Implementing food-based dietary guidelines for - United Nations ...

Trade, development, and regulatory issues in food
Sunder Ramaswamy and Brinda Viswanathan
Abstract
Trade in food and animal products has increased several-fold
in the past decade, and simultaneously regulations
governing the movement of such products across
national boundaries have also increased. The present
study reviews harmonization in food trade regulation by
focusing on nutritional aspects to understand its role in
enhancing world trade on the one hand and consumer
interest and welfare on the other. Harmonization to a
large extent brings in more regulation from the developed
world acting through their governments, consumer
organizations, and multinational companies; it does not
seem to address, in general, the concerns of the large segments
of the poor population for whom agriculture and
food trade are the main sources of livelihood. There is a
lack of quantifiable estimates of the loss in well-being of
the disadvantaged. However, there is substantial research
focused on the potential harm to developed nations as
a result of nonadherence to the rules. Clearly, lack of
adequate infrastructure, resource constraints, and weak
institutions not only result in poor food safety regulation
within developing countries but also remain barriers to
realizing the greater potential benefits from increased
trade. Harmonization of standards would have some
losers and some winners, but to make it more inclusive,
scientific knowledge alone may not be adequate; social
and cultural aspects also need to be considered, since
food systems differ among regions, with varying preferences,
local resource availability, and levels of economic
development. Improvement in governance in many
countries not only would ensure better participation in
international rule-making and the negotiation process
for fairer trade but also would result in effective domestic
legislation to ensure safer health for citizens, resulting in
higher overall well-being.
Sunder Ramaswamy is affiliated with Middlebury College,
Middlebury, Vermont, USA; Brinda Viswanathan is affiliated
with the Madras School of Economics, Chennai, India.
Please direct queries to the corresponding author: Sunder
Ramaswamy, Department of Economics, Middlebury College,
Middlebury, VT 05753, USA; e-mail: sunder.ramaswamy@
middlebury.edu.
Key words: Food safety, SPS and TBT agreements,
trade in food
Introduction
At the dawn of this century, the value of international
trade in food exceeded US$400 billion per annum (with
the estimated total value of international trade being
US$6.5 trillion) and accounted for on the order of 500
million tons of food products, and on average the trade
has continued to grow significantly since then [1]. The
dominant share belongs to the developed countries in
terms of both exports and imports. The trade share of
developing countries has increased over the years, but
developing countries remain mainly exporters of primary
products and importers of processed food. The
present trade scenario is complicated by several factors:
the presence of World Trade Organization (WTO) rules
since its inception in 1995 on the one hand, and innovations
such as genetically modified foods and food
fortification, with lowered immunity of the populations
in developed countries on the other. The complication
in the trading rules arises from the varying standards
set by importing nations. Most often the differences
between trade and regulatory standards arise from the
lack of concrete scientific evidence on the potential
health impacts, and therefore the justification of such
standards is questioned. Thus, smooth facilitation of
trade calls for a harmonization of food safety standards
that are transparent and easy to comply with.
International food safety standards have prevailed for
a very long time and so has trade in food; but why the
need for harmonization now? The world population
will reach 8 billion by 2020, with about 96% of growth
concentrated in the developing world. Overall increases
in population and, in particular, increases in urban
population pose great challenges to the food systems
of the world, from production to distribution to consumption.
With greater emphasis on trade as an engine
of growth and poverty reduction, developing countries
around the globe are choosing (or in some cases, are
forced) to liberalize their trade regimes. Trade in food
Food and Nutrition Bulletin, vol. 28, no. 1 (supplement) © 2007, The United Nations University. S123