Regional harmonisation of food safety standards – the EU experience World Bank Regional Workshop Boao, China 26 – 27 June 2006 Wolf Maier, European Commission, Health and Consumer Protection

“Countries don’t have friends – countries have interests” (Otto von Bismarck, ) Is regional harmonisation in our interest?

Bilateral Trade Patterns Multiple Standards Non-transparent market access conditions High cost of compliance High vulnerability – no alternative markets Narrow product range Low volumes No economies of scale

Export to EU and the multilateral system Big markets International and National Standards apply Informal Standards (GAPs, others) Product range limited - SPS issues (e.g. cooked poultry) EU, US, Japan are not growing and are consumer markets Vulnerable to fluctuations, hypes and fashions Market entry – high cost of compliance Strong competition

Regional Trade Potentially much bigger market than EU Diversification, broader product range More value-added, processed products Regional Product Standards Regional consumer preferences Regional markets Regional economic growth

Regional Market Integration Market conditions to create more competitive companies and better-served consumers Strengthens your position in multilateral and bilateral trade negotiations as you have a lot to trade with Some challenges cannot be met unilaterally Promotes stability Greater independence from currency fluctuations Insultation from commodity price shocks

Equivalence Agreements vs Harmonisation 10 countries need 45 Equivalence Agreements (under the condition of reciprocity) 90 permutations for inspection and controls Vulnerable to political pressure and retaliation Labour intensive, non-transparent, costly Harmonised rules – one set of standards Animal health challenges demand consistent strategies on a regional scale

Political perspectives Emerging countries will be big winners of Doha round, but SPS issues will continue to limit market access Regional markets remain important economic risk management broader commodity range Small and medium size enterprises Harmonisation of standards is key to cut cost and develop these markets Increasing responsibility for global peace and development goals – address ASEAN disparities

Possible regional standards Animal Health Foot and mouth disease, avian influenza Plant Health Measures adapted to endemic situation Plant Protection Product authorisation, MRLs, GAPs Public Health Microbial Standards, HACCP, GMP Informal Standards Quality parameters

Prioritisation Current trade defines de-facto standards Identification of priority products for Regional Trade Involvement of Private Sector Priority setting No disruption of existing trade Identification of needs to expand opportunities Capacity building and technical assistance Stepwise expansion of harmonised areas Animal health is frequently the most important problem

Elements for Standard Setting Standard definition – for example CODEX Translation into national rules Implementation, Monitoring and Enforcement – Institutional capacity Certification Mutual inspection and control Dispute settlement How can these elements be organised?

Elements of Inspection and Controls Inspections should be made: By separate body, independent to political pressures On a regular basis and with a frequency based on risk Without prior warning (as a general rule) Effective official controls should be characterised by Staff free from personal interest Transparency, reporting Internal audits, Documented procedures Continuous training of staff

Harmonisation in the EU Public health: Started 1964 on fresh pork and beef Animal Health: Started also 1964 on pigs and cattle Plant health: Started 1977, overhauled in 2000 Pesticides: Harmonised rules adopted 1991 after 10 years of negotiation. Overhaul imminent. Border Inspection for imports from third countries: Harmonised since 1990 Rapid Alert System established.

Main elements of the Single Market The Single Market is NOT built on trust. It is built on permanent scrutiny and controls The EU Commission moderates the Standard Setting and has the right to make proposals Independent advice provides credibility Elaborate system of majority ruling gives adequate weight to the small Member States COM and FVO ensure consistent implementation of the harmonised rules Fair and independent dispute settlement mechanisms Democratic legitimation via EU Parliament

Management: The Standing Committee for the Food Chain and Animal Health Chaired by the Commission. Risk management body of government experts from all 25 Member States (plus candidates). Votes on draft legislation to be adopted by Commission in the area of animal health, public health, plants. Rapid procedures, 2-3 meetings per month in Brussels, around 300 standards and legislations per year Extra powers for Commission to manage crises. Dispute settlement: SCOFCAH provides first instance, European Court of Justice last resort.

Control: Food and Veterinary Office Located in Grange / Ireland. Around 160 staff 200 inspections per year 75% of inspections are in Member States; ensure that Community legislation on food safety, animal health, plant health and animal welfare is properly enforced; audit of quality of national inspection and control services; check on compliance within the EU and in third countries; inform stakeholders of the outcome of evaluations Reports are discussed in the Standing Committee and follow up action is surveyed.

Alternative solutions Mutual recognition of third party audits of establishments (e.g. Japan, EU, US export certification) Recognition of ASEAN audits and inspection Third party certification and audit A la carte system of regional standards, open to be joined any time, step by step. Compartmentalisation Avian flu may be an opportunity to get started Dispute settlement mechanisms are important: Lessons to be learned from NAFTA vs EU system?

Summary Multilateral and regional standard setting offer unique opportunities to ASEAN (plus 2?) Regional market integration has advantages Harmonisation is a rational strategy No need to copy the EU model – but it works Controls are better than trust Integration can be built step by step, product by product - priorities are needed Because it takes time, it is important to start now and keep the process alive

Documentation on the web General Information, link to FVO: Standing Committee for the Food Chain and Animal Health: Import Conditions: European Food Safety Authority: And if all fails, contact