ANALYSIS OF FISH TRADE POLICIES IN DEVELOPING ASIAN COUNTRIES: LIBERALIZATION VS. BARRIERS Madan Mohan Dey Mahfuzuddin Ahmed Khonder-Murshed Jahan In collaboration

ANALYSIS OF FISH TRADE POLICIES IN DEVELOPING ASIAN COUNTRIES:

LIBERALIZATION VS. BARRIERS

Madan Mohan DeyMahfuzuddin Ahmed

Khonder-Murshed Jahan

In collaboration with Research partners from Asian countries

OVERVIEW/BACKGROUND

• Role of International Trade in Fisheries Products

Globalization of fish trade

- Value: stable at around 50% since 1980

- Quantity: increased from 32% in 1980 to 40% in 1999

OVERVIEW/BACKGROUND

• Role of developing countries

Net exporter

- Value: 50% export, 15% import

- Net export - increased from US$5 bil in 1980 to US$16.5 bil in 1999

Fish trade represents a significant source of foreign currency earnings

Performance of these countries is, however, dependent upon continued access to developed countries

OVERVIEW/BACKGROUND

• Traditional barriers to trade such as tariffs and quota have been partially liberalized through GATT and WTO

• Concern: Technical measures (such as food safety regulations, quality standards and leveling requirements) can impede free trade (particularly export from developing countries)

OUTLINE OF THE PRESENTATION 1. Overview of the trade liberalization

process in developing and developed countries

2. Regulatory framework in fish trade – SPS and TBT measures

3. Regulatory measures in three top fish importing countries (EU, Japan, USA)

4. Mechanism for implementing regulatory measures/standards in developing Asian countries

5. Benefit/cost of implementing SPS/HACCP standard in developing countries (Session 2)

6. Recommendations (Session 2)

Overview of Trade Liberalization Process

Developed Countries

Net importer (>80% of total fish import in value).

EU, USA & Japan are the 3 major importing markets for fish and fishery products contributing more than 77% of the total import (in value).

Tradition trade barriers (tariff and quota) have been reduced/eliminated.

Approximately 80-85% of the total international trade in fish products are covered under preferential trade agreement (most favoured nation tariff, generalized system of preference and other preferential trade agreements).

Overview of Trade Liberalization Process

The average preferential tariff for Japan, EU, USA are:

COUNTRY BEFORE WTO AFTER WTO

Japan 28.6 4.1

EU 17.4 10.7

USA 20.6 0.9

Table. Import Taxes of Fisheries Product in EU and Japan

Product Europe Unions Japan

Conventional GSP MFN GSP

Tuna

(yellow fin)

- Fresh

- Frozen

- Canning

22

20

24

0

0

0

3.5

3.5

9.6

3.5

3.5

6.4

Skipjack

- Fresh

- Frozen

- Canning

22

22

24

0

0

0

3.5

3.5

9.6

3.5

3.5

6.4

Tuna (blue fin)

- Fresh

- Frozen

- Canning

22

22

24

0

0

0

3.5

3.5

9.6

3.5

3.5

6.4



Sardine

- Canning 12.5 10.6 9.6 7.2

Indian Mackerels

- Fresh

- Frozen

- Canning

20

20

25

0

0

17.5

0

0

9.6

0

0

7.2

Shrimp

- Fresh

- Frozen

- Canning

12

12

7

4.2

4.2

7

1

1

4.8

1

1

3.2




Scallops

- lives, fresh,

chilled

-canning/

processed

8

20

2.8

7

10

9.6

7.2

7.2

Crustacean

- lives, fresh,

chilled

- canning/

processed

- others

processed

10

20

20

8.2

7

7

7

6.7

6.7

7

6.7

6.7




Live fishes

- fresh water

fish

- ornamental

sea fishes

- carp and

gold fish

- others

Free

7.2

8

2 – 16

0

0

0

0

0

0

3.5

1.7

0

0

0

0

Frog legs 6.4 0 0 0

Snails 0 0 0 0

Sea weeds 0 0 0 0


DEVELOPING COUNTRIES

• Thailand is the leading fish exporter

• China, Taiwan, Chile, Indonesia and Korea are the other major fish exporters

• Other Asian developing countries like India, Philippines, Vietnam, Malaysia and Bangladesh also have a significant contribution to world fish export

Leading Fish Exporting Countries in terms of value (US$’000)

Country 1997 1998 1999

Thailand 4,334,222 4,038,054 4,122,627

Norway 3,422,070 3,682,575 3,781,095

China 3,045,439 2,744,392 3,064,160

USA 2,912,870 2,451,559 3,003,763

Denmark 2,669,663 2,915,017 2,891,381

Canada 2,168,150 2,278,703 2,631,777

Taiwan 1,789,085 1,592,779 1,774,467

Chile 1,851,498 1,649,400 1,757,922

Netherlands

1,434,646 1,373,510 1,754,731

Spain 1,493,780 1,552,359 1,619,411

Indonesia 1,637,420 1,640,180 1,551,391

Korea 1,484,029 1,360,780 1,508,621

Tariff rate before and after WTO

Country Before WTO After WTO

China 47.2 (1991) 11.17 – 23.3 (2001)

Thailand 60 (1995) 5-30 (1999)

Philippines 10-60 (1994) 3-15 (2000)

India 60 (1993/94) 35.20 (2002/3)

Bangladesh 59.33 (1991/92) 28.23 (2000/2001)

~ Fish imports in the developing Asian countrieshave been liberalized substantially in recent years

Import tariff rates on selected aquatic products in ChinaAquatic

ProductsTariff

Rate (as of Dec 2001)

Final Bound Tariff Rate

Date of Final

Bound Tariff Ratea

Live eels 16 10 2004

Other live fishb

12 10.5 2002

Fresh or chilled fish

- Trout 12 12 2002

- Pacific salmon

11.7 10 2002

- Herrings 16 12 2003a – date of implementation refers to 1 January of the year indicated

b – other live fish exclude live eels, ornamental fish and fish fry

Import tariff rates on selected aquatic products in ChinaAquatic

ProductsTariff

Rate (as of Dec 2001)


Date of Final

Bound Tariff Ratea

Frozen fish

- Trout 12 12 2002

- Eels 16 12 2003

- Pacific salmon

16 10 2004

Fresh or chilled fish fillets

24 12 2005

Frozen fish fillets

23.3 10 2005

Import tariff rates on selected aquatic products in China

Aquatic Products

Tariff Rate (as of Dec 2001)


Date of Final

Bound Tariff Ratea

Frozen shelled shrimp and prawn

Frozen unshelled shrimp and prawn

17.5 5 2003

Frozen crabs

23.5 10 2003Source: China’s WTO Protocol of Accession, November 2001

Evolution of Regulatory Framework

Prior to GATT and WTO

1960: Codex Alimentarius Commission (CAC) by FAO/WHO

1993: CAC recommended hazard analysis and critical control point (HACCP) analysis. The CAC recommendation had no legal backing.

Evolution of Regulatory Framework

WTO Agreement

1. Agreement on the application of Sanitary and phytosanitary measures (SPS Agreement)

2. Agreement on technical barrier to trade (TBT Agreement)

Due to these agreements, CAC recommendation got de facto legal value at the international level.

SPS/HACCP

The SPS agreement provides harmonization of SPS measures of member countries with international standards.

HACCP: An important element of international standard guidelines in the compliance with HACCP

Most fish exporting Asia countries have adopted or decided to introduce seafood HACCAP

Status of HACCP Implementation in Selected Asian Countries

Country Legal Status/

National Regulations

Implementing Agency

Bangladesh Fish and Fish Products (inspection on quality control) Ordinance 83/89/97

Govt. (Directorate of Fisheries)

China Yet to implement

Indonesia ~ Ministerial decree 41/1998

~ DGF decree 4128/1998

~ Ministry of Fisheries

~ Provincial laboratories

Philippines Philippines Fisheries Code, 98

(and various FAOs)

Bureau of Fisheries & Aquatic Resources

Malaysia Voluntary Department of Health on request

Thailand Voluntary ~ Department of Fisheries

~ Food & Drug Administration

~ National Food Institute

~ Private Labs

Sri Lanka Fish Product (export) regulations, 1998

~ Department of Fisheries

~ Sri Lanka Standard

Institution (SIS)

Technical Standards/Measures

There is a proliferation of technical measures/standards notifications to GATT/WTO

There is a concern that these technical measures can act either explicitly or implicitly, as a barrier to trade in a similar manner to tariffs and quantitative restrictions.

Table. Regulatory/ Technical standards on Fish and Fishery Products Imposed by Selected Trading Partners

Country Fish and Fishery Product Details of the standards

European Union

1. General seafood

2. Boiled shrimp

1. Sanitary certification from the

Thai DOF

2. Producing factories are

inspected and certified by the

Thai DOF

1. GMO labeling

2. Production raw materials are

GMOs free

3. Eco-labeling

4. Benzoic acid control (not

exceeding 0.2% while shrimp

produced within the EU, 0.6%)

Country Fish and Fishery Product Details of the standards

European Union

3. Agricultural products

including fishery

products

4. Canned Sardine

1. GMO labeling

2. Certified by the component

authority

3. Name the list in the EU

establishment list

4. ISO 9002 and HACCP certified

1. Species labeling – only

Sardinella pitchdu is allowed to

enter the EU

2. Factory/commodity certificate

issued by the competent

authority

3. Certificate issued by the EU

council

Table. Regulatory /Technical Standards on Fish and Fishery Products Imposed by Selected Trading Partners

Country Fish and Fishery Product

Details of the standards

Japan 1. Frozen fish

2. Frozen shrimp

1. Sanitary standard under the

Food Sanitary laws, no trace of antibiotics

deposited

2. Quota restriction with code HS 0304 10110

1. Products from certified factories approved

by the Japanese Ministry of Public

Health

2. Sanitary standard under the Food Sanitary

laws, no trace of antibiotics deposited

3. Hundred percent inspection on antibiotics

(Oxolinic acid and Oxytetracycline) as

Thailand uses these antibiotics in shrimp

culture

Table. Regulatory/Technical Standards on Fish and Fishery Products Imposed by Selected Trading Partners

Country Fish and Fishery Product Details of the Standards

Japan 3. Frozen squid

4. Processed seafood

5. Canned tuna


Food Sanitary laws, no trace of

antibiotics deposited

1. Japan implements the Pre-

certification (equivalent to the

HACCP). Serious food safety

inspection based on the pre-

certification.


Food Sanitary laws, no trace of

antibiotics deposited

2. Imported only canned tuna

code HS 0304 10110

Table. Regulatory/ Technical Standards on Fish and Fishery Products Imposed by Selected Trading Partners


The United States

1. Frozen shrimp

2. Marine Prawn

3. Frozen crab

4. Frozen seafood

5. Canned seafood

1. Import restriction based on

environmental conservation

1. Prohibition of marine prawn

import that has no or inferior

measures or laws on sea turtle

protection.

1. Import restriction based on

environmental conservation.

1. Hazard Analysis and Critical

Control Point (HACCP)

certificate

1. HACCP certificate



The United States

6. Canned shrimp

7. Canned tuna

8. Canned sardine

9. Seafood product

1. Import restriction using

environmental standard, I.e.,

dolphin and sea turtle

conservation

1. Import prohibition of tuna and

tuna products from purse seine

that is harmful to dolphin

2. Current Good Manufacturing

Practice (CGMP) certificate

1. CGMP certificate

1. HACCP certificate


Documents

ANALYSIS OF FISH TRADE POLICIES IN DEVELOPING ASIAN COUNTRIES: LIBERALIZATION VS. BARRIERS Madan Mohan Dey Mahfuzuddin Ahmed Khonder-Murshed Jahan In collaboration