rules and provision for LDCs Article 10 of SPS Agreement speaks about the special rights of LDCs. Article 10.1 requires members to take account of the special needs of developing country members and in particular of the LDCs. Where, as an LDC Bangladesh needs longer time-frames for compliance which is allowed under article 10.2 of Agreement on SPS.

4 SPS issue: EU Ban on imports of Shrimp from Bangladesh Background: >>By 1997: >Bangladesh Shrimp processing industry had already invested $17.6 million in plant upgrades >The Government had invested $382,000 in laboratory and personnel upgrades >Development partners had invested $72,000 in training programmes in Bangladesh >>Until 1997, there were about firms in Bangladesh who are well equipped and who export quality shrimp under proper hygienic conditions. Major importers were the EU members, accounting 34-50% of total export >>The EU has all along been importing from these firms as well as from other firms in Bangladesh. Thus, EU was aware of the possible variations in the quality of the shrimp processing units in Bangladesh. >>An FAO project aimed at assisting the formulation and implementation of a Hazard Analysis Critical Control Point (HACCP) based assurance program was already under

5 SPS issue: EU Ban on imports of Shrimp from Bangladesh Background.. Contd.. EXPECTATIONS FROM THE EU: It was expected that the EU should have continued importing from the quality exporters instead of imposing the ban across the board. They should have provided appropriate guidelines for the improvements of the of the firms and given them lead-time to improve. EU could also provide technical assistance where necessary. Only in the event of failure of these firms to comply with the health and hygiene requirement EU could impose ban on import from these firms.

6 EU Ban on imports of Shrimp from Bangladesh RESULTANT: >>Recognizing the limitations of the LDCs in meeting the requirements of regulations, the SPS Agreement stipulated that they should be granted, upon request, specified time-limited exceptions, in whole or in part, from obligations under the Agreement, keeping in view their financial and developmental needs. >>The unilateral action of the EU in banning shrimp import from Bangladesh goes against this spirit of accommodation of the developing/least developed countries concern.

7 Practical Experience of SPS Measures: Was it justified? The European Commission imposed a ban on import of frozen shrimp from Bangladesh on the grounds of non compliance with the importer s hygienic regulation Hazard Analysis Critical Control Points (HACCP) Specifically, The objections related to the following: use of unskilled workers with unhygienic habits unhygienic transportation and preservation untimely procurement of shrimp

8 Impropriety of the European Ban Europeans are our one of the best Development partners Non-denial of importance of health and hygiene issues vis a vis nonacceptance of arbitrary ban NTB vs SPS: Ban of Shrimp exports to EU

9 SPS Measures:Problems of European Union Market Access and Implications SPS and other non-tariff measures may continue to hinder market access. There are also concerns that LDCs including Bangladesh face problems complying with SPS requirements because of their lower level of economic development and, more specifically, their level of SPS capacity. The EU proposes to permit free access for virtually all agricultural and food commodities to the least developed countries under the Everything But Arms initiative. However, at the same time agricultural, fishery and food products are subject to an increasing number of SPS measures. SPS measures may prohibit imports of agricultural, fishery and food products (In the most extreme cases).

10 SPS Measures:Problems of European Union Market Access and Implications..contd.. Many developing and LDCs including Bangladesh face constraints that limit their ability to comply with SPS requirements in the EU (especially for exporting agricultural and fishery products) than equivalent suppliers in the EU or other high developed countries. In many LDCs including Bangladesh, a multitude of government ministries/departments/agencies are involved in SPS matters. As a consequence, administrative responses to changing SPS requirements in export markets can be slow and bureaucratic. Changes in SPS requirements may be communicated well ahead of time, otherwise LDCs may end up struggling to comply at the last minute. EU hygiene requirements for fish and fishery products prohibit fish from making contact with wood, although most traditional fishing vessels in developing countries are wooden.

11 SPS: Issues of Concern (a) The SPS and TBT measures are being applied by the developed countries with greater stringency than is call for particularly given the LDC status of countries like Bangladesh. SPS and TBT agreements should contribute to protecting the interests of developing and least developed countries against unfair practices as evidenced in some trade disputes. Many small exporters from these countries continue to face non-friendly trade regime and do not have recourse to the formal dispute settlement process because of small volume of trade involved. (b) The SPS and TBT Agreements contain promises of financial and technical assistance very little of which has so far materialized. These promises need to be made more concrete and the level of effective support need to be raised significantly.

12 Shrimp Business: Current position Increased commitment by industry and government to raise product quality to meet international standards. Both exporters and government made major investments in plant infrastructure Personnel training in order to achieve international technical and sanitary standards. Strengthened sanitation inspection, plant repair and modification, Installation of new equipment and new laboratories

13 Shrimp Business: Current position Bangladesh has also placed greater emphasis on good aquaculture practices as well as certification of aquaculture facilities. Diversification of exportable of Shrimp products, e.g., cooked, quick-frozen

14 Concluding remarks Bangladesh, as an LDC can often compete in world food commodity markets because of its competitive advantage, e.g., lower cost than in developed countries. Still there is no harmonisation as far as the SPS measures is concerned A cooperative effort between a country s industry and government and its external partners is required to accomplish minimum safety requirement

15 Concluding remarks..contd.. LDCs/developing countries need assistance not only with technology, but also with training workers to use technology and conform to world foodhandling, sanitation, and personal hygiene standards. The Bangladeshi shrimp export case demonstrates that these efforts can be successful. It shows that developing countries, with careful guidance and focused effort, can successfully face the challenges of the global market.

16 END OF PRESENTATION Thank you very much. Thank you all.