The Role of Public and Private Standards in Regulating International Food Markets
January 21, 2007 |
by Spencer Henson
Paper prepared for the IATRC Summer symposium "Food Regulation and Trade: Institutional Framework, Concepts of Analysis and Empirical Evidence" Bonn, Germany, May 28-30, 2006
While much of the focus of the economics literature has been on the role of public food safety and quality standards both as policy instruments and as non-tariff barriers to trade, it is evident that private standards are playing an increasing role in the governance of agricultural and food supply chain. This paper provides an overview of the evolution of private food safety and quality standards, outlining how and why business-to-business and private collective standards have come to play an increasingly dominant role in determining the action of firms in the agricultural and food sectors, and the ways in which such standards influence trade flows. While there has been very little empirical analysis of the trade impacts of food safety and quality standards, the paper contends that they can play a contrasting role in both reducing and enhancing trade in agricultural and food products. At the same time, however, it is evident that private standards fall outside of the governance structures established by the WTO, raising challenges for the future role of the SPS and TBT Agreements.