Conference on International Food Trade
Beyond 2000: Science-Based Decisions, Harmonization, Equivalence
and Mutual Recognition
Melbourne, Australia, 11-15 October 1999

Food Trade and Implementation of the SPS and TBT Agreements:
Current Status of Food Trade, Including Food Quality
and Safety Problems


W.C.K. Hammer, FAO Consultant

Table of Contents

I. Introduction

1. In his renowned, Essay on the Principles of Population as it affects the Future Improvement of Society, published in 1798, T.R. Malthus postulated that human population will always tend to outrun the food supply and that betterment of mankind was impossible without limiting population. In Malthus's pessimistic view poverty, hunger and competition for food were man's inescapable lot.

2. Fortunately, Malthus's forebodings have not eventuated to the extent he believed they would. While global population has increased exponentially it has not yet outrun the food supply. Sadly, regional food shortages and undernutrition do exist, and some 840 million people in the world do not have access to sufficient supplies of food of adequate quality. However, this situation largely results from problems associated with economic and distribution difficulties, and concomitant social and climatic circumstances. Generally, total world food supply has exceeded requirements with sufficient being available to enable international trading . Continuing research in the fields of ecotechnology, biotechnology, agricultural science and food technology augurs well for the food supply continuing to match requirements and to sustain a burgeoning international food trade.

3. Currently, consumers worldwide have access to a wider variety of high quality foods in larger quantities than formerly. Two developments have contributed significantly to the increase in both the quantity and variety of food moving in international trade. The first has been the dramatic increase in the number of countries, especially less-developed countries, involved in the production of food for export. The second has been the internationalization of food tastes and habits. The first is associated with economic development, commercial strategy and the acquisition of valuable foreign exchange; and the second with the global movement of people and the discovery within national communities of the delights of international cuisine.

4. The value of the very large international trade in food now exceeds US$400 billion per annum (the total value of international trade is currently estimated at US$6.5 trillion) and accounts for something in the order of 500 million tonnes of food products - and on average the trade has continued to grow significantly since 1990. Annual growth in US food imports from less-developed regions for the period 1990 to 1998 have been Central America and Caribbean, 6.3%; South America, 1.6%; former USSR and adjoining countries, 11%; Asia, 5.9% and Africa,4.8%. Products traded largely embrace the entire spectrum of foods and include fresh, preserved and processed products of plant, animal and marine origin as well as live animals. The trade is very complex and includes producers, exporters and importers, national governments, international organizations, trade associations and a myriad of merchants operating within a framework of both statutory and non-statutory arrangements. The attractive rewards available from successful food trading have resulted in an increasing number of countries - both developed and less-developed - becoming both importers and exporters. Currently, countries of the European region are the main importers of food followed by those of Asia and North and Central America. Those regions, in the same order, are also the main exporters of food. The dominant less-developed country exporters to the U.S. are Mexico, Thailand, Ecuador, Brazil, Chile, Colombia, Indonesia, Costa Rica, China, Guatemala, and India.

5. Available data suggest that about 75 percent of the world trade in food comprises exports from and imports into the industrialised (developed) world. However, in the case of some commodities including fruits and vegetables, sugar, non-alcoholic beverages and fish and fishery products, the less-developed world accounts for more than 50 percent of the world export trade, and its involvement in the export of processed foods is increasing.

6. It is of relevance that food and food products imported into the U.S. during 1998 totalled US$35 billion of which US$20 billion (55%) originated in less-developed countries. As with international trade in general, the rate of growth in imports of food and food products into the U.S. over the period 1990 to 1998 was roughly double the rate of growth of U.S. GDP, that is, 4% per year for developed countries and almost 5% per year for less-developed countries. Less-developed countries supply more than two thirds of the coffee, spices, fruits and nuts, vegetables, preparations of meat and fish, and seafood imported into the U.S. In summary, the less-developed countries account for more than one-half of total U.S. imports of food and food products. Eleven of those countries supply almost 40% of all food and food products imported into the U.S. and they account for more than 70% of all food and food products supplied by all less-developed countries combined.

7. In general, it can be said that developed countries are net importers - they import about 22 percent more food in monetary terms than they export. Less-developed countries are in general net exporters, exporting about 15 percent more in monetary terms than they import. For some developing countries in Asia and Africa, food exports from 1987 to 1997 have roughly increased by as much as 25 percent. In the case of some less-developed countries the percentage is higher and for others significantly lower. The international food market is of great economic importance, especially to less-developed countries with their limited financial resources and social problems. Not only does food exporting generate foreign exchange, it also creates and provides employment within the exporting country at all stages in the production chain from growing to shipping.

8. In order to be a successful food exporter a country must produce foods that are both sought after and be of acceptable quality to consumers in other countries. As importantly, those foods must comply with the statutory requirements of importing countries. Compliance with the statutory , compulsory or mandatory requirements of importing countries is an unavoidable and essential prerequisite to successful and profitable food exporting. However, compliance is becoming increasingly demanding because of the preoccupation of the world community with food quality, and more especially with food safety quality and associated health hazards. In addition, an increasing number of importing countries are demanding adoption by exporting countries of agreed inspection and examination procedures, and prescribed food safety systems as well as certification by governments of exporting countries that products are in compliance with mandatory import requirements.

II. The Nature of the World Food Trade


9. Before this present century, international trading in food was relatively simple. It took place between buyers and sellers on the basis of contracts which included agreed prices and quality specifications. There was little, if any, government intervention and the trade was mostly based on commercial transactions between the parties involved.

10. However, dishonest food traders, both national and international, found that the unregulated markets gave them an excellent opportunity to exploit consumers through unfair trade practices associated with misrepresentation of product and misleading labelling. They also threatened the health of consumers by adopting fraudulent practices which in some cases were life threatening. Adulterants, including toxic colouring and flavouring agents , dilutants and other unacceptable materials were commonly added to foods and product substitution was blatant.

11. As a consequence of public reaction to those practices a number of countries in Europe, North America and in other regions enacted food laws and established food import and export control agencies to protect consumers. As a result, governments became directly involved in the food trade by the early 1900s. Government intervention did, however, create problems. Individual countries independently, and without reference to other countries, enacted their own laws and adopted their own standards for individual foods resulting in an international labyrinth of requirements. Consequently, international food trade was impeded by the difficulties exporters had in complying with different national requirements for products of the same kind. The situation finally led to a plea from the trade to internationally harmonise requirements.

12. A number of unsuccessful attempts were made to standardize foods regionally and internationally and thereby harmonise food requirements globally. Those attempts did, however, eventually lead to the establishment in 1962 by the United Nations Food and Agriculture Organization (FAO) in collaboration the World Health Organization (WHO) of the Codex Alimentarius Commission (CAC) to implement the Joint FAO/WHO Food Standards Programme. Essentially, the purpose of the Programme was to protect the health of consumers, ensure fair practices in the food trade and to facilitate the international trade in food.


13. In 1986, world governments began a review of the 1947 General Agreement on Tariffs and Trade (GATT) with the objective of adopting modifications that appropriately corrected abberrations in trading behaviour and practices that had developed during the intervening years resulting in unfair competition and inequities in market access . The review, entitled the Uruguay Round(UR), concluded with the signing of the Final Act - which embraces agriculture and agricultural products - in 1994 by 125 of the participating countries. The Multilateral Agreements on Trade in Goods appended to the Final Act includes three Agreements of particular relevance to the international food trade.


14. Well before the Uruguay Round, consumers had been pressuring governments to protect them from poor quality food and more especially from foodborne health hazards. Largely as a consequence of consumer organizations being established, becoming entrenched and intensifying their efforts the area of food safety and consumer health became a political issue, and as a result parliaments in many countries actively took steps to protect consumers.

15. Surveys conducted by government food control agencies and others have established that consumers are not as concerned about foodborne hazards they can see, feel, taste and smell as they are about invisible hazards. The fear of ill health, or even death, from these unseen causes provokes a continuing consumer demand that governments maintain an unremitting vigilance to guard against their occurrence and, when necessary, take action against them. The surveys have disclosed that internationally consumer concerns about food hazards mainly relate to foodborne disease resulting from contamination by germs; the presence of harmful residues of pesticides and other materials applied or administered to food during its production; contamination by harmful substances originating in the environment, especially from pollutants in the atmosphere and water; unsafe additives used in food processing to enhance quality; and radioactive contamination.

16. It is these expressed concerns of consumers that have effectively influenced the actions taken by governments at national and international levels to provide protection and to penalize those responsible for health threatening and dishonest practices in the food trade. However, in some cases government reaction has resulted in overly restrictive requirements that have become trade barriers and hindered international food trade.


17. In particular, the Uruguay Round SPS Agreement adopted by the 134 member governments of the World Trade Organization as signatories to the Final Act has established guidelines to apply to the aspect of safety quality under which the international food trade is obliged to operate. The Agreement also recommends actions to facilitate that trade through harmonisation. The guidelines and recommendations may be summarized as follows:

III. Food Quality


18. The perturbing thing about references to food quality is that more often than not, it is unclear what precisely is meant. Consumers are undoubtedly serious when they say they desire better quality food, or food of a higher standard, but it is suggested that quality means different things to different people. This view was reflected some years ago by a prominent figure in the field of international food standards as "that portmanteau word having a bewildering variety of meanings".

19. Not uncommonly, a food is said to be of good quality when it contains a high proportion of a prized ingredient or ingredients: for example cream in ice cream, fruit in jam, butter in cake and so on. In this sense, quality refers to richness. However, the quality of richness is closely associated with appearance, taste, smell, texture and feel. Collectively, those attributes amount to what might appropriately be called sensory or aesthetic quality. That is to say, when consumers speak of quality they are in fact referring to how a food looks or feels or tastes or smells, or a combination of them. Kramer, in Food and the Consumer , maintains that a substantial proportion of the world population, including the vast majority of those in developed countries, selects foods not on the basis of their contribution to a nutritionally balanced diet, but to satisfy or feed the senses. Because sensory quality is a subjective thing that mostly eludes scientific determination, its description remains a problem to those writing quality standards.

20. It is in the area of sensory quality that fraudulent and dishonest practices have abounded in the past and, to a lesser degree, still do; and in some instances have brought the commercial reputations of a number of international trading countries into disrepute. Because unscrupulous merchants continue to use poisonous dilutants and hazardous additives to mislead consumers, governments have taken appropriate legislative action. The booklet, Quick Tests for Some Adulterants in Foods, published recently for the use of consumers in one country includes checks for added water and starch to milk; added margarine to ghee and butter; castor and minerals oils added to edible oils; chalk powder added to sugar; sugar solution added to honey; metanil yellow (coal tar derivative) added to icecream and beverages, and many more. The full extent of food adulteration in international trade is unclear, but anecdotal evidence suggests the practice is alive and well, especially in respect of ingredient substitution and fraudently enhancing sensory qualities, particularly colour and flavour.

21. Nutritional value is another connotation of quality. In prehistoric times man developed an instinctive liking for meat and fruit which incidentally, but importantly, provided him with all the protein and essential nutrients he required. When he ate what he liked, he ate what he needed. However, because of the tremendous range of concocted foods now available, it is no longer true that when you eat what you like you eat what you need. It may be generalised that people like and eat foods they find palatable and are accustomed to, not necessarily those that are good for them. As consumers have become better informed about foods and their nutritional consciousness increased the attribute of nutritional quality has grown in importance; hence the heightened demand for nutritional labelling.

22. Another connotation of quality is the ability of a food to keep - its keeping quality or capacity to retain its sensory characteristics and safety in given ambient conditions. Another relates to the freshness of food and is associated with the view that fresh is best. Accordingly, it is believed by those who use quality in this sense that the closer a processed product is to the fresh product, the higher its quality.

23. A connotation of quality that persistently prevails in the thinking of both producers and consumers, and pervades the food quality thinking of the community, relates to its safety and wholesomeness. It is this sense of quality consumers have in mind when they ask the question whether a food is safe or wholesome and whether or not it is a health hazard.

24. The relative importance attributed to safety quality is reflected in the fact that in most, if not all countries the first food laws were directed at protecting consumers from practices in the food trade that threatened consumer health. The seriousness attributed to this threat as long ago as the early Nineteenth Century is mirrored in the title page of a work of that time by Frederick Accum, one of the pioneers of food analysis. The title of the work, A Treatise on the Adulterations of Food and Culinary Poisons, Exhibiting the Fraudulent Sophisitications of Bread, Beer, Wine, Tea, Coffee, Cream, Confectionery, Vinegar, Pickles , Pepper, Cheese,Olive Oil, and other Articles Employed in the Domestic Economy, and Methods of Detecting Them, appears above a funerary urn encircled by serpents and surmounted by a skull under which appears the biblical quotation, `There is DEATH in the Pot.'


25. Those responsible for the establishment of the Joint FAO/WHO Food Standards Programme and the Codex Alimentarius Commission were first and foremost concerned with protecting the health of consumers and ensuring fair practices in food trade. Above all they were conscious of the importance of sensory and safety quality to consumers, and reasoned that if all countries harmonised their food laws and adopted internationally agreed quality standards their concerns would be met. They also foresaw that such harmonisation would lead to fewer barriers to trade and a freer movement of commodities between countries to the benefit of farmers and their families, and a reduction in hunger and poverty. They also concluded that in an important way the Codex Alimentarius - a collection of internationally adopted food standards presented in a uniform manner - would be a panacea to some of the difficulties that were impeding freedom of trade. This view is reflected in the purpose of the Codex Alimentarius, to protect consumer health, ensure fair practices in the food trade and through harmonisation facilitate international trade.

26. To achieve that purpose the Codex Alimentarius Commission has elaborated a multitude of commodity standards and standards for residues, additives and contaminants that address food quality in all its connotations. The 237 so-called vertical or recipe standards for individual commodities including those for many products traded internationally are deliberately structured to do this. The adopted format for standards ensures that at least consumers receive products of minimum acceptable sensory quality and that are not a hazard to health. Provisions in the format for, The Name of the Standard, Scope, Description, Weights and Measures, and Labelling are intended to ensure the consumer is not misled and induce confidence that the food item purchased is what the label says it is. The Essential Composition and Quality Factors provision ensures that the consumer will not receive a product below a minimum acceptable standard of sensory quality based on international consensus. The Food Additives and Contaminants and Hygiene provisions reflect scientifically determined acceptable limits for safety quality and are directed at the protection of the health of consumers.

27. Currently, the safety quality elements of the Codex Alimentarius, the so-called `horizontal' standards for residues, contaminants and additives with across-the-board relevance for all commodity standards have become predominant, and the compositional or sensory quality elements of individual commodity standards do not attract the same interest as they did previously. This reflects the community's preoccupation with safety quality and related health hazards. National governments also see safety as being of highest priority and, with few exceptions, currently focus their food control activities on this aspect of quality leaving sensory quality aspects to the food industry on the grounds that it is in the best position to determine the likes and dislikes of consumers with consumer acceptability being the final arbiter. However, interest in the sensory quality provisions of Codex standards does remain, and the future importance attributed to them will largely depend on community attitudes and demands. It can also be argued that the adoption by national governments of both minimum sensory and safety quality attributes, as adopted in Codex standards, for food exports below which product may not be exported is essential to the establishment of a commercial reputation for being a reliable supplier of food of acceptable quality.


28. Foodborne disease resulting in illness due to contaminated food is arguably the most important international health hazard of our time with foodstuffs being the greatest source of risk from chemical and biological agents affecting all countries, regardless of level of development. The 1992 FAO/WHO International Conference on Nutrition held in Rome identified contaminated food as the source of communicable and non-communicable diseases causing the suffering of hundreds of millions of people globally. The World Health Organization has recorded that each year the seven main pathogens (Campilobacter jejuni, Clostridium perfringens, E.Coli 0157:H7, Listeria mononcytogenes, Salmonella, Staphylococcus aureus and Toxoplasmodium gondii ) cause between 3.3 and 12.3 million cases of infection in the United States alone, resulting in economic losses of between 6,500 and 34,900 million US dollars. WHO has also observed that because only a relatively small number of cases of foodborne disease are reported, their incidence could be 300 to 350 times greater than statistics disclose. It has also been estimated that 70% of the approximate 1.5 billion episodes of diarrhoea that occur globally each year, many resulting in death, are directly caused by chemical or biological contamination of foods traded internationally.

29. While statistics relating to foodborne disease are relatively sparse there is sufficient evidence - some scientific, some anecdotal - to show that the problem is global and sufficiently serious to focus the attention of governments and the food industry on food safety quality . Some of that evidence demonstrates that an increasing number of illnesses are international in scope. This may be accounted for by contamination of product occurring in one country and being exported to another, or people becoming infected from contaminated food in one country and then bodily transmitting the hazardous organisms to another. A most disturbing aspect of the problem is that while governments and food industries with the encouragement of consumer organizations have been increasingly taking steps to apply controls and adopt preventive measures, the problem does not appear to be diminishing and in some places appears to be increasing. Some reasons for this might be that established pathogens and contaminants are coupled with formerly unimportant foods that are now widely used and traded; the identification of new materials and microorganisms that are hazardous to health; migrants demanding their traditional foods in their adopted country; wider media prominence being given to outbreaks of foodborne disease; children and the aged reported to be more susceptible to the effects of hazardous food. Whatever the reason or reasons, the incidence of disease from contaminated food has reached serious proportions worldwide and food safety quality has become of paramount concern to the international community.

IV. Consequences of Quality Defects for the International Food Trade


30. An important consequence of national efforts to control imports of food that fail to comply with statutory minimum sensory and safety quality standards has been the rejection and sometimes destruction of significant quantities of product. This causes serious interruptions to international trade and results in relatively large product and financial losses. Mostly, details of detentions and rejections are not available because of non-existence or concealment, but records of the United States Food and Drug Administration (USFDA), the national agency which regulates all food in the U.S. other than meat and poultry products, disclose that during the second half of 1996, 5701 shipments of food imports were detained of which 90% were due to deficencies in food sensory and safety quality. During the first half of 1997, USFDA detained 4,795 shipments of food imports and refused them entry. Reasons given include insect, rodent and bird filth {1,688 detentions (32%)}; Low acid canned food regulation violation {647 detentions (12.5%)}; Microbiological contamination {585 detentions (11%)}; Incorrect labelling {524 detentions (10%)}; Mould contamination {313 detentions (6%)}; Decomposition {412 detentions (7.5%)}; Pesticide residues at unacceptable levels {364 detentions (7%)}; Unacceptable food additives or food additives at unacceptable levels {339 detentions (6.5%)}; Presence of heavy metals at unacceptable levels {249 detentions (4.5%)} and other unstated reasons {147 detentions (3%)}.

31. Reasons given by USFDA for detentions and rejections in selected categories of food throws further light on safety quality problems confronting the international food trade. In the case of seafood 20% of the 273 import detentions in November 1996 were due to microbiological contamination, and in January 1998, 51% of the 325 detentions were for the same reason . Similarly, 46% of the import detentions of cheese in November 1996 were for microbiological contamination, and for January 1998 the level for the same reason was 96%. Seventy-three percent of the 60 samples of spice taken in January 1996 exhibited higher than acceptable levels of microbiological contamination while 85% of the 46 samples taken during January 1998 were unacceptable for the same reason. Similar patterns of unacceptable food safety quality emerge for other categories including fruits and vegetables, and seasonings. Although the foregoing is only a very small and selected sample it does suggest that the problem associated with food safety quality continues at a significant level and may even be increasing. It should also be said that in practice only roughly 5% of all shipments to the U.S. are examined on arrival.

32. On the basis that the U.S. information relates to only a small part of total food traded internationally, and allowing that food import controls applied by the USFDA are at least amongst the most effective in the world, it is reasonable to suppose that the food safety quality problem on a global scale is likely to be even greater than estimated. The information also suggests that the levels of food detentions and rejections worldwide are unacceptably high representing levels of product loss of major proportions and indefensible in a world where the demand for increasing supplies of food is ever present.

33. It might well be asked why significantly high levels of detentions and rejections of food moving in international trade take place, especially in this day and age of advanced technology, better international cooperation and sophisticated means of communications. While the reasons may be many and varied it is suggested that the most important include the inability of some food export industries, especially in less-developed countries to handle, process, package and transport products to meet the mandatory sensory and safety quality requirements of importing countries; the unacquaintance of governments and industries of exporting countries with the mandatory requirements of food importing countries and lack of adequate export control programmes and associated infrastructures in food exporting countries.


34. While it is a problem to quantify the volume and value of detentions and rejections globally because of difficulties in accessing data, it may be speculated on the basis of the sketchy information available that the volume amounts to thousands of tonnes and the value to millions of US dollars. Although a significant quantity of detained food imports are subsequently released unchanged onto the market and some is reconditioned, the costs of storage, handling, testing, delays and reconditioning together with associated administrative costs may seriously reduce profitability, sometimes to the point of unprofitability. For example, in 1998 the USFDA detained 15,712 consignments of food and food products, including 12,386 from less-developed countries, representing about US$750 million dollars. Of these consignments, only US$15 million were refused entry into the U.S. market. Thus, the vast majority of shipments detained were eventually imported into the United States, but at a cost. It is of interest that about ten years earlier, in 1988, USFDA recorded about 18,000 detentions representing about US$800 million. Despite technological progress and improvements in food control globally during the period, the level of detentions for justifiable reasons have remained disconcertingly high.

35. The cost to both food importing and exporting countries of maintaining control systems to ensure the compliance of imported product with statutory requirements has been increasing steadily and has now reached a point where it places heavy financial imposts on both governments and industry. Consequently, national food control agencies are continually seeking control procedures that are more cost effective as well as providing better control. These efforts have resulted in the adoption of systems such as HACCP which are relatively low cost, place much of the responsibility for product safety quality with industry, are less manpower intensive than on-line and end product inspection and more scientifically based. However, largely because of a paucity of expertise and financial resources, less-developed countries have problems in instituting such systems, with many of them being disadvantaged when the adoption of those systems is a statutory prerequisite to the entry of their products into foreign markets.


36. It is in the economic and national interest of food exporting countries to possess and maintain an international commercial reputation as a reliable supplier of product of acceptable sensory and safety quality. To an important degree, importing countries judge the integrity of exporting countries by the consistency of acceptable product quality and the reliability of certification attesting to its compliance with mandatory import quality requirements. Detentions and rejections of product result from failures on these two counts.

37. It is no secret that food control agencies of a number of the most important food importing countries maintain `risk lists' of exporting countries whose products are unlikely not to comply with mandatory import requirements and whose certification is suspect. Products from listed countries are sometimes automatically detained or at least subjected to the closest scrutiny with accompanying costs. Those countries having a reputation for reliability experience smoother entry of their products at minimum cost. It remains the case that countries with poor reputations as reliable suppliers, and who market product potentially of the highest intrinsic quality, receive less than the price they should because of lack of buyer confidence in the quality of the end product because of real or perceived deficiencies in post harvest handling and preparation.

V. Conclusions

38. It may be concluded on the basis of the foregoing that:

VI. Recommendations

39. Further to the preceding conclusions it is suggested that Conference consider adoption of the following recommendations: