Saving two in a billion: quantifying the trade effect of European food safety standards on African exports

A growing concern over health risks associated with food products has promp ted close examination of sanitary and phytosanitary standards in industrial ized countries. This paper quantifies the impact of a new harmonized aflato xin standard set by the EU on food exports from Africa. We employ a gravity model to estimate the impact of changes in differing levels of protection based on the EU standard, in contrast to those suggested by international s tandards. The analysis is based on trade and regulatory survey data for 15 European countries and nine African countries between 1989 and 1998. Our re sults suggest that the implementation of the new aflatoxin standard in the EU will have a negative impact on African exports of cereals, dried fruits and nuts to Europe. The new EU standard, which would reduce health risk by approximately 1.4 deaths per billion a year, will decrease these African ex ports by 64% or US$ 670 million, in contrast to regulation set through an i nternational standard. (C) 2001 Elsevier Science Ltd. All rights reserved.