Standards and Food Exports in a South - North Trade: Evidence from the ‘Hurdles to Pass’ for High-Value Products

The continuous reduction in tariffs due to trade negotiations and agreements among trading partners have brought into fore the importance of the use of non-tariff measures (NTMs) in regulating the flow of trade. The incidences of NTMs have been increasing in the past decades. Technical barriers to trade (TBT) such as technical regulations and standards stand out among other NTMs because of its importance, in terms of product quality assessment and human, animal and environmental safety requirements. Also, its ability to be used for trade protectionism and enhancement of trade flows through quality products that meet the changing taste and preferences of consumers. To many developing and least developed countries, technical regulations, especially standards are trade restrictive such that it added to the series of costs faced by their exporters, particularly in the developed markets, which in fact can almost double the trade barriers effects imposed by tariffs for some products. This has implication for developing countries’ export earnings, income and in turns their quest for sustainable development through reduction in poverty, unemployment and smallholder producers’ inclusiveness in the trajectory of development. In reality, there are many standard requirements before a product could access any market. Most of the studies in this area often used single standard requirement, however, this study departs from these previous studies by considering all the applicable standards for the selected products, which is called the ‘hurdles to pass’ (HTP) prior to accessing the EU market. To this end, this study investigates the impact of EU standard requirements on Africa’s food exports. A two – stage Heckman gravity model specification was adopted using mostly unexploited standards data from the Perinom database. Two high value commodities were selected, fish and vegetable, at HS-4 digit level. The findings show that at the extensive margins of export, standards are trade enhancing in fish, while inhibiting the volume of export vegetable. Similar results were obtained at the intensive margins of exports where standard requirements did not constitute restriction to fish export; however, they hindered the flow of vegetable. Thus, this study finds that product standards in fish are trade inhibiting at the extensive margin but trade enhancing at the intensive margins of exports, however, standards at the extensive margins of vegetable export are trade enhancing, while trade inhibiting at the intensive margins. Therefore, I conclude that the impact of standards on trade is productspecific. Hence, Africa must ensure adequate standards compliance not only in the EU market, but in all its markets in order to reduce the cost of border rejections at both the extensive and intensive margins. Thus, as matter of importance, African countries’ agricultural policy agenda must include partnership with international institutions in order to support and assist in improving technology for standards compliance.