1. ANALYSIS OF FISH TRADE POLICIES IN DEVELOPING ASIAN COUNTRIES: LIBERALIZATION VS. BARRIERS Madan Mohan Dey Mahfuzuddin Ahmed Khonder-Murshed Jahan In collaboration with Research partners from Asian countries

2. 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

3. 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

4. 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)

5. 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)

6. 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).

7. Overview of Trade Liberalization Process  The average preferential tariff for Japan, EU, USA are: COUNTRYBEFORE WTOAFTER WTO Japan28.6 4.1 EU17.410.7 USA20.6 0.9

8. Table. Import Taxes of Fisheries Product in EU and Japan ProductEurope UnionsJapan ConventionalGSPMFNGSP Tuna (yellow fin) - Fresh - Frozen - Canning 22 20 24 000000 3.5 9.6 3.5 6.4 Skipjack - Fresh - Frozen - Canning 22 24 000000 3.5 9.6 3.5 6.4 Tuna (blue fin) - Fresh - Frozen - Canning 22 24 000000 3.5 9.6 3.5 6.4

9. ProductEurope UnionsJapan ConventionalGSPMFNGSP Sardine - Canning12.510.69.67.2 Indian Mackerels - Fresh - Frozen - Canning 20 25 0 17.5 0 9.6 0 7.2 Shrimp - Fresh - Frozen - Canning 12 7 4.2 7 1 4.8 1 3.2 Table. Import Taxes of Fisheries Product in EU and Japan

10. ProductEurope UnionsJapan ConventionalGSPMFNGSP Scallops - lives, fresh, chilled -canning/ processed 8 20 2.8 7 10 9.6 7.2 Crustacean - lives, fresh, chilled - canning/ processed - others processed 10 20 8.2 7 6.7 7 6.7 Table. Import Taxes of Fisheries Product in EU and Japan

11. ProductEurope UnionsJapan ConventionalGSPMFNGSP Live fishes - fresh water fish - ornamental sea fishes - carp and gold fish - others Free 7.2 8 2 – 16 00000000 0 3.5 1.7 00000000 Frog legs6.4000 Snails0000 Sea weeds0000 Table. Import Taxes of Fisheries Product in EU and Japan

12. 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

13. Leading Fish Exporting Countries in terms of value (US$’000) Country199719981999 Thailand4,334,2224,038,0544,122,627 Norway3,422,0703,682,5753,781,095 China3,045,4392,744,3923,064,160 USA2,912,8702,451,5593,003,763 Denmark2,669,6632,915,0172,891,381 Canada2,168,1502,278,7032,631,777 Taiwan1,789,0851,592,7791,774,467 Chile1,851,4981,649,4001,757,922 Netherlands1,434,6461,373,5101,754,731 Spain1,493,7801,552,3591,619,411 Indonesia1,637,4201,640,1801,551,391 Korea1,484,0291,360,7801,508,621

14. Tariff rate before and after WTO CountryBefore WTOAfter WTO China47.2 (1991)11.17 – 23.3 (2001) Thailand60 (1995)5-30 (1999) Philippines10-60 (1994)3-15 (2000) India60 (1993/94)35.20 (2002/3) Bangladesh59.33 (1991/92)28.23 (2000/2001) ~ Fish imports in the developing Asian countries have been liberalized substantially in recent years

15. Import tariff rates on selected aquatic products in China Aquatic Products Tariff Rate (as of Dec 2001) Final Bound Tariff Rate Date of Final Bound Tariff Rate a Live eels16102004 Other live fish b 1210.52002 Fresh or chilled fish - Trout12 2002 - Pacific salmon 11.7102002 - Herrings16122003 a – date of implementation refers to 1 January of the year indicated b – other live fish exclude live eels, ornamental fish and fish fry

16. Import tariff rates on selected aquatic products in China Aquatic Products Tariff Rate (as of Dec 2001) Final Bound Tariff Rate Date of Final Bound Tariff Rate a Frozen fish - Trout12 2002 - Eels16122003 - Pacific salmon 16102004 Fresh or chilled fish fillets 24122005 Frozen fish fillets 23.3102005

17. Import tariff rates on selected aquatic products in China Aquatic Products Tariff Rate (as of Dec 2001) Final Bound Tariff Rate Date of Final Bound Tariff Rate a Frozen shelled shrimp and prawn Frozen unshelled shrimp and prawn 17.552003 Frozen crabs23.5102003 Source: China’s WTO Protocol of Accession, November 2001

18. 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.

19. 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.

20. 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

21. Status of HACCP Implementation in Selected Asian Countries CountryLegal Status/ National Regulations Implementing Agency BangladeshFish and Fish Products (inspection on quality control) Ordinance 83/89/97 Govt. (Directorate of Fisheries) ChinaYet to implement Indonesia~ Ministerial decree 41/1998 ~ DGF decree 4128/1998 ~ Ministry of Fisheries ~ Provincial laboratories PhilippinesPhilippines Fisheries Code, 98 (and various FAOs) Bureau of Fisheries & Aquatic Resources MalaysiaVoluntaryDepartment of Health on request ThailandVoluntary~ Department of Fisheries ~ Food & Drug Administration ~ National Food Institute ~ Private Labs Sri LankaFish Product (export) regulations, 1998 ~ Department of Fisheries ~ Sri Lanka Standard Institution (SIS)

22. 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.

23. Table. Regulatory/ Technical standards on Fish and Fishery Products Imposed by Selected Trading Partners CountryFish and Fishery ProductDetails 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%)

24. CountryFish and Fishery ProductDetails 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

25. CountryFish and Fishery Product Details of the standards Japan1. 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

26. CountryFish and Fishery ProductDetails of the Standards Japan3. Frozen squid 4. Processed seafood 5. Canned tuna 1. Sanitary standard under the 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. 1. Sanitary standard under the 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

27. CountryFish and Fishery ProductDetails of the Standards 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 Table. Regulatory/ Technical Standards on Fish and Fishery Products Imposed by Selected Trading Partners

28. CountryFish and Fishery ProductDetails of the Standards 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 Table. Regulatory/ Technical Standards on Fish and Fishery Products Imposed by Selected Trading Partners