WORLD TRADE
ORGANIZATIONG/SPS/GEN/195
12 July 2000
(00-2848)
Committee on Sanitary and Phytosanitary Measures Original:  English
THE DEVELOPMENT CHALLENGE IN TRADE:  SANITARY
AND PHYTOSANITARY STANDARDS
Submission by the World Bank
I. INTRODUCTION
1. The globalization of food markets and decline in rates of agricultural tariffs has expanded
opportunities for economic growth in developing countries.  As traditional trade barriers in agriculture
have declined, however, technical and regulatory barriers have increasingly become subject to debate,
including those associated with sanitary and phytosanitary standards.  This paper discusses theseissues from a development perspective.  The first section briefly outlines trends in agricultural trade
and developing country exports.  The next section discusses several of the challenges faced by
developing countries in implementation of the World Trade Organization (WTO) Agreement on
Sanitary and Phytosanitary Standards.  The concluding sections describe recent experience in trade-
related development assistance of the World Bank in areas of sanitary and phytosanitary standards, aswell as an outline of Bank spending on SPS and related standards projects in FY99.  New research
work underway on standards and trade at the World Bank is also described in this section.
II. TRENDS IN WORLD FOOD EXPORTS
2. Recent trends in the export profile of developing countries is characterized by a growing
share of manufactures exports, and declining share of minerals and foods in total exports.  While a
declining share of mineral exports has been prominent, food exports remain an essential part of trade
in developing countries because these countries have comparative advantages in food exportstemming from low-cost labour and abundant land for cultivation.
3. Food exports from developing countries have exhibited steady growth since the early 1980’s
as shown in Figure 1.  Medium income countries
1 that include the majority of Latin America, Central
and Eastern European States (CEESs), and Asia exhibited strong growth in agricultural trade in the
1990’s.  Low-income countries, including the majority  of Africa and part of CEESs, Latin America
and Asia, have gradually increased their exports since the early 1980’s.  Growth of food exports was
as high as 120 per cent in low-income countries between 1980 and 1995, and was greater than 50 per
cent in middle income countries.  These data illustrate the increasing participation of low-income
countries in global trade.
                                                     
1 Definition of middle-and low-income countries follows that of the World Bank in 1999.G/SPS/GEN/195
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Figure 1.  Food exports from developing countries (1995 US$ million)
020406080100120140160
19801982198419861988199019921994
Middle income Low income countries
Source: World Bank calculations, based on GTAP
4. Figure 2 shows shares of food exports in total exports from 1980 to 1995.  The share of food
exports in high-income countries has declined consistently from 1981 to 1990, but became stationary
from 1990 to 1995.  Middle income countries had a peak in share in 1986, but became more stationary
in the 1990’s.  Low-income countries follow a tr end similar to that of high income ones. These
countries experienced a notable decline toward 1991, however, after a higher peak than that of middle
income countries in 1986.  The general trend of declining share of food exports reflects thediversification of developing countries away from food exports. (Hertel and Martin, 1999).
Figure 2. Share of food exports in total exports
00.050.10.150.20.25
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
Year
High income Middle income Low income countries
Source: World Bank calculations, based on GTAP
5. Growth is not neutral to subcategories of food exports.  Figure 3 shows the time trend of the
shares of five groups of food products exported from developing (middle and low income) countries.
It indicates that cereals were the most important export until the mid-1980’s, but that their importance
declined substantially in the 1990’s.  In contrast, processed foods have increased as a share of total
food exports, and have become increasingly important in the 1990’s.  The diagram suggests that this
trend is likely to continue.  The share of food products in other categories has remained relativelyconstant from 1980 to 1995.G/SPS/GEN/195
Page 3
6. The growth of processed food exports is being driven, in part, by the increased use of
processing technologies in developing countries.  Developing countries have leveraged their
comparative advantage in low-cost labor in the processing stage, and as a result, have become
increasingly competitive in international markets.
Figure 3. Food exports from developing countries by category in 1995
00.050.10.150.20.250.30.350.40.45
1980198119821983198419851986198719881989199019911992199319941995
Year
Cerials Vegetables and Fruits Oil and oil seeds
Animal products Processed foods
Source: World Bank calculations, based on GTAP
7. Major regional destinations for exports are determined by several factors: geographical and
political proximity, difference in comparative advantage, and degree of trade barriers, among others.
In developed countries, intra-regional trade accounts for the largest share of the flow of tradable
goods.  This does not necessarily hold for developing countries.  In particular, agricultural productionis driven by physical and climatic factors that vary geographically.  Furthermore, food production in
developing countries is subject to physical and climatic factors where biochemical technologies to
cope with adverse production environments are not well advanced.  This may result in specialization
in fewer categories of exportable food products. Moreover, this type of constraint may affect similar
product categories of food exports in countries with similar geographic conditions.
8. Table 1 presents trade flows by value in 1995 by regions of the world.  The numbers in
parentheses indicate the share of exports that went to each region, as a per cent of total exports in that
region.  The regions in the first column are origins of export of food products, and the regions in the
first row are destinations for these products.  The data indicate that West Europe and the rest of high-
income countries are the major export destinations for developing countries.  Furthermore, West
Europe is the major destination of exports from th e Middle East and Africa, with a share of 57 per
cent compared to only 16 per cent of intra-regional trade in this region.  High-income Asian countries,Australia, New Zealand and North America are major destinations of middle and low-income
countries in Asia.  These high-income countries and West Europe are almost equally important
markets for Latin America.G/SPS/GEN/195
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Table 1. Food exports by destination regions in 1995 (1995 US$ million)
West
EuropeRest of
high-
income
countriesMiddle-
East and
AfricaAsia Latin
AmericaRest of
the worldTotal
West Europe 152,348 16,609 13,545    4,944      3,832
13,781  205,059
(0.74)1(0.08) (0.07) (0.02) (0.02) (0.07) (1.00)
Rest of high income 13,432 48,867 8,647  19,318      9,602
3,077  102,943
countries (0.13) (0.47) (0.08) (0.19) (0.09) (0.03) (1.00)
Middle-east and 14,855 3,123 4,031    1,985         298
1,576    25,868
Africa (0.57) (0.12) (0.16) (0.08) (0.01) (0.06) (1.00)
Asia29,030 26,218 5,312  15,039         982
3,341    59,922
(0.15) (0.44) (0.09) (0.25) (0.02) (0.06) (1.00)
Latin America 17,969 17,421 3,955    3,830      9,073
1,844    54,092
(0.33) (0.32) (0.07) (0.07) (0.17) (0.03) (1.00)
Rest of the world 7,919 2,935 1,263    2,232         256
4,817    19,422
(0.41) (0.15) (0.07) (0.11) (0.01) (0.25) (1.00)
Source: World Bank calculations, based on GTAP.
1Inside parentheses are shares in total value of exports from a given region.
2Excluding Hong Kong, Japan, South Korea and Taiwan, which are included in the rest of high income countries.
III. RIGHTS AND OBLIGATIONS IN THE SPS AGREEMENT: SELECTED ISSUES
FOR CONSIDERATION IN A DEVELOPMENT CONTEXT
A. THE SPS A GREEMENT
9. A principal objective of the SPS Agreement is "adoption and enforcement of sanitary and
phytosanitary measures in order to minimize thei r negative effects on trade".  This Agreement, in
particular, elaborates rules for the application of the provisions of Article XX of GATT 1994 which
relate to the use of sanitary or phytosanitary measures, as well as rules for applying SPS measureseven in cases where Article XX of the GATT is not invoked.  It recognizes the rights of importing
countries to implement these measures, but it states importing countries’ obligation to provide
scientific justification for basing rules.  It also states Member's obligation to establish enquiry points
and provides opportunities for response to those that notify the intent to promulgate new SPS
measures.
10. Rules are based on sanitary and phytosanitary protections to human, animal, and plant life. In
order to avoid the use of SPS measures for protection of domestic industries, the Agreement
emphasizes that all such measures should be based on scientific justification or on risk assessment.
All signatories are encouraged to adopt internationally recognized standards but are free to apply
stricter standards.  International standards are developed by several organizations, including theCodex Alimentarius Commission, the International Offi ce of Epizootics (IOE), and international and
regional organizations operating within the framework of the International Plant Protection
Convention (IPPC).G/SPS/GEN/195
Page 5
11. The SPS Agreement also states that each Member should ensure that at least one enquiry
point exists which is responsible for the provision of answers to all reasonable questions from
interested Members as well as for the provision of relevant documents.  Notifications are to be
submitted to other Members through the SPS Committee.
B.  THE IMPORTANCE OF ENQUIRY POINTS AND NOTIFICATIONS
12. As table 2 shows, despite the obligation to establish enquiry points, as of 1999, only 76% of
middle and low income Members had established enquiry points under the SPS Agreement.  This
contrasts with 92% of high income Members.
Table 2: The total number of countries that have established enquiry points for SPS measures
Middle and low income countries High income countries
1995 78 49 (63%) 34 28 (82%)
1999 98 74 (76%) 36 33 (92%)
Source: World Bank calculations as based on WTO data.
13. The data on notifications under the SPS Agreemen t is also noteworthy.  The growing number
of notifications based on the SPS Agreement supports the increasing application of SPS measures in
trade.  The increase is due likely to both increased concern about food, animal and plant safety and the
expansion of world trade.  The total number of notifications based on the SPS Agreement submitted to
WTO during a given year doubled in the last five years from 220 in 1995 to 438 in 1999 as shown in
Figure 4.  Since SPS measures normally remain valid once enacted, the cumulative number of activeSPS measures has grown even faster.  Figure 4 also  indicates that the numbe r of notifications based
on the SPS Agreement generally increases both in high income and middle and low-income countries.
14. Since developed countries have greater resources overall to devote to food, animal and plant
safety standards, it is reasonable to find a greater number of notifications from developed country
Members.  Submissions from developing country Members, however, have also increased from 1995
to 1999.
2
                                                     
2 The number of notification from the middle and low-income countries in 1995 outweighs that in
1996, but Mexico submitted 100 notifications in 1995.  This is nearly half of the total number for middle and
low-income countries.G/SPS/GEN/195
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Figure 4.  Number of notifications based on the SPS Agreement by income groups
050100150200250300350400450500
1995 1996 1997 1998 1999
YearHigh income Middle and low income countries
Source: World Bank calculations, based on GTAP.
15. Figure 5 illustrates the decomposition of the number of notifications submitted to the WTO
by region.  Latin America exhibits a high share among developing countries.  This may be due, in
part, to the establishment of the Southern Cone Common Market (Mercosur) in 1994 and Mexico's
entry into the North American Free Trade Agreement (NAFTA).   North America shows a growingtrend both because developing countries have increased exports to these high-income regions and
because these regions have become increasingly aware of safety of imports from developing
countries.  The number for CEES has rapidly gr own toward 1999, reflecting growing intra-regional
trade and trade with West Europe.  Asia’s share is modest and notifications from Japan and Korea
constituted nearly half of the Asian total in 1999.  Africa and the Middle East have been far behind
the other regions.G/SPS/GEN/195
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Figure 5. The number of notifications based on the SPS Agreement by regions
050100150200250300350400450500
1995 1996 1997 1998 1999
YearNorth America
Latin AmericaCEESsAsiaAfrica&Middle-East
West Europe
Oceania
Source: World Bank calculations, based on GTAP .
Note:  Oceania includes Australia, New Zealand and Fiji.
C. HARMONIZATION AND EQUIVALENCE
16. The need for a more specific understanding of the implementation of certain provisions of the
SPS Agreement involving developing countries has increased (G/SPS/W/93).  This is particularly so
with respect to the concepts of risk analysis, appropriate level of protection, equivalence and disease-
free areas.  While Members are required to submit concrete examples of the process of harmonization
according to the Committee’s provisions adopted in 1997, only three developing country Members
have submitted examples of trade problems by May 1999 which are thought to be related to the use,non-use or absence of international standards.  The WTO SPS review (G/SPS/12), points out the
importance of governments of developing country Members establishing a systematic approach to
examine their internal needs and ability to comply with proposed standards and of their active
participation in the standard-setting process.  The review also describes reasons of inability of
developing country Members to progress in the harmonization process.  Their argument rests on theinsufficient time frame for developing country Members to comment on notifications.
D. S
OUND SCIENCE AND RISK ASSESSMENT
17. The SPS Committee encourages the initiative of international organizations to work on
guidelines on risk analysis, including on relevant terminology, facilitating Members' compliance with
obligations under the Agreement.  Such organizations include Codex, OIE, IPPC, Food andAgricultural Organization (FAO), and World Heal th Organization (WHO) (G/SPS/12).  While a
relatively good progress in mutual recognition on risk assessment has been found among developed
country Members, establishment of risk assessment bodies in developing countries tends to lag
behind.  Along with the development of these international guidelines, the initiative of developed
country Members in disseminating the guidelines is essential.  G/SPS/R/14 outlines developmentefforts related to risk assessment.  An SPS seminar was held in Chiang Mai, Thailand, on 3-6
February 1999, under the Asian/European Trade Facilitation Action Plan, with a focus on technicalG/SPS/GEN/195
Page 8
risk assessment, and technical assistance.  Australia was reported to have been actively involved in
capacity building support for Oceanian, Asian and African developing country Members.  Such effort
includes in-house training for quarantine officials, and assistance in the development of diagnostic
facilities, and pest and disease surveillance.
E. DISPUTE SETTLEMENT
18. The WTO Dispute Settlement Body entertained 25 disputes that referenced the SPS and TBT
Agreements. Of those 25 cases, 9 are currently at the consultation stage of the dispute resolution
process, 2 are presently before panels, 7 have been settled, and 7 have been ruled upon by the panel
and appellate body. Eighteen disputes concerned agriculture, more than any other sector.  Four of
those, WT/DS12, WT/DS14, WT/DS61, and WT/DS72, referenced  the TBT Agreement, but not the
SPS Agreement.  This is due to the fact that the measures being challenged in each case did not
involve the application of a sanitary and phytosanitary measure.
F. KEY DEVELOPMENT CHALLENGES : THE CASE OF SUB-SAHARAN AFRICA
19. Sub-Saharan Africa (SSA) is one of the least developed regions in the world. GDP per capita
totaled $510 in 1999, which followed South Asia’s  $430, which was the lowest among 6 developing
regions in the world (World Bank, 1999).  Thirty-eight out of 50 SSA countries fell into the lowest
income group of the World Bank’s classification in 1999.  Their traditional major agricultural exportsinclude cocoa, coffee, cotton, sugar, groundnuts, tea, tobacco, rubber and bananas.  But the share of
these products in total agricultural exports declined from 75 per cent in 1980-1989 to 71 per cent in
1990-1997, reflecting the downward trend of world ra w food prices and the emerging food processing
sectors (Oyejide et al, 2000).  Processed foods that exhibited a notable growth include vegetable and
animal oils, flour, processed cereals and tobacco (O yejide et al).  SSA countries have successfully
expanded market shares of their processed food exports in Europe.  The growth of the food-
processing sector can be a logical transition to the industrialized stage, realizing their comparative
advantage in food production and relatively moderate requirement for technological capacity.
20. Oyejide et al, points out that West Europe’s SPS measures are more concentrated in the
processed food categories than in the raw food categories.  Given this context, the SPS Agreement islikely to hamper further growth of processed food exports in SSA.  SSA countries have been reluctant
to comply with SPS measures.  Only 15 SSA countries out of 32 WTO Member from SSA established
enquiry points by the end of 1999.  It is also natural to find their lax regulation on trade in terms of
SPS measures.  Only 41 SPS-related notifications were submitted to WTO by SSA countries between
1995 and 1999, which is less than three per cent of the global total (=1,489) in the same period.
21. According to Oyejide et al’s survey of SSA, the Centre for Food Economic Research's
(CeFER) multi-regional survey of SSA, North Africa, Middle-East and South Asia, and other SPS-related studies including the World Bank-funded research projects, the following development
challenges are to be highlighted:
(a) Improvement of production methods - grain growing and harvesting technique,
livestock feeding, slaughtering and milking technique;
(b) Improvement of transportation and storage methods - transportation time, and
artisanal technique and sanitation of storage facilities;
(c) Improvement of access to compliance resources - assistance by technical experts and
information resources and laboratory and quarantine stations;G/SPS/GEN/195
Page 9
(d) Improvements in access to international negotiation, establishment of enquiry points
and contact points in WTO to promote developing countries’ participation in
multilateral negotiations;
(e) Balancing scale economy and benefits from market liberalization - balanced
development of centralized quality control systems and competitive market systemsfor export;
(f) Compensation for lost market access due to SPS measures - quantification of trade
impact of SPS measures.
G. I
MPLEMENTATION ISSUES
22. The impact of SPS measures on developing countries is important for several reasons, when
viewed from a development perspective: (1) SPS measures can limit market access while their
economy mostly relies on agricultural exports, (2) developing countries have limited technology and
financial resources to comply with the standa rds, and (3) limited access to information, which
prevents effective engagement in international debate.
23. The SPS Agreement emphasizes the importance of broad range of development assistance
through aid from developed countries.  It notes that developing country Members may encounter
special difficulties in complying with the sanitary or phytosanitary measures of importing Members,
and as a consequence in access to markets, and also in the formulation and application of sanitary or
phytosanitary measures in their own territories.
24. It is important to understand the difficulties of developing countries in complying with
sanitary or phytosanitary measures.  Such assistance may be, inter alia, in the areas of processing
technologies, research and infrastructure, including in the establishment of national regulatory bodies,
and may take the form of advice, credits, donations and grants, including for the purpose of seeking
technical expertise, training and equipment to allow such countries to adjust to, and comply with,
sanitary or phytosanitary measures necessary to achieve the appropriate level of sanitary orphytosanitary protection in their export markets.  The following section outlines work of the World
Bank in support of upgrading systems related to sanitary and phytosanitary standards, with a
particular emphasis on trade-related projects in these areas in FY99.
IV. RECENT WORLD BANK ASSISTANCE IN SANITARY AND PHYTOSANITARY
STANDARDS
25. Over the past decade the World Bank has funded  a number of projects aimed at enhancing the
implementation of sanitary and phytosanitary regulations in developing countries. Focusing on thenarrow objective of meeting string ent SPS standards in the global market could be very costly if it
was not done within a general development framework that generates sufficient benefits to offset such
costs. Most projects implemented by the Bank have integrated SPS objectives within more general
goals of ensuring food security, increasing agricultural productivity and protecting animal and plant
health. As a result, benefits generated by these projects in the form of increased crops, increasedaccess to international markets and reduced losses in animal and plants out-weighed the costs of
compliance with SPS standards.
26. Within these projects, achieving SPS-related objectives often required, depending on the
specific goals of the project, upgrading veterinary services, building laboratories and quarantine
stations, as well as training facilities and quality control equipment. Projects have also includedcomponents such as certification of disease-free and pest-free zones and training staff and providing
equipment for SPS-related research.G/SPS/GEN/195
Page 10
A. SPS-R ELATED PROJECTS AND THEIR COMPONENTS
27. As outlined in Finger and Schuler, 1999, the World Bank has funded a number of projects
related to SPS measures over the past decade.  These have included goals of compliance with SPS
measures as outlined in the SPS Agreement.  SPS-related funding has been mainly channelled through
four specific types of development projects:
(a) Projects related to food processing and quarantine facilities
China, 1993-2000, animal and plant quarantine component of Agricultural Support Service
Project;
Turkey, 1992-1999, modernize laboratories and residue control- component of Agricultural
Research Project.;
Russia, 1992-1995, improve food processing facilities, disease control, component of
Rehabilitation Loan;
Poland, 1990-1995, food processing facilities modernization component of Agro-industries
Export Development Project.
(b) Animal related projects
Brazil, 2000-2004, Animal and Plant Health Protection Project which will be discussed later
in detail;
Hungary, 1985-1991, slaughterhouse modernizati on component of Integrated Livestock
Project;
Madagascar, 1980-1988, livestock vaccination component of Rural Development Project.
(c) Projects related to crop production
Brazil, 2000-2004, Animal and Plant Health Protection Project;
Vietnam, 1994-1997, pest management component of Agricultural Rehabilitation Project;
Algeria, 1988-1994, Locust Control Project.
(d) General agricultural projects
Argentina, 1991-1996, general agricultural Export Reform Project.
B. THE BANK’S TRADE -RELATED ASSISTANCE AND SPS IN FY99
28. The World Bank is currently reviewing trade-related assistance in fiscal year 1999.  Estimates
show that trade-related assistance by the World Bank; include trade facilitation related to adoption of
international standards; technical assistance and tr aining, has received between 23-30 per cent of the
Bank's total spending on both policy adjustment and project lending in FY99.  This totaledapproximately $28.994 billion. Of trade-related funding, policy lending accounted for about 25-30 per
cent of total policy spending which totaled $15.449 billion.  Similarly, the share of trade in project
lending represented approximately 23 per cent of the total amount of project loans in FY99,
approximately $13.5445 billion.
29. The World Bank has also funded projects that help support the ability of developing countries
to comply with SPS standards in such areas as regulatory reform, customs modernization, and other
projects.  Total funding for projects that are directly or indirectly related to SPS have amounted to
$412.15 million;  that represents approximately 5.1 per cent of total funding for trade-related projects
in FY99.G/SPS/GEN/195
Page 11
Figure 6.  Profile of Bank Lending in Fiscal Year 1999
Figure 7.  Profile of Bank Trade-Related Lending, Fiscal Year 1999
30. In addition, in FY99 the Bank has spent $610.7 million on modernization of customs
infrastructure and simplification of custom procedures. Though not directly linked to SPS measures,
modernization of customs may improve countries’ ability to verify whether their imports meet SPS
related standards, creating incentives for their tradin g partners to meet such standards. Additionally,
modernization of customs and quarantine stations, for the purpose of controlling the quality of
imported goods, will most likely have a spill over effect on local manufacturing and its ability to
comply with SPS standards.  The expertise and the knowledge base generated to handle imported
goods could also be used locally to improve quality of local products.  Therefore, modernization ofcustoms can be considered an indirect, but important channel through which the Bank has supported
developing countries’ efforts to comply with SPS standards.
31. Below is an outline of the Bank’s SPS-related spending for fiscal year 1999.Trade 
Other
SPS measures
Trade other than
SPS measuresG/SPS/GEN/195
Page 12
Table 3. Estimated Bank Lending Related to SPS - FY99 (Million US Dollars)
Structural
AdjustmentInvestment
LendingTotal
1-Improve sanitary
systems09 3 93Direct SPS-related Projects
2-Investment in
standards24 2.2 Total Direct and
Indirect
3-Assist in adoptingstandards24 0
319.15 Indirect SPS
projects412.15
4-Government 268.95 0 Total with
Customs
5-Customs 573.8 36.9 610.7 Custom 1022.85
Source: Database of World Bank trade-related assistance, FY99.
1 Upgrading sanitation systems, quarantine, etc. to support trade in agricultural products.
2 Investment in standards infrastructures, metrology, calibration, laboratory accreditation systems, testing, certification
programmes, and other mechanisms.
3 Assist firms to adopt/comply with international standard s, including implementation of quality standards programmes.
 4 Government regulatory reform projects, health, safety, environmental regimes across industry sectors.
5 Reduction of red tape in customs clearance; simplification of export/import procedures; modernization of customs
infrastructure.
C. OVERVIEW OF WORLD BANK SPS - P ROJECTS IN FISCAL YEAR 1999
32. Of the various SPS-related projects funded by the World Bank last year, Brazil’s Animal and
Plant Health project and Morocco’s Fisheries project, have enhancing SPS measures in theirrespective countries as a primary objective.
33. Below is a brief discussion of each project.
Brazil's Animal and Plant Health Protection
34. The Brazilian agriculture sector represents 11 per cent of the country’s GDP or nearly 40 per
cent when agro-industry is included. With the largest cattle herd world-wide, Brazil’s beef exports do
not exceed 5 per cent of total production.  One of the main challenges that have been affecting thesector’s competitiveness in global markets is sanitary and phytosanitary measures.  The Animal and
Plant Health project is aimed at strengthening Brazil's agriculture sector’s competitiveness through
improving sanitary and phytosanitary conditions.
Project components
35. The project, which will be implemented over four years starting this year, consists of three
components:
(a) Animal and plant health:  this component will include (1) promoting systematic FMD
vaccinations campaigns;  (2) establishing or improving sanitary and phytosanitary
transit control posts;  (3) financing agricultural health education campaigns;  and (4)
improving monitoring and surveillance systems.G/SPS/GEN/195
Page 13
(b) Technical assistance and training and consultancies; this component will cover
training courses and evaluations on export potentials for certain areas
(c) Administration, monitoring and evaluation of the project.
Component C
Administration
monitoring and
evaluations
Costs $4.4
million2-Subproject implemented by Ministr y
of Agriculture:  building capacity of
personnel, purchases of laboratoryequipment and materials, vehicles,
computer hardware and software.1-Subproject implemented by farmer
associations: support eradication o f
FMD, Hog Cholera and control o f
Newcastle disease. Eradication o f
plagues affecting fruit exports.
3-Subprojects implemented by stateagencies:  enhance interstate andintrastate transit control of animalsand plants; train technical personnel
and farmers in agricultural health.
1-Training courses
2-Studies related to sanitary
legislation
3-Feasibility studies to assess
export potential in specific
geographic zones
1-Promotion and dissemination
2-Supervision
3-Consultant services for the
project coordinationComponent A
Finance
subprojects in
animal and plant
health
Costs $79.2
million
Component B
Technicalassistance andtrainingconsultancies
Costs $4.4
millionG/SPS/GEN/195
Page 14
Expected Benefits of the Project
36. The project will be implemented in 14 states that currently account for the bulk of Brazil’s
agricultural exports and also are areas with the greatest potential for agricultural export expansion.
Over two thirds of Brazil’s cattle and swineherds are located in these states.
37. According to the project’s implementation pla n, cattle vaccination rate, for instance, will
increase from its current rate of 85 per cent to 95 per cent by the end of the project. Also, 174 new
fixed and mobile posts for animal and plant inspection should be operating at the end of the project.
Additionally, the project will include training more than 1100 professional staff in animal and plant
sanitary defense.
38. The Net Present Value (NPV) of costs incurred  under the project is $ 139.2 million, while the
NPV for benefits sums to $398.8 million.
The Morocco Pilot Fisheries Development project
39. Morocco’s fisheries sector plays a key role in the country’s economy. Morocco is Africa's
largest fish producer and the leading producer and exporters of sardines. Yet the sector faces
numerous challenges ranging from improving the resource’s management to increasing the sector’s
competitiveness through improving the fish product quality.
40. The Pilot Fisheries Development project, with a cost of 5 million dollars, is designed to
address these issues.  The project includes two components:
(a) Institutional development including supporting the government in strengthening its
ability to manage and develop the fishing sector.
(b) Pilot marketing chain development:  upgra ding the fishing fleet, improving landing
conditions, and improving marketing and processing conditions. Improving
processing conditions is particularly important in helping Morocco’s fisheries sector
in meeting SPS standards.
Expected Benefits of the Project
41. The main benefits of the project will be in three areas:  (1) enhanced quality control and port
infrastructure management;  (2) higher quality fish and improved productivity for the processing
industry in higher value added;  and (3) development of a more competitive fish processing sector
which is better oriented to export markets.
V. THE WORLD BANK’S TRADE-RELATED WORK ON STANDARDS,
REGULATIONS, AND TECHNICAL BARRIERS
42. The World Bank’s work on trade is a central part of the organization’s mission in
development and poverty reduction.3 Trade has been an important engine for economic development.
Efforts to better integrate developing countries into the world economy and trading system which
rests on the WTO framework in ways that accelerate growth is critical.  As part of the work toward
this goal, the World Bank supports trade policy reform and implementation of Uruguay Roundcommitments by developing countries.  The work programme on trade specifically focuses on
commitments within the context of  development, for example projects to support public sector reform
                                                     
3 For a recent overview of the Bank’s trade work see document WT/TF/COH/S/1.G/SPS/GEN/195
Page 15
or infrastructure and facility modernization that increases health, safety, or environmental goals.  In
addition, along with the Bank’s partners in the In tegrated Framework for Least Developed Countries’
Trade Development, efforts are underway to more closely tie capacity building and development
objectives with advantages of deeper integration into the world trading system.  The World Bank’s
trade-related initiatives are also supported by a programme of research.  The focus of the Bank’s traderesearch, given changes in the nature of barriers to trade and success of the multilateral system in
addressing traditional measures, now includes issues in new trade areas, such as those related to
standards and regulation.
43. A more detailed understanding of the economic, institutional, and policy aspects of standards,
technical regulations, and trade is central to the Bank’s new work agenda.  These issues are of
particular importance to developing countries, as they seek to strengthen industrial performance,
increase agricultural production, and expand opportunities in world trade markets.  In order to expandunderstanding of these issues, the World Bank launched new work on international standards,
technical regulations, and trade policy in November 1999.  The overall goal of an initial three-year
series of initiatives centers on (1) increased understanding of the quantitative significance of standards
and regulations as barriers to trade, and (2) analysis of trade policy aspects of government technical
regulations, with particular emphasis on these issues for developing countries.
4
44. The tentative programme outline includes the following deliverables in policy research and
empirical data analysis over the period November 1999 - November 2002:
45. Development, implementation, and dissemination of results of a study to quantify the degree
to which mandatory government technical regulations impact international trade flows.  This part of
the project constitutes a major element of the overall work programme. The first part of the task
involves survey work to create a new database at the World Bank on voluntary standards and
technical regulations (product testing, certification, and laboratory accreditation requirements).  The
database will be used to produce a report which outlines estimates of the trade distorting effect of
selected standards for certain products circulating in world markets.  This will include case studies of
agricultural products and manufactured goods.
46. The empirical work by the Bank on standards will provide a unique contribution to
determining the aggregate economic impact of differ ences in technical requirements across national
boundaries and costs associated with divergent government requirements.  Most importantly, the
empirical data gathered will provide an important new foundation for policy decision-making on trade
issues related to regulation and standards.  The research work began with sponsorship of a workshop
on "Quantifying Non-Tariff, Technical Barriers to Trade: Is This Possible?" (27 April 2000).  The
session provided background for the research framework and methodology for empirical analysis ofthe impact of standards on trade.  Topics explored included:  (1) what is known about the trade-
distorting effect of standards and technical regulations, (2) current state of measurement tools and
models to determine the economic cost of trade-distorting regulation, (3) best practice in survey
design to collect data on standards and regulation, and (4) data and analytical needs of policymakers
in non-tariff barriers.
47. The Bank is currently developing a survey to collect data on costs of complying with
government technical regulations, including costs of testing, certification, and laboratory accreditation
to specific regulatory requirements in selected products and markets.  Research results will be
analyzed and a final report will be prepared summarizin g results of the data analysis.  It is anticipated
                                                     
4 The standards work at the Bank is being supported in part through a Trust Fund to support World
Bank managed projects on Trade Policy Development established by the United Kingdom’s Department of
International Development (DFID).G/SPS/GEN/195
Page 16
that research results and other material will be disseminated through trade courses and other activities
sponsored by the World Bank Institute.
48. Policy research and analysis (working paper series) on voluntary standards, government
regulation, and their relationship to trade and export competitiveness.  This part of the project seeks to
provide new research results and policy recommendations relevant to developing countries on
regulation and standards.  This includes issues under discussion at the World Trade Organization and
other trade fora, including work of the Asia Pacific Economic Cooperation (APEC), among other
regional dialogues.  A focus of the work on trade policy options centers on the standards and technical
barriers agenda of the WTO, including the Second Triennial Review of the TBT Agreement.
Disciplines in the SPS Agreement, with partic ular emphasis on WTO disciplines and developing
country interests, will also be analyzed.
49. The Bank's work also seeks to provide targeted analysis of the impact of voluntary standards
on export competitiveness and development, such as the impact of ISO 9000 on trade performance of
developing countries.  Finally, through dissem ination of working papers and best practice
information, the project seeks to support capacity-building efforts on trade policy issues relevant to
standards and technical barriers among developing countries researchers and policymakers.
50. Research papers and reports on the following topics are under consideration for development
by the Bank:
(a) What are the most appropriate trade tools to reduce global technical barriers,
including relative costs and benefits of differing models such as Mutual Recognition
Agreements (MRAs)?  How can developing countries benefit from continued efforts
to liberalize trade through reductions in technical barriers?
(b) What are the key priorities for developing countries at the WTO in standards and
technical barriers to trade, including implementation and capacity building needs?
How can the TBT Agreement be strengthened through the Second Triennial Review
of the TBT Agreement?  How successful has the SPS Agreement been and what are
the most important challenges in reducing trade distorting effects of technical barriersin agriculture?
(c) How
 successful have voluntary standards, such as ISO 9000 (quality) been in
increasing quality and export competitiveness in small and medium-sizedfirms in developing countries?
(d) What are the most critical needs in de veloping countries in modernization of
regulatory and standards systems to  support expanded trade opportunities and
how best can those needs be met?
(e) How  successful have regional trade agreements in the Asia Pacific and
elsewhere been in facilitating trade through reductions in technical barriers totrade, in particular for deve loping country participants?
51. A major element for dissemination of research results and information on the trade aspects of
standards and regulation will be use of the World Bank website.5  A new standards home has been
developed to centralize information on the project, disseminate results of policy working papers, new
                                                     
5 This website is operational at: http://www.worldbank.org/wbiep/trade/Standards.htmlG/SPS/GEN/195
Page 17
research by experts outside the Bank, and other information.  A seminar series on "Standards,
Regulation, and Trade" has also been established at the Bank as a way to further broaden
understanding of the linkages between standards, trade policy, and development.
52. A series of workshops and a conference in 2002 to enhance dissemination of the research and
policy recommendations from this part of the work  programme is also under consideration.  With
additional resources, the Bank would also develop educational tools (lecture notes, teaching aids and
handbook) and sponsorship of training seminars on international standards and best practice in
standards and regulatory reform, including assistance to developing countries.  The goal of this part of
work would be to provide direct assistance from the Bank to developing countries on international
standards development systems, information on programmes  available for modernization of standards
infrastructure, and other topics related to understanding the role of standards in development.  The
papers, training material, and other output from this work would be made available through researchpapers, and content also disseminated through the World Bank Institute, and other organizations such
as the WTO, International Organization for Standardization (ISO), and educational institutions in
developing countries.  Additional funding is being sought to implement this part of the work
programme.
53. It is anticipated that throughout the initial three year project, staff will also be available to
support Bank operations in areas of international standards, education on best practice in standards
and regulatory reform, including assistance on trade policy related to regulation and standards.  The
work on standards will include close collaboration with the World Bank Institute.
VI. A NEW WORLD BANK PROJECT ON SUB-SAHARAN AFRICA
54. The United States has approved funding for the Bank to support research and capacity
building on trade, regulation, and standards in Sub-Saharan Africa. The project centers on the
following objectives:
(a) Development of five country-specific action plans to expand access to and use of
international standards in Sub-Saharan Africa. This will be accomplished through
assessments of the specific impacts of standards and technical regulations on trade inthe region,
(b) Identification of specific infrastructure and capacity needs in Sub-Saharan Africa,
including public and private sector capabilities in standards to support expansion of
export opportunities and successful participation in the World Trade Organization
(WTO),
(c) Design of a pilot network in the region, based on the five action plans, to expand
access to international standards and the region’s ability to implement WTO
obligations in the TBT and SPS Agreements.
55. The World Bank work relates to critical trade policy challenges and development needs in
standards which heretofore have been largely unexplored and not addressed in the context of Sub-
Saharan Africa. The central objectives of the Bank’s project relates directly to obligations of
membership in the World Trade Organization which encourage participation in the development of
international standards and their use, as appropriate, as a basis for domestic technical regulations.
Developing countries, including those in Sub-Saharan Africa, have expressed increasing concerns thatsuch standards may not reflect their development and trade needs, in the absence of their "effective
participation".G/SPS/GEN/195
Page 18
56. Moreover, the TBT and SPS Agreements foresee the prevention and removal of trade barriers
through harmonization on the basis of internationa l standards. Although a number of developing
countries have expressed concern that  implementation of WTO obligations is contingent on their
ability to effectively participate in the process, there has not been a systematic analysis conducted of
the nature of the barriers to effective participation by developing countries, nor of how best to ensure
fulfilment of these WTO obligations, in regard to their special interests and needs.6
57. There are a number of concrete examples of problems confronted by countries in Sub-Saharan
Africa in standards and technical barriers, as they relate to WTO obligations on use and application of
international standards.  These are based on the fact that investments needed to implement WTO
obligations exceed government capital expenditure budgets and annual development resources in most
developing countries.
58. As part of the work by the Bank in the Integrated Framework programme, for example,
Uganda and Tanzania have noted the important need for assistance on technical regulations and
standards in regard to WTO obligations in the TBT and SPS Agreements.7  During preparations for
the WTO Ministerial in Seattle in November, several members from Sub-Saharan Africa outlined the
critical and unmet needs in international standards.
59. Five countries in Sub-Saharan Africa will be identified for case studies and action plans. The
five countries will represent a range of development challenges and geographic diversity in the region.
The World Bank has extensive networks of contacts and resident missions in the region which will be
directly involved in work conducted in the case studies.
60. Empirical research and data gathering on standards (goods and agricultural products) and
regulatory systems in Africa will be conducted in the five countries.  Special emphasis will be placedby the Bank team and African partners on an assessment of current and anticipated use of
international standards, based on analysis of  key relationships between standards, export
competitiveness, and trade in Sub-Saharan Africa. Detailed information and analysis would be
gathered through survey instruments of the challeng es to and participation in standards development
activities by Sub-Saharan Africa.  Survey work would be undertaken with local research partners inthe region.
61. Existing mechanisms for information exchange within the region will be also be evaluated,
along with participation in international standards development, the use of standards domestically as a
basis for mandatory technical regulations and identification of infrastructure needs. Public sector
agencies with responsibilities over regulatory affairs and standards, as well as private sector standards
organizations in the region will also be included in these surveys. In addition, detailed study of the
capacity of public institutions and private sector organizations to access, absorb, and maintaininformation on relevant international standards will also be performed.
62. The analysis will focus specifically on areas of projected high export potential for the region.
It is anticipated that standards could affect costs and production activities in all sectors, though in the
context of Sub-Saharan Africa, emphasis would likely  be placed initially on examining sectors such as
agriculture, processed foods, labour-intensive ma nufacturers (apparel, chemicals, pharmaceuticals,
                                                     
6 A number of Sub-Saharan African members of the WTO detailed problems in the area of standards
related to implementation of WTO commitments, including Zambia, Zimbabwe, Tanzania, Kenya, Nigeria, andUganda.  Additional details are outlined in “The Post-Seattle Agenda of the WTO in Standards and TechnicalBarriers to Trade,” John S. Wilson, World Bank (mimeo) 2000.
7 Detailed information regarding needs assessments in the Integrated Framework is available at
www.ldcs.org/index.htmG/SPS/GEN/195
Page 19
etc.)  Finally, assessment of Sub-Saharan Africa's experience in success and failure to implement
multilateral trade obligations in the WTO Agreements specified above would be undertaken.
63. Based on the assessments outlined above, detailed action plans for strengthening access and
use of international standards which support WTO obligations in each of the five countries identified
will be completed.  These action plans will include specific information, data, and recommendationson:
(a) key international standards critical to export competitiveness in the countries;
(b) necessary infrastructure modernization and domestic capacities to absorb information
on standards to meet WTO obligations;  and
(c) long-term benchmarks for assessing future progress in meeting development and
trade objectives related to international standards. There will be wide dissemination
of the results of the action plans in the region, including via the World Bank Institute,
workshops, and other direct channels.
64. In addition to the five action plans, the project will produce a report which outlines a pilot
design for a new “Standards Access Africa” network to deliver information, data, and expertise on
international standards tied to WTO obligations. It is anticipated that this network would utilize the
World Bank's distance learning network and infr astructure.  (The network when implemented in
subsequent years would provide a centralized source for information and training on voluntary
international standards and related government technical regulations relevant to Sub-Saharan Africanexports.)  It is anticipated that when implemented, the World Bank would maintain the database and
incorporate it into activities of the Bank, including the Bank’s Global Distance Learning Network
(GDLN).
VII. REFERENCES
Finger, Michael, and Philip Schuler. Implementation of Uruguay Round Commitments: The
Development Challenge . World Bank, Washington, D.C.: 1999.
Henson, Spencer, Rupert Loader, Alan Swinbank, Maury Bredahl, and Nicole Lux. Impact of Sanitary
and Phytosanitary Measures on Developing Countries . Center for Food Economics Research,
Reading, United Kingdom: 2000.
Hertel, Thomas W. and Will Martin. "Developing Country Interests in Liberalizing Manufactures
Trade." Background Research Paper for Seattle Ministerial Meeting , Seattle, Washington:
1999.
Oyejide, T. Ademola, Ogunkola, E. Olawale, and Bankole, S. Abiodun. "Quantifying the Trade
Impact of Sanitary and Phytosanitary Standards:  What is Known and Issues of Importance for
Sub-Saharan Africa." Paper submitted to Quantifying Trade Effect of Standards and
Regulatory Barriers: Is It Possible?  The World Bank, Washington D.C.
Wilson, John S. "Technical Barriers to Trade and Standards, Challenges and Opportunities for
Developing Countries presented by the World Bank." Paper submitted to the Technical
Barriers to Trade Committee Meeting, World Trade Organization , Geneva: 2000.
World Trade Organization. The SPS Agreement . WTO, Geneva: 1995.G/SPS/GEN/195
Page 20
Committee on Sanitary and Phytosanitary Measures, World Trade Organization. The SPS Agreement
and Developing Countries , G/SPS/W/93, WTO, Geneva: November 1998.
Committee on Sanitary and Phytosanitary Measures, World Trade Organization. Review of the
Operation and Implementation of the Agreement the Application of Sanitary and
Phytosanitary Measures , G/SPS/12, WTO, Geneva: March 1999.
Committee on Sanitary and Phytosanitary Measures, World Trade Organization. Summary of the
Meeting Held on 10-11 March 1999 , G/SPS/R/14, WTO, Geneva: May 1999.
World Bank, The Animal and Plant Health Protection Project, Project Appraisal Document, May 6,
1999, Report No: 19255-BR.
World Bank, Pilot Fisheries Development Project, Project Appraisal Document, April 13, 1999,
Report NO 19038-MOR.
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