This project is designed to build the knowledge base for understanding the relationship between food safety and trade. The project consists of two main components. <P> The first main research component will result in a major cross-division publication on the economics of the relationship between international trade and food safety. This publication will include a theoretical section and separate chapters devoted to different food sectors as they are impacted by food safety issues in international trade. <P> The second main research component is a Cooperative Agreement with the University of Illinois. In this Cooperative Agreement, two case studies will be conducted to study the impact of new food safety standards in agricultural markets. One will examine a new food safety standard in the U.S.; the other a new food safety standard in a country that imports from the U.S., most likely the EU. The emphasis will be on how supply chains and trade flows adjust to regulatory change.
Nations desire to protect consumer safety, but most agree that food safety regulations should accomodate growth in international food trade too. This research explores the compatibility between food safety and trade goals, how international markets have adapted to food safety issues, and how food safety regulations are evolving in a global market setting.
The project develops a theoretical economic framework to understand the food safety and trade linkages, and then applies the theory to explore the trade impacts of food safety issues in major international commodity markets--grains, livestock, fruits and vegetables, and fish.
The main output from this project is AER-828 "International Trade and Food Safety: Economic Theory and Case Studies," which was published in November 2003. Several presentations were also given to disseminate the findings. In essence, this AER presents ERS research on the interaction between food safety and international trade. This research was performed by examining the conceptual relationships between food safety and international trade and by examining the meat and poultry, produce,food/animal feed crop, and seafood sectors for trends in trade, food safety regulation, and the resolution of incidents and disputes related to both. This study found that food safety regulations and standards evolve differently around the world as countries respond to food safety crises and prepare for perceived exposure to emerging food safety risks. These differences in regulations and standards among countries can lead to international trade conflicts or disputes and can ultimately affect global patterns of food demand and reduce trade. There has been relatively little disruption to food trade for safety reasons when considering the magnitude of global food and agricultural trade ($436 billion in 2001), notable changes over the past decade in food consumption, production, and trade; the vast number of variety of food categories and products traded; the roughly 200 countries participating in food trade; and challenges to food safety that include pathogens, pesticide and drug residues, food additives, environmental toxins, persistent organic pollutants, unconventional agents such as those associated with mad cow disease, and zoonotic diseases.
The study found that trade fictions related to food safety can be persistent, and that coherency between trade and food safety goals will continue to require private costs and public intervention and investment.