The World Bank has published two related trade policy notes looking at the costs of compliance with trade requirements and moves towards regional food quality standards in Southern and Eastern Africa. The high costs of verifying compliance with quality standards in order to be able to trade is highlighted. The cumulative effect of these costs, it is maintained, can act as a significant barrier to trade. In addition in some instances mandatory standards have ‘little or no bearing on public health’.

It is argued that, from a value chain perspective, any cost savings in meeting trade requirements potentially increases producers’ and processors’ incomes or benefits consumers. ‘Trade permits and certifications fees’ at border posts are seen as a particular burden, with examples being cited where costs incurred are between 6 and 17% of the cost at final point of sale. While numerous commitments have been made to address this issue, serious problems remain, which are regularly being compounded by the introduction of formal import and export restrictions.

Similar trade requirements also apply to a range of agricultural inputs (seed and agro-chemicals), which increases costs further. Certification of origin under preferential trade agreements can further increase costs.

It is argued that ‘while many trade requirements do serve legitimate purposes, it is clear that there is considerable scope to streamline the procedures and eliminate duplicate requirements.’ A call is made for the conduct of ‘detailed assessments of current trade requirements to identify areas of overlap and opportunities to streamline trade procedures’.

Across Southern and Eastern Africa, the multiplication of often different national standards has been identified as a ‘significant impediment to regional free trade’. This has led to calls for regional harmonisation of standards. However, a companion World Bank paper argues that this process of harmonisation can itself carry costs, with careful consideration being required to identify the most efficient and cost-effective means of aligning national standards to reduce the costs of trading for all types of producers. The paper compares EAC efforts to establish harmonised common standards across 42 staple crops and experience elsewhere in the region.

Three approaches are identified:

• regional harmonisation: arising from the replacement of national standards by common mandatory regional standards;
• equivalency agreements: where countries recognise their respective standards as a basis for trade;
• mutual recognition agreements, involving acceptance of certain aspects of each country’s SPS measures.

The analysis implicitly warns against the verbatim adoption of Western standards, noting that Western production conditions, challenges and realities are quite different to those faced in African countries, as are the respective capacities for conformity assessment.

It also cautions against mandatory standards that reach beyond essential SPS and human health-related issues, since these can impose high costs and systematically discriminate against smallholder farmers.

The analysis suggests that the Zambian approach, which establishes standards that become a reference point for commercial transactions between buyers and sellers (with SPS and public health-related issues being dealt with on a mandatory basis through SPS regulations), can be much more cost-effective in opening up trade and improving producer incomes, while protecting both consumers and buyers.

It advocates a voluntary harmonisation approach, in view of capacity constraints across the region and the cost-increasing effects of a mandatory approach. However, it recognises that the absence of mandatory standards can allow governments to use SPS and other quality concerns to close borders.

In contrast to conventional wisdom, however, the analysis maintains that mandatory harmonisation can create significant barriers to trade (e.g. in using Zambia’s 1.5-million tonne maize surplus to meet regional food deficit needs in Eastern Africa), while ‘mutual recognition and equivalence agreements … could go a long way to improving the regional trade environment’, since the alternative risks ‘setting the bar too high or of raising costs to uncompetitive levels’, leading traders to favour extra-regional procurement policies, thereby undermining the core policy objective of intra-regional trade development.