Jacqueline dA Hughes Ranajit Bandyopadhyay Kehinde Makinde and Sarah Olembo

Abstract

The Economic Community of West African States (ECOWAS) has accepted trade liberalization and globalization as important policy directions. West African trade with Europe and the United States is already much greater than trade with other developed countries or intraregional trade, although trading with developed countries may entail considerable difficulties due to trade regulations and the need to conform to Sanitary and Phytosanitary (SPS) standards. There is generally a low level of awareness of quality standards among produce exporters in West Africa. SPS focal points are not established in all countries, which makes it difficult for exporters to check on standards and requirements. Frequent changes to standards, excessive procedural requirements, high costs for testing and certification, and a lack of transparency in the application of standards combine to compromise the ability of many countries to comply effectively with SPS. Many West African countries have not upgraded their national SPS systems in response to the introduction of the SPS Agreement, leading to differences between local and international standards that makes meeting standards difficult for firms that do business in multiple markets. There also is insufficient testing capability to meet the needs for international trade and a lack of regional coordination. Standards application is not enforced in a number of countries, but others have set up institutions for testing, certification, and quality control of both domestic products and imported goods. The effectiveness of these agencies often is weak due to inadequate equipment, a dearth of skilled technical personnel, inability to assess risks, inadequate laboratory accreditation, and a lack of enforcement.

Introduction

The introduction of trade liberalization through the World Trade Organization (WTO) and the dismantling of traditional trade barriers were expected to provide considerable export growth opportunities for developing countries to satisfy emerging markets in developed countries. However, in less than a decade of operation, it is clear that developing countries are having problems realizing this potential. Technical, non-tariff regulations in developed countries are constraining the growth of agricultural food and produce exports of many de© CAB International 2008. Mycotoxins: Detection Methods, Management, Public Health - 335 -and Agricultural Trade (eds. J. F. Leslie et al.).

veloping countries, including those in Africa (Townsend, 1999; Henson and Loader, 2001; Otsuki et al., 2001; Kandiero and Randa, 2004; Jha, 2005).

West African countries face enormous and rather daunting challenges to implement and comply with international standards. The negative impact of standards and technical regulations on the trade positions of West African countries cannot be overemphasized. These countries seek to increase production for export, but there are substantial difficulties because of the influence of trade regulations on trade patterns and the ability of producers to enter new markets. Evidence suggests that the losses associated with divergent national regulations, both in exporting and importing countries, may keep producers in developing countries from entering new markets. An improved understanding of the positive effects of Sanitary and Phytosanitary (SPS) measures could alleviate the situation in which developing countries claim that their access to markets in developed countries is constrained by arbitrary, unreasonable technical requirements. A better understanding of both the positive and the negative effects of the technical issues might increase the willingness of developing countries to participate fully in new rounds of trade negotiations.

All West African countries except Liberia are members of WTO. The obligations under the agreement apply equally to all member countries. Thus, compliance with national and international standards is binding and becoming a prominent issue in successful export promotions. The economies of most West African states are predominantly agricultural and these countries rely on the export of primary products for more than half of their export earnings. To increase their access to global markets these economies must increase product competitiveness, strengthen their ability to promote trade, and meet global demands and standards. The current emphasis on expanding intra-regional trade, and regional integration and market opportunities, shows that the Economic Community of West African States (ECOWAS) member states are aware of this requirement. Increased emphasis on standards and quality would enhance these efforts to boost participation of ECOWAS countries in regional and global trade.

Data and their analysis

To provide evidence of the importance and scope of SPS issues in West Africa, data were collected from primary and secondary sources. Primary data were collected from export, trade, standards, and quarantine agencies in ECOWAS countries by using questionnaires either during personal visits to these agencies or distributed by mail to key contacts in the ECOWAS region. Secondary data were collated from websites of national, regional and international data sources. Some of the available data must be interpreted with caution as most West African countries have inadequate reporting practices. Trade barriers and restrictive exchange controls in Africa provide incentives to falsify the customs vouchers that are used to compile trade statistics, and goods in some countries flow through unofficial channels that may not be included in the available statistics. Twenty to 35% of the total trade amongst the ECOWAS countries may be unrecorded (Hardy, 1992). For example, the unrecorded trade between Togo and Ghana is believed to be several times the amount of the official trade.

Two questionnaires were designed to complement the data from secondary sources. A country level questionnaire was designed to elicit information on the pervasiveness of SPS regulations and the effects of these standards on exporting countries. The second questionnaire was intended as an industrial survey of exporters and was given to selected firms in chosen sectors. These firms were requested to provide information on cost structure, produc tion and exports, and impediments to domestic sales, exports and operations resulting from difficulties in complying with SPS regulations. Public agencies and standard setting bodies also were surveyed to elicit information on important standards and perceived trade barriers.

Survey methods have been used in the past, particularly when other sources of information were lacking, to assess the barriers to trade faced by developing countries willing to export to the United States and the European Union. Questionnaires were sent to contact points by e-mail, and in-depth interviews were conducted in three countries: Nigeria, Mali and Ghana. This approach (Henson et al, 2002) was adopted to identify the most relevant issues affecting the ECOWAS countries. A weakness of this approach is that exporting companies and governmental agencies may provide biased data if they perceive that the survey is to be used for policy purposes, or that the results could be used for politically motivated purposes or could contribute to dispute settlements.

Trade data were compiled from the websites of major trade institutions and organizations worldwide, including the United States Food and Drug Administration (USFDA), the United Nations Commodity Trade Statistics Database (UN Comtrade), the Food and Agriculture Organization of the United Nations (FAO), the Organization for the Advancement of Structured Information Standards (OASIS), and ECOWAS. Some data on rejections at destinations were obtained from reviewed documents and information from the questionnaires, as well as the international trade websites. To facilitate empirical analysis of the survey results, supplemental and anecdotal information also was collected.

This study was initiated to address the constraints faced by all fifteen ECOWAS member countries in West Africa. Three countries, Nigeria, Ghana and Mali, were selected as representative countries for further studies. The largest trade partner for West Africa is the European Union (EU). The largest EU partners within ECOWAS were Côte d'Ivoire and Nigeria. These two countries accounted for 49% of all ECOWAS imports from the EU and almost 68% of the exports from ECOWAS were to the EU. Senegal and Ghana occupy the third and fourth positions, respectively.

The European Union is gradually introducing reciprocal trade between European Union member countries and sub-regions within the African-Caribbean-Pacific (ACP) group of developing nations since the Lomé Convention provisions expired in February 2000. Agricultural commodities were recommended because they come from sectors that produce goods similar to those found in European Union countries and that are important to the ECOWAS countries due to their role in industrial development and poverty reduction. The agricultural sector and local industries are the ECOWAS sectors with the most problems due to reciprocity in access between the European Union and ECOWAS.

Applicable SPS measures, conformity assessment procedures and enforcement procedures in the major export markets were identified and evaluated for their impact on production costs, export revenues and profit margins in ECOWAS member states. Where possible, macro compliance costs were identified, and cost estimates made for conformity assessment, product quality monitoring and control services by public and quasi-public agencies for each product or product group.

Discussion

Economic and trade profile of West Africa

This section broadly describes the overall economic performance of ECOWAS.

Table 1. Per capita GDP (US$) in 2003 and growth rate during 2001-2002 of West African countries and some other countries (based on the ranking of 231 countries). Compiled from: http/www.worldfactsandfigures.com/gdp_country_desc.php for per capita GDP and world ranking, and World Bank (2004) for growth rate.

Table 1. Per capita GDP (US$) in 2003 and growth rate during 2001-2002 of West African countries and some other countries (based on the ranking of 231 countries). Compiled from: http/www.worldfactsandfigures.com/gdp_country_desc.php for per capita GDP and world ranking, and World Bank (2004) for growth rate.

Country

Per capita GDP

World ranking

Growth rate

Benin

1,100

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