Environmental Considerations Affecting Trade In Agriculture And Agro Industrial Goods Within The Arab Region.

Environmental Considerations Affecting Trade in Agriculture and Agro Industrial Goods within the ARAB Region.

(Final Draft Ð'- 26/04/2007)

Abbreviations and Acronyms:

AOA Agreement on Agriculture (WTO)

AMS Aggregate Measure of Support

ATPSM Agricultural Trade Policy Simulation Model

EU European Union

FTA Free Trade Agreement (or Area)

FAO Food and Agriculture Organization

GAFTA Greater Arab Free Trade Area

GDP Gross domestic product

GSP Generalized System of Preferences

LDC Least Developing Country

MOA Ministry of Agriculture

MFN Most Favored Nation

SP Special Products

STE State trading enterprise

TRQ Tariff Rate Quota

UNCTAD United Nations Conference on Trade and Development

WTO World Trade Organization

1) Background: The Arab region has been facing a decline in its regional trade in Agricultural & Food , within its regional boundaries and with its international trading partners. Issues related to South / South Trade Liberalization has been repeatedly discussed and emphasis on establishing despute resolution mechanisms, establishing regional competitiveness and defining regional comparative advantages- country by country- are still in the making.

Market access is in all respects diminishing with time and as trade liberalization agenda's are advancing; Environmental requirements are also on the raise, as global warming is forcing its environmental agenda on the ESCWA region in unprecedented pace and the regions' trade is up to face new challenges. This is also challenging the region's trade and related social infrastructures, increasing the ecological fragility, access to water and natural resources, and resulting in political disputes and constraints and challenging the millennium goals of alleviating poverty, unemployment, as well as availing water and food security constraints.

Food Safety Issues are on the other hand are shaping the areas agriculture, agribusiness, and agro- industrial production. The regions import's, as well as intraregional trade is being scrutinized for its food safety with new paradigms that require agricultural, as well industrial producers, address conventional food safety issues (pesticide residues, veterinary medicinal residues, mycotoxins, dioxins, microbiological quality of fresh fruits and herbs,) as well as an effective control on long a list of food and feed additives and contaminates.

All of the above is bringing challenges to the governmental institutions in the region and challenging its outdated standards and food laws, and established government labs and regulation enforcement agencies. Universities are being called on to support governmental institutions in providing required human resources and in training of government personnel.

2) Inter- Arab Trade Flow Dynamics: Inter- regional trade has been plagued with traditional issues of rules of origin, sanitary and SPS issues, as well as traditional technical barriers to trade, not to mention administrative as well as political constraints that close borders once in a while between neighboring states.

In 1998, only 2.9% of all goods entering or leaving MENA countries came from or went to another MENA country. This figure has remained roughly constant for more than 2 decades. In contrast, more than 40% of MENA's trade in 1998 was with the European Union. For Maghreb countries the EU accounted for more than 60% of total trade. Intra- regional trade as a share of total trade is more than 20 times higher in the EU and more than 15 times higher in the North America free trade association (NFTA) then it is in MENA.

I n a recent report released by the Federation of Chambers of Commerce, Industry and Agriculture in the Arab region (report # 12 of Feb. 2005) market access constraints have been tabulated. Bureaucratic trade restrictions at country of origin seem to restrict exports. Such constraints include issuing of export import licenses, banks and money transfers, governments certification procedures, and issuance of exports and country of origin certificates, including archaic customs formalities and bureaucratic delays in conducting border entry custom formalities.

This report, which was presented to the Arab League's Economic and Social Council, aimed to highlight the barriers that are hindering the creation of the Greater Arab Free Trade Area (GAFTA). It was prepared aiming to resolve the major issues that are hindering the region's trade, and which included:

- The region's relative lack of openness to diminishing their custom duties

- The diverging economic modules in the region including the centrally run economies of the region.

- The diverging standards, specifications, and regulations and the limited initiatives to harmonize same.

- The high increase in cost of land transportation particularly of perishable, chilled, and refrigerated goods and the different enforcement mechanisms that are hindering land transport.

- The different phyto-sanitary requirements, at border inspection points, and the diverging legal formalities required by different inspection points.

See annex 1

Products Farm Processing Transportation Retail Table

Tahina (Hazards include microbial / Salmonellas & heat /Organoleptic damage) Good Agricultural Practices to be implemented in agricultural regions and control on transport within Sudan Controlling, warehousing of raw material during transit and storage and maintain GMP's (Good Manufacturing Practices) Long supply chains could extend from the Arab region to regional and Western markets, good sanitary practices include transport.