Global Trade and Food Safety: Winners and Losers in a Fragmented System

34 Pages Posted: 20 Apr 2016

See all articles by Tsunehiro Otsuki

Tsunehiro Otsuki

World Bank

John S. Wilson

World Bank - Development Research Group (DECRG)

Date Written: October 2001

Abstract

How food safety is addressed in the world trade system is critical for developing countries that continue to rely on agricultural exports. An analysis shows that adopting a worldwide standard for a toxin affecting nuts and grains could increase trade in these commodities by $38 billion compared with levels under today's widely divergent national standards. Food safety standards and the tradeoff between these standards and agricultural export growth are at the forefront of the trade policy debate. How food safety is addressed in the world trade system is critical for developing countries that continue to rely on agricultural exports. In a fragmented system of conflicting national food safety standards and no globally accepted standards, export prospects for the least developed countries can be severely limited.

Wilson and Otsuki examine the impact that adopting international food safety standards and harmonizing standards would have on global food trade patterns. They estimate the effect of aflatoxin standards in 15 importing countries (including 4 developing countries) on exports from 31 countries (21 of them developing). Aflatoxin is a natural substance that can contaminate certain nuts and grains when storage and drying facilities are inadequate.

The analysis shows that adopting a worldwide standard for aflatoxin B1 (potentially the most toxic of aflatoxins) based on current international guidelines would increase nut and cereal trade among the countries studied by $6.1 billion compared with 1998 levels. This harmonization of standards would increase world exports by $38.8 billion.

This paper - a product of Trade, Development Research Group - is part of a larger effort in the group to expand empirical and policy understanding of the link between trade, development, and standards. The authors may be contacted at jswilson@worldbank.org or totsuki@worldbank.org.

Suggested Citation

Otsuki, Tsunehiro and Wilson, John S., Global Trade and Food Safety: Winners and Losers in a Fragmented System (October 2001). World Bank Policy Research Working Paper No. 2689. Available at SSRN: https://ssrn.com/abstract=632757

Tsunehiro Otsuki

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

John S. Wilson (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

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