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Ending Global Poverty? Seriously?

Photo by lwater Ensuring food safety and protecting health is one of the prime duties of every government, whether in a developed country or in a developing one. Accordingly, the WTO Agreement on Sanitary and Phytosanitary Measures (SPS) has conferred upon every sovereign member of the WTO the right to set its own standards in the import of animal and plant products. However, the Agreement has stipulated that “the regulations should be based on science and should not arbitrarily or unjustifiably discriminate between countries where identical or similar conditions prevail.” But there are apprehensions that countries have been increasingly using these measures for trade protection by setting standards for imports that are higher than the international standards.

Various studies have shown that SPS Measures are the most significant barriers in the export of agricultural and food products from developing to developed countries. This has had a tremendous impact on trade, and consequently development, of those developing countries whose export basket constitutes mainly of agricultural and food products. For example, a study has estimated that the loss to African countries in agricultural exports because of the higher EU standards of aflatoxin as compared to the Codex Alimentarius standards was estimated to have been about $670 million. On the other hand, the developed countries have pledged time and again to increase the amount of aid flow to the developing countries every year for the fight against poverty.  How should one judge such policy of pretending to offer by one hand and seize by another?

Agreed that the exports of developing countries are not always restricted market access only because of standards set higher than required and therefore there is need in part of the developing countries to comply with at least the required minimum level of standards for their exports. But with an estimated cost of compliance of 2 to 11 percent of the value of exports, for example in the case of African countries, the cost is too high to be borne by these countries alone without any technical and financial assistance.

The study that estimated the loss to African countries because of the higher level of standard of aflatoxin in the EU had also estimated that such standard would result in the reduction of health risk by about 1.4 deaths per billion a year, which is about 0.7 deaths per year for the EU with the current estimated population of about 500 million. But how many lives in Africa could be saved if only such standards had not been in place and the loss could have been avoided? Therefore, at a time when the World Bank too has come to realize that it is through the development of agriculture in the developing countries that global poverty can be reduced, the developed countries should seriously rethink their policies on SPS measures. Equally important is the fact that the developing countries are looking forward to see the developed countries not “pledge” more in aid each year but rather act in accordance with what they have pledged in the past.

Photo Credit: lwater via Flickr’s Creative Commons

Written by Puspa Sharma

An M.A. in Economics from the Tribhuvan University, Nepal, Puspa Sharma is currently a Fulbright student. He is in the process of earning his second Masters Degree in International Studies with focus on Global Finance, Trade and Economic Integration from the Josef Korbel School of International Studies, University of Denver.


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