1. Introduction

1.1 International trade in fish

International trade in fishery commodities reached US$ 58.2 billion in 2002 (export value), a 5 percent improvement relative to 2000 and a 45 percent increase since 1992. In volume terms, exports were reported to be 50.0 million tonnes (live weight equivalent), having grown by 40.7 percent since 1992. Many countries, developed and developing, export some fishery products with revenues often being a major source of foreign currency. In 2002, 95 countries were net exporters of fish and fishery products with Norway, Thailand, Viet Nam, Chile, Canada reporting net export values of more than US$1.5 billion each and with Indonesia, India, Iceland, Taiwan Province of China, Denmark and Peru having net exports worth more than US$1 billion each. Within this global trade in fish, developing countries registered a net fishery trade surplus of about US$17. 5 billion in 2002 and accounted for 49 percent by value and 55 percent of fish exports by volume. (FAO, 2004)

In 2002, fish imports reached more than US$61 billion in value (a new record) and around 51 million tonnes (live weight equivalent) in volume. Developed countries accounted for about 82 percent of the total value of imports of fish products. In volume terms, developed countries imported over 32 million tonnes (live weight equivalent) of which 68 percent was fish for human consumption, while developing countries imported 19 million tonnes (live weight equivalent) of fish, of which 47 percent consisted of fish for food. About 74 percent of the import value was concentrated in three main areas: the European Community, Japan and the United States of America. These three dominate the world markets both in terms of prices and market access requirements (Table 1).

Japan was once again the largest importer of fish and fish products, accounting for some 22 percent of the world import value in 2002 (US$13.6 billion). The EC further increased its dependency on imports for its fish supply by 10 percent since 2000, with Spain, (US$3.9 billion, the world's third largest importer), France (US$3.2 billion), Italy (US$2.9 billion), Germany (US$2.4 billion) and the United Kingdom (US$2.3 billion) as the main importers. The United States, besides being the world's fourth largest exporting country, was the second largest importer, with imports remaining rather stable at US$10 billion since 2000.

TABLE 1
Total imports for major importing nations/regions (MT)

* Includes intra European Union (EU) imports (EU country to EU country) and extra European Union (EU) imports (non EU countries into the EU). The split is approximately 50:50.

1.2 Current impediments to trade

In the international market of fish and fishery products, one of the most serious difficulties faced by exporters is that different standards and regimes are being imposed by importing countries on producing countries to ensure that products meet the requirements of the target market. Even after the ratification of the Agreement on Sanitary and Phytosanitary (SPS) measures and the Agreement on Technical Barriers to Trade (TBT), under the World Trade Organization (WTO), differences among various national standards and inspection systems may maintain or create new non-tariff trade barriers.

Globalization of food trade, coupled with technological developments in food production, handling, processing and distribution, and the increasing awareness and demand of consumers for safe and high quality food have put food safety and quality assurance high in public awareness and a priority for many governments. This is exacerbated by the series of food safety scares in the 1990s (e.g. bovine spongiform encephalopathy (BSE) and dioxins) and by concerns over technological innovations from biotechnology (genetically modified organisms). Consequently, many countries have tightened food safety controls, imposing on imports additional costs and requirements that are not always technically or scientifically supportable.

Sanitary and hygienic regulations have come to play an increasingly important role during recent years due to negative public perceptions that have grown in major importing markets (Ahmed, 1991). Developing countries have often complained that they are penalized by the complexity of sanitary and quality regulations of major importing countries. In the past, it has been suggested that these regulations have been used as non-tariff barriers. There is no doubt that the implementation of the regulations and the lack of consistent and harmonized criteria have inhibited trade.

The differences between importing countries regulations, standards, organization and function of inspection services, and the modus operandi of such services are among the most important practical difficulties of compliance faced by developing countries. A key problem is the border control where products are rejected or put in detention awaiting resolution or destruction.

1.3 This report

This report analyses the detentions and rejections in international trade and focuses on the three largest fish importers - North America, European Union and Japan. The availability of data is a key consideration in such an exercise, and each of these countries/regions maintains records of detentions and rejections at their borders. The study focuses, at a macro-level, on international trade among countries rather than trade among companies. The latter aspects are mentioned in the study, but only where it contributes to the analysis.

The first chapter outlines the background to the report. Chapter 2 details the regulations in force for the European Union, the United States of America, Japan and Canada providing a picture of what exporters face in each of these importing territories. This chapter also outlines the regulations that govern international trade, specifically the World Trade Organization and the Codex Alimentarius Commission (CAC).

Chapter 3 considers each major importing country/region separately examining the border cases across a range of parameters: problem type (microbial, chemical and other causes), fish species, geography, product type (fresh, frozen, cured, etc.). The chapter will then analyse the data collectively for trends or patterns in the border cases. The case of aquaculture products is mentioned, though available data on production methods (thus allowing specific conclusions to be made about aquaculture) is limited. The chapter also specifically examines the scientific basis for the border cases. Finally, this report attempts to examine the costs to fish trade as a result of border detentions and rejections, but only for Japan for which data on the quantities or values of rejected shipments are available.

The final chapter looks to the future and provides recommendations on what could change to improve controls in international trade in fish and fish products at borders and looks at the potential role of industry, governments and international bodies in this process.

As a final note on terminology, the term "border case" is used to cover any situation where a product is detained, rejected, destroyed, returned to sender or otherwise removed, even if only temporarily, from the trade flow. Our purpose is to focus on the removal of products from trade for whatever reason, and the final destination of the product is less relevant to the discussion than the fact that trade flow has been interrupted, causing an economic impact on the participants in trade. While it is recognized that "refused" products can re-enter into trade flows, such data are not considered in this report.