border measures and africa’s agri-food trade: …...border measures on africa’s agri-food in the...

Border Measures and Africa’s Agri-Food Trade: Export Markets Comparative Analysis

Olayinka Idowu KAREEMTrade and Development Policy Research Network

WTO Agricultural SymposiumJune 2019

The Outline

• Introduction

• Context

• Empirical Review

• Conclusion

The Introduction

Introduction• Africa’s Sustainable development in part is linked to their global trade interaction and

integration.- However, trade integration is hindered by several border measures.

-tariffs and NTMs that are imposed by trading partners.

• Africa has a comparative advantage in agri-food production.- Trade in agri-food commodities is hampered by the border measures.

-both within Africa and outside the continent.- making it difficult for Africa to fully benefit from global trade.

• Countries have trade policies and can regulate trade for:- Health and/or safety purpose- National security- Unfair trade, e.g. agricultural export subsidies.- Infant industry

• Trade regulations had been witnessed in the agri-food beyond the stated purposes.- The US has tightened internal agricultural policies which subsidised farming.- The EU has expanded and holds a portfolio of border measures.- China has regulated the agricultural sector, e.g. grains subsector.- African countries have a gamut of formal and informal border measures.

-the regulations undermined Africa’s agri-food comparative advantage.- largely due to inadequate science & technology.- poor education for agricultural technology adoption.- incapacitated institutions.- inadequate access to market information.

• Opinions diverge as to what undermines Africa’s market access in agri-food trade.- A school of thought opined that the border measures are responsible.- Another posits that it is the inability to produce quality & adequate output demanded.

- owing to the domestic supply constraints.

• Evidence from empirical studies indicates that:- the magnitude of tariffs effect on some agri-food trade is continuously declining.

- in the trade between Africa and the developed countries.- main challenges to agri-food trade are the NTMs – SPS stand out.

• SPS are often the most use of NTMs. - Gourdon and Nicita (2013)

- added to the series of costs faced by exporters.- involve upgrading of facilities, improvement in human, management and institutional

capacities.- SPS can almost double the tariff effects for some products. – Moise and Le Bris (2013).

• Preponderance and stringency of agri-food border measures have implications for Africa.- Export flows and earnings, compliance costs and certification.- Often impact on the attainment of development aspirations:

- employment, poverty reduction and sustainable development.

• Africa’s rising concerns on the preponderance of the border measures.- EU tariffs exist for some Africa’s agri-food exports.

- effective on 22nd June 2018, 25% on:- e.g. vegetables, fruits, cereal, sugar. - WTO (2019)

- EU continues import tariffs on sorghum, maize seeds (to €5.32/tonne) in 2014. – WTO (2019)

- incidences of NTMs/SPS, entry price system in the EU.- frequent use of the precautionary principle in the SPS agreement.- path dependence.- generic commodity rejection.

- Rule of origin in the US- introduced addition in-quota for imported raw sugar cane.-Different layers of regulations and agencies-limited AGOA coverage

• On this basis, I comparatively evaluate border measures for Africa’s agri-food:- within Africa, in the EU and the US.

The Context

Border Measures on Africa’s Agri-food in the EU and US• Tariffs and NTMs are used to regulate influx of all kind of agri-food.

- some of which are injurious to health and the environment.- while the regulations sometimes are to protect domestic farmers.

• Africa’s agri-food exports are faced with some border measures.- in the EU, US and within Africa (intra-Africa).- NTMs are most used, of which SPS are preponderance.

- tariffs are reducing owing to trade agreements.

• SPS are impose to ensure food safety.• Compliance difficulty for African farmers owing to:

- inadequate science and technology.- in terms of modern laboratories, seeds, production/processing methods.

- institutional strength - to enforce quality, commodity handling, storage, transport.

- education/literacy – farmers/producers.

• African agri-food are confronted with the following measures at the borders:

• The US sets eligibility criteria to its market access.- based on conformity to the import treatment

requirements.• For the fruits and vegetable imports:

- 24 African countries are eligible for fruits imports.- 15 eligible African countries for vegetable

imports.• For fruits imports:

- South Africa (13), Morocco (12) & Tunisia (9) had the highest number of eligible commodities.• For vegetable imports:

- Egypt (8), Nigeria (7), Kenya & Morocco (6) had the most eligible commodities.

• More fruits commodities are eligible than vegetable.

• North Africa has more market access than others.- in terms of intensive & extensive margins of

export.

7

2 2 2 2 2 2

4

2 2

1

3

2 2

12

1

2 2 2 2

13

2

9

6

4

8

6

3

6

3

7

4

3

4

2

3 3

2

Figure 1: List of Eligible African Countries and the Number of Fruits and Vegetable Exports to the United States as of 2014

Fruits Vegetable

Source: Compiled from USDA, Animal and Plant Health Inspection Service.

The United States Market

• In terms of the eligible commodities:- 16 Africa’s fruits items are eligible.- and 16 vegetable commodities.

• For fruits:- bulk of the countries export banana

(20) and pineapple (22).- the least exported commodities are

cranberry, kiwi and strawberry.

• For vegetable:- Garlic and mushrooms are the most

exported with 15 countries apiece. - bell pepper, carrot, eggplant, okra

and spinach the least exported.

• More fruits market access than vegetable.

0

5

10

15

20

25

Appl

eAp

ricot

sBa

nana

Cher

ries

Cran

berr

yGr

apef

ruits

Grap

esKi

wi

Lem

ons

Oran

ges

Peac

hes

Pear

sPi

neap

ple

Plum

sSt

raw

berr

yTa

nger

ines

2 3

20

1 1

46

13 4 4

6

22

5

1

4

Fig. 2a: Eligible Africa's Fruits to the United States as of 2014

Eligible Country

0

2

4

6

8

10

12

14

16

Artic

hoke

s

Aspa

ragu

s

Bell

Pepp

ers

Broc

coli

and

Caul

iflow

er

Brus

sels

Spro

uts

Cabb

age

and

Bras

sicas

Carr

ots

Eggp

lant

Garli

c

Gree

n Be

ans

Mus

hroo

ms

Okra

Onio

ns

Pota

toes

Spin

ach

Tom

atoe

s

Num

ber o

f elig

ible

coun

try

Fig. 2b: Eligible Africa's Vegetable to the United States as of 2014


• Not all the eligible exporters actual export to the US.

• Out of the 20 eligible banana exporters,- only 35% of them exported (7).

• Pineapple recorded 18% of exporters.• For grapefruits and oranges were

100%.

• 10 out 15 eligible exporters of garlic and mushrooms access the market.

• One would want to ask:

- WHAT ARE THE CAUSES OF THE INABILITY TO ACCESS THE US MARKET?

0

1

2

3

4

5

6

7

Fig. 3a: Number of African Countries that Actually Exported Fruits to the United States, by 10 Top Eligible

Fruits as of 2014

0

1

2

3

4

5

6

7

8

9

10

Fig. 3b: Number of African Countries that Actually Exported Vegetable to the United

States, by 5 Top Eligible Vegetable as of 2014


Federal Food Safety Requirements State Regulations1. Genetically modified organisms (GMOs) Import Permits.2. Chemical and veterinary drug General Shipping Requirements.3. Pesticide Residues regulations Living Insects and Plant Diseases.4. Labelling Citrus Virus Diseases.5. Test for animal drugs – tolerance level Oriental Fruit Fly - Dacus Dorsalis.6. Feed Additives Mediterranean Fruit Fly - Ceratitis

Capitata.7. Nutrients, medicaments and weight limit Mexican Fruit Fly - Anastrapha Ludens.8. Mycotoxins - Aflatoxins Diseases and Insects of Onions.9. Veterinary biologics Coconut Disease and Insects.10. Natural toxins Banana Diseases and Insects.

11. Microbiological Contamination Sweet Potato Insects and Diseases.

12. Chemical Contamination Taro for Planting and Propagation.

13. food additives, and other chemicals Queensland Fruit Fly - Dacu Tryoni.

14. Storage methods Melonfly - Dacus Cucurbitae.

15. Poisonous or deleterious substances Packing Materials.

16. Bacteriological, and toxicologic standards Stored Dried Products.

17. Packaging and Advertising Enterable Fruits and Vegetables.

18. Specified synthetic and non-synthetic substances

19. Sewage sludge

20. Radiation

21. Non-organic substances and un-approved vaccines

22. Parasitic Infection

Table 1a: Food Imports Control System in the United StatesTechnical Measures

1. Methyl Bromide

2. Hot Water Dip

3. Hot Air

4. Irradiation

5. Vapour Heat

6. Cold Treatment

7. Fumigation then Cold Treatment

8. Cold Treatment then Fumigation

9. Quick Freeze

Non-Technical Measures

1. Ports Allowed

2. Permitted Import

3. Destination Restriction

4. Origin Restriction

5. Phyto Certificate Required

6. Preclearance Possible

7. Treatment Required

8. Origin Release from Treatment

9. Phyto Release from Treatment

Table 1b: Applicable Treatment Requirements for Fruits and Vegetable Imports to the United States

Source: Compiled from FAO (several years) USDA, Animal and Plant Health Inspection Service.

The US Market Access Conditions

Reason/Hazard 2002 2006 2011 2016 2017 Totala % of EU Totalb

Adulterated / Fraud 1 1 67 107 162 737 2.93Allergens 10 1 4 5 147 0.58Biocontaminants 11 5 6 3 156 0.62Biotoxin (others) 4 1 28 0.11Chemical Contamination (other) 380 5 1030 4.09Composition 24 86 15 9 606 2.41Feed Addition 1 59 0.23Food Additive and Flavouring 112 56 62 73 997 3.96Foreign Bodies 3 30 119 14 14 638 2.53GMO/Novel Food 9 17 11 11 446 1.77Heavy Metals 114 107 57 57 1607 6.38Industrial Contaminants 14 8 14 13 212 0.84Labelling absent/incomplete/incorrect 9 8 16 5 3 203 0.81Migration 13 63 40 21 501 1.99Mycotoxins 722 514 418 464 8587 34.12Non-pathogenic micro-organism 76 22 25 315 1.25Not determined/Other 7 45 34 3 2 421 1.67Organoleptic 0 24 87 27 20 546 2.17Packaging defective/incorrect 4 12 16 15 14 218 0.87Parasitic infestation 18 4 59 3 3 305 1.21Pathogenic micro-organism 40 114 159 452 2537 10.08Pesticide residues 129 15 219 142 133 2337 9.28Poor or insufficient controls 18 177 78 96 1078 4.28Radiation 3 11 12 1 6 153 0.61Residue of veterinary medicinal products 356 50 46 12 23 1288 5.12TSEs 1 18 0.07Total 920 1286 1901 1215 1610 25170 100.0

The European Union Market

Product 2002 2006 2011 2016 2017

Nuts and seeds 244 707 424 362 451

Fish and fishery products 396 380 217 102 82

Fruit and vegetables 110 258 360 62 285Herbs and spices 26 129 116 106 79

Food contact materials 2 109 125 45

Cereal and bakery products 3 140 64 16 39

Poultry meat and poultry meat products

112 7 14 47 330

Meat and meat products 37 28 50 10 39

Confectionery 2 34 32 8 17

Feed for food-producing animals

1 12 2

Animal nutrition 21 39 3

Cocoa and cocoa preparations, coffee and tea

15 26 16 27 14

Others 80 201 142 66 58

Total 1049 2070 1562 806 1442

Source: Author’s Compilation from RASFF and United Nations Industrial Development Organisation (UNIDO)

Table 2b: EU Rejections of Foods and Feeds ProductsTable 2a: EU Reasons for Rejection of Food & Feed Products by Hazard Category

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Freq

uenc

y (N

umbe

r)

Fig. 4a: Africa's Border Rejection in the European Union' Market

Africa

EU Total Rejection

Fig. 4b: The EU Border Rejections by Region, 2002-2017

Agri-food Export Rejection due to the EU SPS Measures

• Consistent rise in Africa’s food exports to the EU.

- except for 2012 & 2016.

• An oscillatory trend in the EU rejections of Africa’s food exports.

• not always the case that the EU rejection increases with rise in export.

- indicating no feedback relationship.- owing to the MFN principle.

- FSR not directed to Africa.0

5

10

15

20

25

30

35

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Fig. 5: Africa's Food Exports($'Billion) and the Corresponding Incidence of Border Rejection

Rejection

FoodExport

01/07/2019 16

Africa’s Agri-food Export and Border Rejection in the EU

• Decision rule. The thinner the colour shape the more adversely effect.

• Asia & Africa are mostly affected by the rejections.

• 2000-2017 average regional export value per rejection:

- Asia = $22 million- Africa = $71 million- Latin America=$142 million- North America=$213million- Oceania - $347 million- Europe - $383 million0

500

1000

1500

2000

2500

3000

3500

4000

Figure 6a: The Composition Effects of Agri-food Exports Value Per Unit Border Rejection ($'Million)

Africa Asia Europe Latin America Northern America Oceania

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Perc

ent

Figure 6b: The Compositional Effects of Food Exports Value Per Rejection

Africa Asia Europe Latin America Northern America Oceania

01/07/2019 17

Monetisation of Agri-food Border Rejections in the EU

EPA TAs with NA EBA GSP+ GSPAfrica MarketAccess to the EU

Duty- and quota-free access foreverythingexcept arms.

Duty- and quota-freeaccess (with someexceptions for agri-food & fish).

Duty-andquota-freeaccess foreverythingexceptarms.

Duty-free accessfor over 66% ofproducts.

Lower EU tariffs on66% of products.

Beneficiaries 12 countries ofSub-SaharanAfrica

4 North Africancountries

32 Leastdevelopedcountries(LDCs)

1 country (CaboVerde)

2 other Africandevelopingcountries (Nigeriaand CongoBrazzaville)

Duty-free Africa’s Exports (% of Tariff lines)EU US China India

Schemes for least-developedcountries

100% except arms 82% 97% 94%

Schemes for developing countries(GSP)

57% (+reduced ratesfor most otherproducts)

68% No Scheme

Other unilateral schemes: GSP+ (EU),African Growth and Opportunity Act(USA)

89% 84% No Scheme

Bilateral agreements (EPA/FTA) 100% except for arms+ few exceptions forSouth Africa & NorthAfrican countries

Almost no agreements in place (only US-Morocco)

Special Duties on ImportsEntry Price System Additional prices on

exporters of 15 fruitsand vegetable withlower prices than EUdomestic prices.

Not available

Table 3: Market Access for Africa’s Agri-food Exports in the EU

Source: European Commission and Kareem, et al. (2017).

• 15 additional signatories areawaiting EPA regionalapproval.

• Tariff imposition for someagri-food in the EU-NorthAfrica trade agreements.

• EBA implies some duties forcountries outside thearrangement.

• GSP+ and GSP are limited inproduct and duty coverage.

• Some similarities exist in the agri-food import regulations in both markets.- 15 similar food safety measures exist.

- but the tolerant levels differ.• EU imposes 9 SPS that are not in the US

portfolio.• 25 US agri-food import treatments not in the EU.

- 9 of them are SPS measures.- 16 remaining measures are non-technical.

• The US has different layers of regulations.- at the states and federal levels.- with multiple agencies’ regulating on same

items.- e.g. APHIS, FDA, EPA & others on

aquaculture.• EU has harmonised their SPS measures.

-25

-20

-15

-10

-5

0

5

10

15

Regulatory Similarity and Differential between the EU and the US

European Union United States

Figure 7: The EU and US Regulatory Differential and Similarity

Source: Compiled from RASFF and USDA, Animal and Plant Health Inspection Service.

• Intra-Africa trade expansion offers the opportunity for growth and poverty reduction.

• To unlock this opportunity, countries have to substantially reduce border measures.- Especially for agri-food trade

- through modernisation and simplification.

• Intra-Africa trade is the lowest globally (17%) in 2015. – UNCTAD (2017)

- Compared with 50% in North America & 62% in the EU.- despite the low Intra-Africa trade in all products,

- the agri-food trade has been improving over the years.- from 16% in 1995 to 25% in 2015.

- lower to expectation, though.- agri-raw materials decrease from 14% in 1995 to 10 in 2015.

The Intra-Africa Agri-food Trade

• Part of the factors inhibiting agri-food market access in Africa is the NTBs:- Hard border measures:

-transportation costs, poor infrastructure & ports inefficacies, weak institutions. - Soft border measures

- technical measures: quality standard regulations-non-technical measures: customs procedures, excessive documents

requirements, graft, poor logistics.

• Farmers’ gain more from a 10% NTBs reduction than from the same tariffs cut.- This is the basis for the concerns over the preponderance of NTBs.

- focus now on improving trade flows through trade facilitation.-facilitating trade could reduce compliance cost by between 12.5-17%

(Adekunle & Filson, 2015).-could enhance agri-food exports through more investments in agriculture.

• Intra-Africa agri-food export has improved (25%) in 2015.

- conformity with Seck, et al.(2010).

• While export of agriculture raw-materials has plummeted.- 14% to 8%.

• While intra-Africa agri-food export increases that of the EU decreases.

• Greater access of Africa’s agri-food to the EU than the US.

0

10

20

30

40

50

60

1995 2005 2015

FIG. 8B:AFRICA'S EXPORT STRUCTURE BY PARTNER AND PRODUCT GROUP (%)

All Food_Africa All Food_EU All Fodd_US

0

5

10

15

20

25

All Products All Food Agriculture RawMaterials

Fig. 8a: Intra-Africa's Export Structure (% of Total Export)

1995 2005 2015

Africa’s Export Structure

Source: Compiled from UNCTAD Handbook of Statistics (Several Years)

• In absolute term, intra-Africa trade has improved.- but relatively, it is the lowest in

the world.- compared to EU (62%) & FTAA

(55%) in 2014.

• As of 2014, SSA has the highest cost to import and the regions.- ($3000/container). - the US & the EU has the lowest.

0

10

20

30

40

50

60

70

80

CEPG

L

COM

ESA

ECCA

S

ECOW

AS

MRU

SADC

CEM

AC

UEM

OA

UMA

FTAA

NAFT

A

ASEA

N EU ACP

perc

ent

Fig.9a: Intra-Africa Export of Groups as Percentage of Total Exports of Each Group

1980

1990

2000

2010

2015

2005

2010

0

500

1000

1500

2000

2500

3000

3500

SSA

LAC

EAP

CEB

MEN

ASo

uth

Asia

USA EU

Alge

riaAn

gola

Egyp

tEt

hiop

iaKe

nya

Mor

occo

Nige

riaSo

uth

Afric

aSu

dan

Tanz

ania

Fig. 9b: Cost to Import (US$ per Container)

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Intra-Africa Exports and Market Access

Source: Compiled from UNCTAD Handbook of Statistics (Several Years)

0 20 40 60 80 100 120 140

SSA

LAC

EAP

CEB

MENA

South Asia

USA

EU

Algeria

Angola

Egypt

Ethiopia

Kenya

Morocco

Nigeria

South Africa

Sudan

Tanzania

Fig. 10a : Documents to Import (Number)

2005 2006 2007 2008 2009

2010 2011 2012 2013 2014

0

10

20

30

40

50

60

70

80

90

SSA

LAC

EAP

CEB

MEN

ASo

uth

Asia

USA EU

Alge

riaAn

gola

Egyp

tEt

hiop

iaKe

nya

Mor

occo

Nige

riaSo

uth

Afric

aSu

dan

Tanz

ania

Days

Fig. 10b: Time to Import to Africa

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Africa’s Market Access Barriers

• More than 10 documents arerequired to import to SSA.

- while average of 2 and 4 arerequired in the US and the EU.

• As of 2014, it takes about 40 days toimport to SSA.

- It is less than 20 days in LAC.- the US is 4 days and the EU is 10

days.

Source: Compiled from the World Bank WDI (Accessed in November, 2018)

0

1

2

3

4

5

6

Inde

x

Fig. 11a: Burden of Customs Procedure

2007

2008

2009

2010

2011

2012

2013

2014

2015

20160

20

40

60

80

100

120

140

160

180

200

Alge

riaBe

nin

Burk

ina

Faso

Cabo

Ver

deCe

ntra

l Afri

can

Repu

blic

Cong

o, D

em. R

ep.

Cote

d'Iv

oire

Egyp

t, Ar

ab R

ep.

Eritr

eaGa

bon

Ghan

aGu

inea

-Biss

auLe

soth

oLib

yaM

alaw

iM

aurit

ania

Mor

occo

Nam

ibia

Nige

riaSe

nega

lSi

erra

Leon

eSo

uth

Afric

aSu

dan

Tanz

ania

Tuni

siaZa

mbi

a

Inde

x

Fig. 11b: The Ease of Trading in Africa

2015

2016

Africa’s Market Access Barriers

Source: Compiled from the World Bank WDI (Accessed in November, 2018)

The Challenge Solution1. Protective Tariffs Tariff liberalization2. Burdensome Customs Procedures & corruption Automated Customs procedures

3. Weak Institutional Enforcement & graft Strong Institutions

4. Agencies Duplication of Functions Synchronization of government agencies and delineation oftheir duties.

5. Homogeneity of agricultural export commodities Extensive agricultural commodities’ export promotion.

6. Poor Infrastructure Improvement in infrastructural facilities.7. Compliance Certification Difficulties Simplification of compliance certificate procedure

8. Heterogeneous Standards Requirements Standards Measures Harmonization

9. Inadequate Application of Equivalent Principle Adherence to Equivalent principle

10. Rules of Origin Liberalization of Rule of Origin assessment11. Trade Licenses Duplicated licenses elimination and harmonization of permit

12. Non-existence of Dispute Settlement Establishment of Dispute Settlement Mechanism

13. The preponderance of Safeguard Measures Safeguard measures incidence reduction

14. Incidences of Anti-dumping and CountervailingMeasures

Liberalizing Anti-dumping and Countervailing Measures

Table 4: Intra-Africa Agri-food Market Access Challenges and Solutions

Factors Inhibiting Agri-food Intra-Africa Market Access.

Source: Compiled from Various Sources

68

82

74

51

25

6663

81

72

41

19

5957

79

65

34

14

5152

75

57

28

10

45

0

10

20

30

40

50

60

70

80

90

Africa Eastern Africa Central Africa Northern AfricaSouthern Africa Western Africa

Fig. 12a: Share of Africa's Agricultural Sector Employment in Total Employment (%)

1980

1990

2000

2010

0

10

20

30

40

50

60

Africa EasternAfrica

CentralAfrica

NorthernAfrica

SouthernAfrica

WesternAfrica

1980 44.3 49.6 49.4 30.1 43.8 40.71990 45.9 50.3 50.5 35.7 40.6 40.62000 47.1 51.1 49.8 39.4 41.6 41.42010 48.5 51.3 50.8 42.8 42.5 43.3

perc

ent

Fig. 12b: Share of Female Employment in Total Africa’s Agricultural Sector Employment

Africa’s Agricultural Sector Employment

Source: Compiled from FAO Statistics

Previous Findings

Previous Findings

• Tariffs have limited impact on Africa’s inability to access the EU & USA markets.- incidences of non-tariff measures did impacted – SPS/TBT. Kareem (2016).

-more Africa’s agri-food access the EU market than the US.- the EU SPS are more restrictive to Africa’s fruits & vegetable than in the US. Kareem (2018).

- especially at the decision to export.

• Africa’s border measures adversely impact on trade costs. Hoekman & Shepherd (2015).

• Seck, et al. (2010) finds extensive police bribery and border officials in intra-Africa trade.

• Africa’s firms face the greatest cross-border trading hurdles in the globe. (Seck, 2016)

• Reduction in Africa’s border measures improves social welfare outcomes. (Sakyi, et al. 2018)

• Shepherd (2016) finds that improve trade facilitation enhances Africa’s agricultural trade.

The Conclusion

The Conclusion• Africa’s agri-food exports face different markets’ border measures.

- the EU has stringent NTMs – SPS, Entry Price System.- US has layers of import regulatory system.- African markets have the most strenuous non-technical measures (informal border barriers).

• Africa needs to trade among themselves.- by aggressively enhancing their ease of trading.

- through accelerated trade facilitation measures.

• The US should synchronise the import treatment requirements.- reduce rules of origin requirements in AGOA.

• The EU should reduce the tariffs on imported sugarcane, rice, cereal.- reduced the frequency of the SPS agreement precautionary principle.- eliminate path dependence/generic rejection in agri-food border rejections.

• Beyond the Continental FTA in Africa, the continent must embark on policy/programme that:- eliminate or reduce the informal cross-border bottlenecks to enhance intra-regional trade.