With new US food safety regulations pending, potentially 80% of Jamaica’s food exports to the US (valued at US$118 million in 2010) could be adversely affected. Requirements due to come into force in the course of 2012 mean that ‘all processed foods entering the country must be tested by an accredited laboratory’. Some 50 US Food and Drug Administration (FDA) audits are already scheduled for early 2012 to verify compliance. The FDA will be empowered to ‘order a mandatory recall’ if it perceives a threat to health, and can ‘block food from facilities or countries that refuse inspections’.
To assist Jamaican food companies in complying with the new regulation, a US$100 million special loan facility has been set up by the EXIM Bank. A costs-sharing grant scheme has also been set up to assist companies in preparing for the inspections. Jamaica Broilers Group CEO Christopher Levy described the new regulation as ‘a game changer in terms of the rules’.
Food safety requirements are a growing challenge for ACP exports to a range of developed country trading partners. Harmonisation of national standards across developed economies and between public and private sector standards, as well as mutual recognition of the compliance verification processes, could greatly assist ACP exporters in reducing costs of compliance and compliance verification. This in turn would facilitate ACP access to diverse international markets and enable ACP exporters to more effectively respond to evolving market conditions in major trading partners.
The ‘aid for trade’ support facility established alongside the implementation of the US regulation is indicative of the kind of comprehensive country-based support programmes needed in the ACP to enable food and agricultural sector operators to stay ahead of the curve in terms of evolving SPS, food safety and agricultural product quality standards. While the EU is supporting several SPS-related programmes at the all-ACP level (e.g. PIP2, EDES, BTSF etc.), there seems to be a need to establish country-specific loan-financing adjustment facilities as part of the EU ‘aid for trade’ response to the trade effects of evolving regulatory standards.