Economic analysis of technical barriers limiting agricultural trade of China

• Australian National University, Australia
• Renmin University of China, China

World Trade Organization rules include regulations to protect human, plant and animal health. Some of these regulations act as technical barriers to trade (TBT) - those designed as legitimate means to protect against the spread of diseases, contaminants and the like. These TBT measures should be based on objective scientific evidence and minimise trade distortions. Some TBTs impose undue costs and requirements on developing countries adopting sanitary and phytosanitary measures to promote trade. These SPS measures, set by trade partners as entry requirements for agricultural produce, have created challenges for many developing countries. In cases where these may be used as an unjustified barrier to entry WTO processes allow for both informal and formal processes of appeal and settlement. The onus is on the appellant to prove they meet these requirements. One element that can strengthen the argument of developing countries is designing production systems that meet international standards. These must engage producers throughout the system, from large scale to smallholders.

China has registered six informal challenges to TBTs from other countries, with growing concern within the country that SPS regulations are being used to restrict its trade options. Helping China better place itself both to assess technical barriers and develop strategies to meet these, together with the use of risk assessment in assessing production-process requirements for its own producers should result in increased opportunities for trade.

To improve the performance of China's regulatory regime concerning technical barriers to agricultural trade, the project is improving agricultural export performance in labour-intensive, high-value products by enhancing knowledge of the technical barriers China faces and the opportunities that exist for expanding trade.

Inventory constraints to China's export opportunities arising from technical barriers by reviewing existing literature and compilations and conducting interviews within private sector and government. The inventory will identify barriers that are potentially out of compliance with relevant international rules and might be subject to modification to expand trade opportunities, and barriers that can be overcome through appropriate private and public investments. It is hypothesized that a significant number of barriers will be identified in each category but that the inventory will also increase understanding of legitimate uses of regulations to achieve risk reduction and food quality goals.

Evaluate the benefits and costs of modifying selected barriers within an integrated risk assessment and economic model through field research assessing risks and costs. This will be followed by Risk and economic modelling. It is hypothesized that the analysis will demonstrate that selected existing regulations cause economic losses to China's agricultural exporters and that risk mitigation procedures that do not have prohibitive costs can be implemented by the private and public sectors to reduce risks to minimal levels and facilitate trade, leading to net benefits to Chinese farmers and consumers in the importing countries.

Enhance the understanding of technical barriers among private-sector and public decision makers within China utilising the knowledge generated under objectives 1 and 2. Improved understanding of the risk and economic issues related to technical barriers will contribute to establishment of the well-functioning regulatory system of importance to all agricultural exporting and importing countries. Presentations of results will be made to professional and policy audiences.