Otsuki _et al._ (2001) argued that these standards are unnecessarily stringent given the estimated level of risk reduction that would be achieved. However, their work is widely cited for another reason, namely its econometric estimation of the potential ‘loss’ of African trade which might be attributable to the change in the European Union’s standard. Using a gravity model, which incorporates a number of variables assumed to impact bilateral trade flows, it compares existing levels of African exports to the European Union with: (i) what they would likely be following the implementation of the new standards; and (ii) what they might have been had the EU adopted the Codex standard of 15ppb across all of the product categories. It indicates that African exports to the European Union of cereals, nuts and dried fruit totalled $770 million, but that this would decline to $372 million following the adoption of the standard, a reduction of around $400 million. Conversely, had the EU adopted the Codex standard, it is estimated that African exports of these products would have increased to $1.039 billion. Hence, the decision by the European Union to adopt the more stringent standards was estimated to have ‘cost’ Africa some $667 billion.

The conclusions of this work were headline grabbing yet widely misinterpreted. Many subsequent commentators have mistakenly referred to the estimates as if they were ‘actual’ losses of trade rather than the results of an econometric simulation exercise. There are a number of shortcomings with this method that need to be taken into account when interpreting these results.<sup>39</sup> However, the major focus here relates to the value of exports, both before and after the adoption of the European Union’s standard, and the lessons which stakeholders are taking from this example.

One particular problem relates to the trade data used in the study to establish the baseline. Otsuki _et al_ . (2001) presented data suggesting that African exports to the European Union (in 1998) were $472 million for dried fruit and nuts and $298 million for cereals, with the bulk of this trade seemingly occurring with France. These figures seem implausible, especially for cereals given the lack of African competitiveness in this sector vis-à-vis Europe. Indeed, statistics from UN COMTRADE show a much lower level of European imports from Africa in 1998, amounting to $104 million of dried fruit, $45 million of groundnuts, $27 million of other edible nuts and less than $14 million of cereals and cereal products.<sup>40</sup> This suggests that the baseline against which the impact of the standards should have been assessed is $190 million (CIF value) rather than $770 million.

Turning to the evidence on impact, the bulk of this should relate to Africa’s trade in dried fruit. Most of the region’s dried fruit trade is accounted for by two North African countries-- Tunisia and Algeria--whose exceptionally dry climate contributes to a very low incidence of aflatoxin. The only other African country with any history and recent strength in exports of dried fruit is South Africa. The new EU standards came into full force in April 2002. Both in the year proceeding and the year following that date there were _zero cases_ of dried fruit consignments from Africa being detained on entry to the European Union. In fact, while total imports of dried fruit declined somewhat in 2002, imports from Africa increased, expanding Africa’s share of the

> 39 See, for example the discussions about gravity models and other approaches to estimating the trade impacts of standards in Beghin and Bureau (2001), OECD (2003) and Wilson (2003).

> 40 In that year, exports from the African continent of cereals totaled $105 million, with Egypt accounting for $70 million.  The vast majority of this trade was conducted with countries of the Near East and Middle East.

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