RegionalsourcingandprogressontheproposedADBProject

TradeFacilitation:ImprovedSanitaryand Phytosanitary(SPS)HandlinginGreater Ph t it (SPS) H dli i G t MekongSubregion (GMS)Trade

By

Kees vanderMeer
(RPPTAconsultantteamleader) EighthMeetingoftheWorkingGrouponAgriculture(WGA8) Ei hth M ti f th W ki G A i lt (WGA 8) 2526October2011,Siem Reap,Cambodia

Overview
TrendsinGMSTrade Potentials and constraints Potentialsandconstraints ContributionofGMSSPSProject

IncreasedGMStradeandtrade integration
RecordedGMSintraregionaltradeisgrowing fasterthanexternaltrade(588%and417%) More so in Agriculture Food and Forestry MoresoinAgriculture,FoodandForestry (AFF)trade(465%and240%) ThisshowsclearlytrendinGMStrade g , p y integration,especiallyforAFF

RecordedGMSExports2000and2009bydestination p y
Value(BillionUS$) Totaltrade Total trade GMS NonGMS TotalAFF GMS NonGMS Food&liveanimals Food & live animals GMS NonGMS Nonfood G S GMS NonGMS 2000 336.4 12.2 324.2 29.7 2 27.7 25.9 25 9 1.2 24.7 3.8 08 0.8 3 2009 1423 71.7 1351.3 76.9 9.3 66.6 67.2 67 2 5.4 61.8 9.7 38 3.8 5.9 %increase 423 588 417 259 465 240 259 450 250 255 475 5 197

AFFTradeGrowthinGMS AFF Trade Growth in GMS

MainreasonsforAFFgrowthinGMS:
Muchimprovedconnectivity Economicgrowthanddemand

Sources for increased AFF trade SourcesforincreasedAFFtrade

Rapideconomicgrowthintheregion Tourism T i Urbanization,retailrevolution Addingvalue;shifttobetterprice/qualitysegments Availableresourcesforproducingrawmaterials

ObstaclesfortappingunrealizedAFF tradepotential
CompetitionfromoutsideGMS U d d l UnderdevelopedsupplychainsinGMS d l h i i GMS
Scatteredproduction,smallvolumesofvarying quality,seasonality,informaltrade

Obstacles / weaknesses in SPS field: Obstacles/weaknessesinSPSfield:

Proceduresmorecostlyandrequirementsmore restrictivetotradethannecessary restrictive to trade than necessary Healthprotectioninsufficient

MaindeficienciesGMSSPShandling Main deficiencies GMS SPS handling

Transparency weak regulatory framework; Transparency weakregulatoryframework; insufficientinformation Not riskbased poor data on pest and disease Notrisk based poordataonpestanddisease situation;samerequirementsforlowandhighrisk products Foreignanddomesticproducersnottreatedequally Measures excessive in relation to risk Measuresexcessiveinrelationtorisk Widespreaduseofprecautionaryprinciple Lackoftrust andinformationabouteachothers systems Lackofcapacities inmanagingSPS

ProjectRationale,OutcomeAndScope Project Rationale Outcome And Scope

R Response: I InvestmentProjectstoupgradeSPS P j d SPS capacitiesinCambodia,LaoPDR,VietNam;and RegionalTA Regional TA InvestmentlogicderivesfromGMSRegional CooperationStrategyandProgram(RCSP) Cooperation Strategy and Program (RCSP) Primaryneedistoaddressinstitutionalcapacityand issuessurroundinghandlingofAFFtrade issues surrounding handling of AFF trade Impact: AFFproductsbecomesafer,moreefficiently p produced,andtradedingreaterquantities , g q Outcome: anenhancedSPSmanagementsystemin , LaoPDR,CambodiaandVietNam

ProjectOutputs Project Outputs

1. Strengthenedplant,animalandfoodsafety 1 Strengthened plant animal and food safety surveillanceprograms(improveddatacollectionand
analysis,fieldsurveys,annualprogramsofmonitoringand analysis, field surveys, annual programs of monitoring and responsecapacity,applicationofriskbasedapproaches)

2. Enhanced Education Levels/University Training of EnhancedEducationLevels/UniversityTrainingof SPSSpecialists (curriculadevelopment, improvedqualityof

teachers,improvedlaboratoryandteachingfacilities) , p y g )

3. ImprovedRegionalCooperationand Harmonization (participation in regional fora technical (participationinregionalfora,technical

twinningarrangements,bilateralworkinggroupsetc)

MajorDesignFeatures Major Design Features

C CurrentSPScapacityisverylow;technical t SPS it i l t h i l approacheshaveadoptedsimpleandcosteffective designs(e.g.,rapidtestkits)basedonpilot testingand designs (e.g., rapid test kits) based on pilottesting and scalingupovertime Emphasisonuniversityteaching,NOTresearch(to scaleuphumanresources)andselectiveregional engagement Si ifi t b i Significantsubregional orientation;supportsregional l i t ti t i l AFFtradedevelopment,engageswithvarietyof institutionsandresourcesetc(regionalactivitiesareabout institutions and resources etc (regional activities are about
20%ofalltechnicalactivitiesbycost)

RecurrentfundingofSPSsystemsisunavoidable.

ProjectComponentsAndApproximate Costs(CambodiaandLaoPDR)
Component PlantHealth AnimalHealth FoodSafety AcademicEducation ProjectManagement Project Management Total
*proposed/TBD

Cost($000)* $ Cambodia 2517 2550 1807 2560 1962 11396

Cost($000)* $ LaoPDR 3179 3510 2844 2244 2666 14443

ProjectComponentsAndApproximate Costs(VietNam)
(Sub)components 1.1Surveillancesystem ll 1.2Importhandling p g 1.3Restaurantsintouristareas 1.4Upgradinglaboratorysystems 2.Projectmanagement 2 Project management Total
*proposed/TBD

Cost* 2400 550 947 6008 1450 11355

ProjectBenefits Project Benefits

DifficulttoquantifyimpactofSPSprojects,BUT: Diffi lt t tif i t f SPS j t BUT Withoutproject:
AFFtradewillremaininformal/unregulatedandlow d ll f l/ l d dl value(majorspecificopportunitiesforPRCtradewill belost); ); exposuretodiseaseriskswillincrease; CLmaybecomedumpingground; CLVwillremainsubregional weaklink

Rangeofpotentialbenefitsfromplant,animal, educationandfoodsafetyinterventionsmaybe around$10millionineachcountryannually

Processingschedule Processing schedule

GMSSPSActionPlanendorsed2010 ADB Concept Note including CLV and RPPTA ADBConceptNoteincludingCLVandR PPTA November2010 Loan/grantnegotiations December2011 / b ADBBoardApproval February2012 pp y