Barriers for non-implementers of EU standard

HACCP,Fishery export to ASEAN countries

with potential role of MRAs

Wai Yee Lin(Ph.D)

Assistant Director

Ministry of Commerce

Myanmar @ UNCC, Bangkok, Thailand

Workshop on Analyzing NTM measures

UNESCAP , 26-27th April , 2017

Introduction

• Myanmar is traditionally an agrarian country exports a variety of

primary produces cultivated by a majority 70% of population

• Little investment in quality infrastructure during last 30 years

(UNIDO,2013). Trade-supported industries were not so successful in export

aimed at lucrative markets (ITC,2015)

• Image of Myanmar food products No strong brand image (e.g.

sea food) in international market (CBI,2012) however, neighboring

countries (China,Thailand, Bangladesh,etc.) are buyers and re-exporters of

Myanmar (fishery) products

• Only 14% of fishery firms equipped with EU standard HACCP in

Myanmar (Wai et.al,2016)

• So how about other 86% (non-implementers) ? How firms achieved

technical requirements [food safety management system-FSMS] at firm

level?What are the barriers , if they want to integrate the system?

• Reasons for non-implementation of HACCP are complicated than often

recognized and cannot be explained solely in terms of the ‘‘unwillingness’’

Source: Internet and DOF

Methodology -Materials and Method

Study Area States/Divisions

Yangon,Mon,Ayarwaddy,Rakhine,Tanintharyi

Target Group & Theme Fishery Firms:

- Non-implementers of EU standard HACCP (n=36)

- Food safety Management system at firm level

- Quality Control, Use of ICT, Future plan for integration

- Barriers for non-implementers

Data Collection Primary Data

Telephone Interviews using structured Questionnaires

Secondary Data

Available data, documents, regulations, laws, directives, etc.

Instrument 1st Data- structured questionnaires

2nd Data- scientific journals, Publication of relevant organizations,

Analytical Method Qualitative and Quantitative Analysis

Descriptive Statistical Method

Objectives of Study

1. To investigate barriers for non-implementers

of EU standard-HACCP in fishery processing

firms in Myanmar

2. To examine regional fishery trade with

potential role of MRAs for policy support

Result and Discussion

(1) Barriers for non-implementers of EU standard

HACCP

Coas

tal

Y

angon

Y

ango

n

Yangon (Jetty) other 4 states/Regions–Coastal

Approved Processing Plants in Yangon

[Processor–cum-Exporter or Processor]

Raw from SEA

Exporters

Raw

Collectio

n

Pro

cessing

Expo

rt

China, ASEAN,ASIA, etc.

Mark

ets

5

3

1

4

2 Main Markets

(1)China only

(2) AEAN countries only

(3)Japan only

(4) ASEAN,other countries,China

(5) Domestic (ex:to Yangon)

(%)

19.4

0.0

8.3

52.8

19.4

Processing Plants in Myanmar [2016-2017]

Table: Types of Processing Plants in Myanmar in 2016-2017

States / Division

Classification

total Cold store and

Processing plants Surimi

Fish-

meal

Dry-

prawns

Prawn-

shell

dust

Canning

Yangon 63 2 4 - - - 69

Tanintharyi 10 2 5 2 - - 19

Ayeyarwaddy 8 - 1 - - - 9

Mon 5 - - - - - 5

Rakhine 8 - 1 - - - 9

Shan 1 - - - - - 1

Total 95 4 11 2 - - 112

Source: Data of DOF

Variables %

Year of establishment

(1) before 1995

(2) 1995-2000

(3) after 2000

8.3

44.4

47.2

ISO certificate

(1)Yes

(2) No

5.6

94.4

Firm Size

(1) less than 50

(2) 50-100

(3) more than 100

26.5

14.7

58.8

Ownership

(1)National

(2) J.V

(3)Foreigners

91.7

5.6

2.8

Type of Business(Plants)

(1)Processor cum exporter

(2)Processor

36.1

63.9

Main Markets

(1)China only

(2) AEAN countries only

(3)Japan only

(4) ASEAN,China,Other countries

(5) Domestic (ex:to Yangon)

19.4

0.0

8.3

52.8

19.4

Foreigner experts appointment

(1) Yes

(2) No

8.6

91.4

Buyers’ Quality control(Person)

(1)Yes(visit before buying)

(2) No

60

40

• great majority of labor(73%) were women, no

specific requirement for processing workforce, even

though specific requirements needed for managerial

staffs

• many of them(89%) of firms did not had foreigner

experts. However, (60%) of them said that Buyer

Q.C came and inspected before making contract

• Nearly 2/3 (66.7%) had internal quality control staffs

• Nearly half (44%) knew safety and quality

requirements (of markets) with their experience.

However, more than one third (36%) reported that

they knew detailed requirements from their buyers or

agents

• Use of ITC---(86%) reported that they used many

ways such as email, fax, local agents to accept orders

• 86% had cold store at their factories but the capacity

of cold-stores varied and the largest one is

6000Metric Ton

• 39% said they have the plan to integrate for export to

EU, 39% also did not have the plan to export to

EU,only 22% replied that they were not sure about

the future plan

Result and Discussion

Barriers for non-implementers • Financial (Barrier)

– 92% had no barrier regarding financial and only 8% responded that they

had financial problem.

• Scale and scope of change (Barrier)

– 33% saw that the scale and scope of change needed were barriers if they

want to apply for EU markets, most of them (67%) did not think that it

was a barriers.

• Low Priority (Barrier)

– A few (11%) agreed that application to be registered in national EU

approved factory list is low priority but 89% denied it for other reason

• Questionable appropriateness (Barrier)

– Questionable appropriateness is not regarded as a barrier for 89% of the

firms

• Technical (Barrier)

– 25 % considered as a barrier in integration needed for export to EU

markets because, meanwhile 75% did not consider it as a barrier

Result and Discussion

(2) Regional Fishery Industry and Trade with potential

role of MRAs

ASEAN countries: Export/Import in 2015

Brunei

DarussalamCambodia Indonesia Malaysia Myanmar Philippines Singapore Laos Thailand Viet Nam

Export value US$ Million 0.7 4.2 529.4 110.8 64.5 214.7 69.1 0.1 198.7 71.8

Imports value US$ Million 16 1 29.2 246.6 4.8 33.1 317.4 1.5 193.4 845

529.4

64.5

214.7 198.7

0

100

200

300

400

500

600

700

800

900

Val

ue

in U

S$

Mii

llio

ns

ASEAN countries competing for investment attraction in Fishery Industry

Source:http://www.investmentmap.org/competitorCountry.aspx?selCtry=MMR&selInds=050&selOpt=&selYear=#

ASEAN countries: Fishery Export in 2015

529.4

214.7 198.7

110.8

71.8 69.1 64.5

4.2 0.7 0.1 0

100

200

300

400

500

600

Indonesia Philippines Thailand Malaysia Viet Nam Singapore Myanmar Cambodia Brunei

Darussalam

Laos

US

$ m

illi

on

Export (Value) in 2015

Indonesia

41%

Philippines

17%

Thailand

15%

Malaysia

8%

Viet Nam

5%

Singapore

5%

Myanmar

5% Cambodia

0%

Brunei

Darussalam

0% Laos

4%

Export (value)

Export (Value)of Myanmar Fishery Products to ASEAN

countries

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Brunei

Darussalam 1453 2471 0 3 55 10 540 343 90

Cambodia 5 0 0 0 0 0 0 0 0 0 0

Indonesia 897 469 1507 2245 1559 1800 974 186 103 888 1503

Malaysia 26487 30892 29570 29622 31600 35167 39595 38529 38183 35679 34117 37034

Philippines 35 82 7 0 26 15 20 19 0 0 27 88

Singapore 20059 21610 17818 17034 14478 13277 11594 11956 7458 7619 5969

Laos 0 0 0 0 0 0 0 0 0 0 0 0

Thailand 55979 54375 46197 73886 72172 65823 61490 45913 32159 26186 20785 81942

Viet Nam 4632 1369 1224 1740 6482 3378 4380 6121 4809 5002 1780

ASEAN

Aggregation 109547 111268 96323 124527 126317 119463 118108 102734 83252 75717 64271 119064

Total 245851 261124 255449 306307 299950 303065 313516 349373 359429 431987 315072 257001

Source: http://www.trademap.org/tradestat/Country_SelProductCountry_TS.aspx

Brunei Darussalam 0%

Cambodia 0% Indonesia

1%

Malaysia 33%

Philippines 0%

Singapore 13%

Laos 0%

Thailand 49%

Viet Nam 4%

Share of Export to ASEAN countries

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 2 3 4 5 6 7 8 9 10 11

Myanmar Fishery Export to ASEAN countries

Viet Nam

Thailand

Laos

Singapore

Philippines

Malaysia

Indonesia

Cambodia

Brunei Darussalam

Myanmar Fishery Export to ASEAN countries

Source : Data from trademap ,http://www.trademap.org/tradestat/Country_SelProductCountry_TS.aspx

Years

Myanmar-Export to World (with HS code)

Product

code Product label

Myanmar's exports (value) to world

2010 2011 2012 2013 2014 2015

'0306 Crustaceans, whether in shell or not, live, fresh, chilled, frozen,

dried, salted or in brine, ... 502896 715816 782573 869589 1224474 999064

'0304 Fish fillets and other fish meat, whether or not minced, fresh,

chilled or frozen 260160 335202 380064 397718 483432 536833

'0305 Fish, fit for human consumption, dried, salted or in brine;

smoked fish, fit for human consumption, ... 110420 109384 127313 117404 110071 116511

'0307 Molluscs, fit for human consumption, even smoked, whether in

shell or not, live, fresh, chilled, ... 351566 458782 439053 566625 600502 614155

'0302 Fish, fresh or chilled (excluding fish fillets and other fish meat of

heading 0304) 373046 408042 418385 441130 447351 426337

'0308 Aquatic invertebrates other than crustaceans and molluscs, live,

fresh, chilled, frozen, dried, ... 29497 35574 41246 43265

'0303 Frozen fish (excluding fish fillets and other fish meat of heading

0304) 2460811 3130093 3409749 3315871 2848009 2690643

'0301 Live fish 79074 79089 81399 67957 64969 57907

Source :ITC calculations based on UN COMTRADE statistics.

'0306 16%

'0304 7%

'0305 2%

'0307 9%

'0302 8%

'0308 1%

'0303 56%

'0301 1%

Average export share

ASEAN countries: Import in 2015

845

317.4

246.6

193.4

33.1 29.2 16 4.8 1.5 1 0

100

200

300

400

500

600

700

800

900

Viet Nam Singapore Malaysia Thailand Philippines Indonesia Brunei

Darussalam

Myanmar Laos Cambodia

US

$ i

n m

illi

on

Import (value) in 2015

Viet Nam

50%

Singapore

19%

Malaysia

15%

Thailand

11%

Philippines

2%

Indonesia

2%

Brunei

Darussalam

1% Myanmar

0% Laos

0% Cambodia

0%

Import (value)

Product

Code Product label

Imported

value in

2011

Imported

value in

2012

Imported

value in

2013

Imported

value in

2014

Imported

value in

2015

'0306 Crustaceans, whether in shell or not, live, fresh, chilled,

frozen, dried, salted or in brine, ... 804 887 636 2125 3189

'0303 Frozen fish (excluding fish fillets and other fish meat of

heading 0304) 1015 730 1179 1464 2536

'0304 Fish fillets and other fish meat, whether or not minced, fresh,

chilled or frozen 96 835 1498 1371 2536

'0302 Fish, fresh or chilled (excluding fish fillets and other fish

meat of heading 0304) 11 149 26 662 1014

'0307 Molluscs, fit for human consumption, even smoked, whether

in shell or not, live, fresh, chilled, ... 133 282 723 983 369

'0305 Fish, fit for human consumption, dried, salted or in brine;

smoked fish, fit for human consumption, ... 20 14 14 81 205

'0301 Live fish 17 30 39 43 60

'0308 Aquatic invertebrates other than crustaceans and molluscs,

live, fresh, chilled, frozen, dried, ... 0 13 2 4 0

Myanmar-Import from World (with HS code)

Source :ITC calculations based on UN COMTRADE statistics.

'0306

30%

'0303

27%

'0304

24%

'0302

7%

'0307

10%

'0305

1%

'0301

1%

'0308

0%

Average Import Share

MRA Mutual Recognition Agreement/arrangement

• Article 19 of AEC calls upon harmonize standard,regulations and conformity assessment procedures using international practices such as …(Asean,2016)

• Chapter 7 of ATIGA requires AMS to harmonize their standard with international standard for removing unnecessary barriers (ATIGA)

• Principle 6 of ASEAN food safety policy (2016) encourages that AMS should establish MRAs and equivalence arrangements with other AMS for facilitation economic integration(ASEAN,2016)

• MRA – a voluntary agreement between government conformity assessment bodies. It simply means 2 or more parties mutually accept each other’s rule

• 2 Types of MRAs from the point of view of import country (Pongsapitch, 2011)

– Type 1 – equivalence of both standard and inspection/certification while accepting export countries’ certificate/certificate mark

– Type 2 _ different standard but equivalence of inspection /certification system while accepting export countries’ certificate based on the import country’s standard

• Type 2 is the MRA made between EU and other 3rd /export countries including Myanmar (e.g.(developed and developing)countries having different standards)

Source: Better training for safer foods BTSF held in Italy (Andersen,2012)

How EU and Export Countries Mutually Arrange [Type1/2]

Vertical Integration of Food Control System [Export-CA]

• Vertical integration is a strategy used to gain control over its suppliers or distributors, increase power in marketplace, reduce transaction costs and secure supplies or distribution channels (Jurevicius, 2013)

• Vertical integration controls products supply chain from one end to another (Stephen G. Newman,2009)

• Myanmar-MCA and EU-CA are mutually recognized. MCA is delegated and gets all necessary power in controlling supply chain on behalf of EU-CA

• Myanmar fishery sector is at the second stage of Vertical Integration

21

Stage 1

Stage 2

Stage 3 Stage 3. Food Chain Approach + Continuous

Monitoring+ Information Asymmetry Reduction+

Transparency

- Effective utilization of Food control system by using

RAPID ALERT SYSTEM regionally, Internationally

(RASFF of EU, ASEAN Rapid Alert System , etc.)

- USA has its own USA-FDA Alert too

Stage 2 Food Chain Approach + Continuous

Monitoring + Information Asymmetry Reduction

- CA starts its function by mutual recognitions with

other countries’ CA at G-G , but effectiveness is still

the ongoing process USA , Japan don’t follow this

mutual recognition step but practices TQM system in

domestic food industry by adoption of HACCP and

import countries require to do so

Stage1 Not with food chain approach

- No Competent authority CA for specific food sector

and checking made just before export,due to the

willing buyers’ demand but with the low price

Source: Author

Figure:Vertical integration at government level

Integration for fulfilling requirements of MRAs in Markets

Import

Country/

Markets

2nd stage of Vertical integration

3rd stage of

Vertical

Integration

Number of Myanmar

fishery factory approved by

import country’s CA in

2016 (2015) Harmonization Verification Visit

Mutual

Recognition

between CAs

Alert system

Web-sites

1 EU Required Required Required RASFF 18 (20)

2 Japan Not

necessary

Not

necessary

Not

necessary - *

3 USA Not

necessary

Not

necessary

Not

necessary US-FDA

[exporters/factory can

apply directly to US-

FDA]

4 China Required Required Required CNCA-

AQSIQ 76 (78)

5 Vietnam Required Not yet Required NAFIQAD 31 (24)

6 ASEAN at preparation

stage Not yet Not yet

ARASFF

(ASEAN

alert)

*

7 GCC

countries

Not

necessary

Not

necessary

Not

necessary - *

Source: Author

Approved (by EU-MRAs) Establishments in Region

China Vietnam India ThailandIndonesi

aTaiwan Japan

Philippin

es

Banglad

eshMalaysia

Myanma

r

Singapor

eBrunei

Cambodi

aLaos

Total (establishments) 1026 486 390 230 212 204 151 138 67 22 18 5 2 0 0

PP for Aquaculture 297 415 275 137 105 13 6 13 67 13 0 0 2 0 0

PP for Wild Caught 753 71 57 81 98 22 36 116 0 9 18 5 0 0 0

ZV Freezing Vessels 305 0 0 0 9 169 103 34 0 0 0 0 0 0 0

CS Cold Store 16 0 58 0 0 0 6 4 0 0 0 0 0 0 0

RV Refeer Vessel 0 0 0 12 0 0 0 0 0 0 0 0 0 0 0

FV Factory Vessel 17 0 0 0 0 0 0 0 0 0 0 0 0 0 0

0

200

400

600

800

1000

1200

Qu

an

tity

Approved Fishery Establishments List of Regional Countries

Brunei

0%

Cambodia

0%

Indonesia

19%

Malaysia

2%

Myanmar

2%

Philippines

12%

Singapore

0% Laos

0%

Thailand

21%

Vietnam

44%

Share of Approved Establishment [in ASEAN countries]

Source:Data from europa -https://webgate.ec.europa.eu/sanco/traces/output/noneulistsPerActivityen.htm#

Export [Value (million US $) ]to major import countries

1997-1998 1998-1999 1999-

2000 2000-2001

2001-

2002

2002-

2003 2003-2004

2004-

2005 2005-2006 2006-2007

2007-

2008

2008-

2009

2009-

2010

China 14.37 56.33 54.53 66.79 86.7 128.58 18.98 124.77 105.84 130.66 148.72 106.15 105.08

Thailand 41.32 31.19 15.27 22.67 40.6 25.42 8.778 29.84 61.74 109.88 55.985 76.978 99.229

Singapore 45.01 40.49 32.41 27.03 16.86 22.83 8.406 10.64 17.25 30.434 70.363 119.04 96.257

Malaysia 6.41 5.69 10.2 14.72 13.57 27.13 33.568 45.93 20.54 21.103 86.96 41.26 36.127

Japan 17.62 21.13 20.48 24.1 23.32 30.89 15.947 44.36 46.03 50.447 42.085 23.4 16.908

Kuwait 0 0 0 0 0 0 0 0 0 14.427 30.026 31.844 52.964

Hongkong 24.53 18.98 16.97 20.5 16.91 14.47 17.732 14.3 16.78 13.967 12.664 0 0

Bangladesh 0 0 0 3.72 7.33 10.62 0 11.98 14.55 22.36 27.003 18.686 16.257

Saudi Arabia 0 0 0 0 0 0 0 16.83 17 20.126 35.146 21.344 23.272

UAE 0 0 2.95 0 4.55 5.26 5.371 9.73 20.76 17.528 13.902 13.872 16.784

USA 1.65 0 7.38 12.89 16.06 17.67 12.634 0 0 0 0 0 0

U.K 2.66 5.94 4.74 5.52 6.98 8.49 6.678 6.83 8.38 0 0 10.674 12.427

Australia 4.3 4 4.56 6.35 0 0 0 0 0 0 0 0 0

Vietnam 0 0 0 0 0 0 7.951 0 0 0 0 0 0

Source: Data from department of Fishery

Conclusion

• non-implementers did not have specific barrier if they want to integrate for EU markets (as barriers for non-implementers were not statistically significant)

• Non-implementers’ export was mainly regional rather than global so far, but they have lion share (86%)of fishery producers in Myanmar

• Type 2 MRA made between Myanmar and EU for fishery trade

• Share of approved establishments(Myanmar) is only 2% among ASMs, as development is still infancy

Thanks for your attention

Wai Yee Lin(Ph.D)

waiyeelin@gmail.com

Abstract

• This survey investigated barriers for non-implementers of EU standard HACCP system in fishery processing plants of Myanmar so as to examine what hindered them from taking part in global value chain. It was found that one fourth of respondents did not export to EU markets because of technical barrier.More than 90% did not have financial problem for integration of their production systems to be able to export to EU markets. Not more than one third saw the scale and scope of change as a barrier, if they needed integration for EU markets.Moreover,a positive strong correlation between the technical barrier and the scale and scope of change was found with r value 0.816,n=36,p=0.01.China was main market for one fifth of respondents and ASEAN member states and China were main markets for more than half of them. It can be concluded that fishery export of Myanmar so far was mostly regional rather than global and that is one of the reasons why the non-implementers did not integrate their production system to EU standard HACCP system in Myanmar.

• Jel Code: Q17,Q18