THE ARAB QUALITY AND FOOD SAFETY CONFERENCE 15-16 June 2006, Beirut “QUALITY AND GLOBAL TRADE”...

THE ARAB QUALITY AND FOOD SAFETY CONFERENCE15-16 June 2006, Beirut

“QUALITY AND GLOBAL TRADE”

UNIDO Perspective

Gerardo PatacconiIDO, UNIDO Focal Point for UNIDO/WTO MoU and ISO/DEVCO

Trade Capacity Building [email protected]

www.unido.org

www.unido.org

Food scares and other security issues

Global, regional, national TBT/SPS regulations

Standards and Conformity Assessment infrastructure

Supply-capacity (quality, quantity, price) and competitiveness

global/regional value chains

UNIDO Global Approach

Emerging Quality and Safety issues

www.unido.org

I’ve got MAD……….and the World become CRAZY

about improving food quality and safety systems

Food scares and other security issues

SECURITYSECURITY: Risk of deliberate contamination, frauds and misuse of shipment

SAFETYSAFETY: Distribution of unsafe/adulterated Food products (to be withdrawn from the supply chain and timely and accurate information given to consumers)

EMERGING ISSUESEMERGING ISSUESEMERGING ISSUESEMERGING ISSUES

Focus on supply-chain and border Focus on supply-chain and border security:security:

• Bioterrorism Act) to protect the US from the threat of bioterrorism using the food chain.(Registration, US Agent, Prior Notice and Establishment and Maintenance of Records)

• Custom Trade Partnership Against Terrorism (C-TPAT)

• The Container Security initiative (CSI)• The 24-Hour Rule

Focus on supply-chain and food safetyFocus on supply-chain and food safety:• EU Food Law – Regulation (EC) 178/2002EU Food Law – Regulation (EC) 178/2002• Residual of pesticides• Labeling, • Standards/Technical Regulations• Conformity Assessment procedures• ………….

HIGH COST COST

www.unido.org


• Poor physical facilities/infrastructure

• Limited academic and research capabilities and technical/scientific know-how/skills

• Inefficient institutional set up (Standards and conformity assessment functions, when exist, are scatters among too many institutions)

• Early focus on mandatory standards and inspection

• Revenues generated could not be retained due to the public law status

www.unido.org


• Labs established even with donor support not sustainable

• Donation of equipment with poor planning, training, and lacking adequate local physical infrastructure/staff, absorbion capacity

• Political instability and conflicts,

• Lack of funding

• Lack of demand

• Low-level of manufacturing due to focus on commodities

• Exposed to barriers to trade especially SPS measures

www.unido.org

• Poor and uneven quality of local productsPoor and uneven quality of local products

• National quality infrastructure lacks credibility and tests and certificates by local laboratories not recognized in export countries.

• Inability of DCs to utilize preferential treatment/ market access concessions.


www.unido.org

High Risk of rejection of products in export markets due to lack of conformity (TBS and

SPS).

www.unido.org

Supply-capacity (quality, quantity, price) and competitiveness and integration in

regional/global value chains

World exports, 1980-2004 (US$ billion)

Global Trade Growth & Marginalisation

www.unido.org

Share of developing countries in global trade only 26%

Every 1% growth in Trade, LEADS TO one-half % Income increase

Over 75% of global trade is in manufactures (Industry the key)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

1980 1985 1990 1995 2000 2001 2002 2003 2004

bil

lio

n U

S$

World

Developed economies

Developing economies

Source: UNCTAD, 2005

LDCs

www.unido.org

Immediate Opportunities: Agro Food Exports

World and Developing country exports of fish,processed fruits & vegetables now exceed the combined value of exports of tropical crops: Cotton, Coffee, Sugar, Tobacco. (source: UN COMTRADE)

- 20%

+19%+11%

- 9%

www.unido.org

Immediate Opportunities: Agro Food Exports

Global Trade ChallengesTariffs reduced – Other Barriers remain

US$ 1.75 bn. exports from developing countries have been disrupted in 2004, due to SPS (food safety) non-compliance. While only US$ 53 mn. spent

by donors on SPS support. World Bank 2004, Steven Jaffee & Spencer Henson, Standards and Agro-Food Exports from Developing Countries – Rebalancing the Debate

COST OF COMPLIANCE TO FOOD SAFETY RULES - UNIDO Estimates

Shrimp exports to the EU - Testing and Compliance cost adds 2.8%

Enterprise Quality/safety set up cost – adds 5% to product cost

National Quality & Testing infrastructure – US$ 5.0 mn. to US$ 25.0 mn.

www.unido.org

“LDCs have neither the surplus of capacity of exportable products nor the

production capacity to take immediate advantage of new trade opportunities”

Kofi Annan - UN SG, Financial Times, 5 Mar. 2001

Quality systems in the Agri-Food-Industry

AFITA/WCCA 2004

Quality and safety and Beyond

Feed industry

farmer

processing

retail

GMP EurepGAPBQMAgri Confiance

- QM-Milch IKM KKM

DQG Q+S Certus

IKB Label Rouge

IFS EFSIS BRC

Stages of the food industry

-

Quality systems

www.unido.org

direct

the retail

ISO 22000supplier to

Integration Needs

Enterprise/ChainManagement

SystemISO 22000

HACCP

ISO9000

GHP

GMP 1...X

DifferentProduct Lines

ISO14001

BRC

Q+S

etc.

ABM

IFSSQF

EurepGAP

Traceability

AFITA/WCCA 2004www.unido.org

Quality

Price

safety

The “big”dilemma

UNIDO GLOBAL APPROACH: The UNIDO 3 Cs

“Countries must have marketable products for export”

COMPETITIVITY of productive capacities

“Products must conform to requirements of clients and markets”

CONFORMITY with standards

“Rules for trade applied and simplified cross border transactions”

CONNECTIVITY to markets

Compete Conform Connect

www.unido.org

Forming Strategic Partnerships for Trade Capacity Building

Thank You

Thank You

Thank You

Thank You

25.4

8.8

29.9

19.4

39.8

117.6

15.9

9.5

21.323.2

26.9

9.4

0.6

16.4

11.7 15.311.6

0

10

20

30

40

2002 2003 2004

US$

milli

on

UNIDO FAO ITC UNCTAD UNDP WTO

UNIDO TCB projects 2005: US$ 64.6 Mn.Additional US$ 90.4 Mn. under negotiations

Source: UNIDO elaboration

www.unido.org

Total UNIDO TRTA Portfolio: OECD/WTO TCB Data Base

Situation Before

• Exporters not aware of impact of new Directive EC 178/2002 that could become a TBT as of 1st January 2005:

• Insufficient Insufficient national capability to assess the problem, its impact and to assess the problem, its impact and implement cost-effective solutions implement cost-effective solutions

• Lack of funding (institutions/enterprises)• Risk of Risk of loosing foreign markets by local suppliers and by local suppliers and

complementary industriescomplementary industries• Key priority Key priority exported products to be effected with high negative to be effected with high negative

impact impact not known

Case of EgyptTraceability of agro-industrial products for the European MarketTraceability of agro-industrial products for the European Market

• TRTA/CB Project elaborated jointly by UNIDO and the Ministry of Foreign Trade (MOFT) with support of Italian authorities

• TRTA/CB funded utilising a debt swap agreed between Italy and Egypt and linked to an Italian Initiative for trade facilitation called the “green corridor”

• Egyptian producers assisted and traceability scheme implemented and linkages with Italian/European Importers established

Situation TodaySituation Today

Funded in the framework of the “Debt-for-Development Swap” agreement (19.02.2001) by the Government of the Italian Republic and the Government of

the Arab Republic of Egypt


• Assistance to Pack Houses (~100) and through them to over 5000 producers

• Available software assessed and 5 best options selected

• UNIDO Traceability manual developed and adopted

• Over 600 Egyptian trained in traceability and related issues

• Physical traceability assessed (farm to fork)

• Value chain analysis of selected products

• Mapping of pack Houses and production pattern



• Financial scheme designed

• Applicants to traceability fund assessed (ICT infrastructure, traceability system SWAT, assistance in selection of technology, support in implementation)

• Physical traceability assessed (farm to fork)

• Assess sector technology upgrading needs

• Assistance planned for Plant Quarantine system

• Preparatory work for assistance to food manufacturers (also internal traceability)



THE ARAB QUALITY AND FOOD SAFETY CONFERENCE 15-16 June 2006, Beirut “QUALITY AND GLOBAL TRADE”...

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