Challenges for China’s Agricultural Exports: Compliance with Sanitary and Phytosanitary Measures

In the food safety arena, a clear role for government is to adopt sanitary and phytosanitary (SPS) measures to protect human, animal, and plant life or health. Relative to developing countries, developed countries tend to adopt more stringent food safety standards and regulations with a broader scope and to rely increasingly on certification and traceability. The additional costs of compliance for meeting international SPS requirements are higher for firms operating in developing countries because they must take additional steps to meet international food safety regulations and standards. Therefore, their comparative advantage, achieved through lower production costs, will tend to be reduced because of high incremental compliance costs. Given that a high proportion of developing countries’ exports are agricultural and food products and that export destinations are mainly developed countries, concerns have arisen that SPS measures are affecting developing countries’ access to export markets. China provides a good example of the potential and problems of compliance with SPS requirements and other private standards required by foreign retailers because many of the problems China is facing in agricultural production and in exports are common to other developing countries. Developed countries, including Japan, account for a major share of China’s agricultural exports. Thus, examining China’s SPS conditions in agricultural production, efforts to overcome SPS problems, and ability to adjust SPS controls to demand in the markets of developed countries provides lessons on approaches that might be used by other developing countries faced with similar problems. Given the major challenges found in China, we focus the SPS issues on food safety and quality control.