Where are the products from the Amazon?
In the streets of Lima you can buy lucuma ice cream. In Rio you can have pancakes with asai. Why in the age of globalization is it hard to find these Amazonian ingrediants in major US and European brands? One of the reasons is that there are US import regulations in place to protect consumers but which act as non-tariff barriers to trade. The EU's Novel Food Regulation acts in the same way.
Peru is one of the most biodiverse regions in the world as its land area includes the Amazon rainforest, the Andes and coastal plains. Plants collected from these different zones are worth hundreds of millions of dollars as "superfoods"(e.g. camu camu below) and ingredients for neutraceuticals and cosmetics.
An ITC-PROMPERU-GIZ webinar looks at the barriers to trade
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This week ITC's Trade and Environment programme in partnership with PROMPERU and GiZ held a breakfast webinar for exporters of biodiversity based products. ITC presented case studies on some of these hurdles and the major role Public Private Partnerships could play in reducing the costs and risks of arising from these barriers.
The presentations this Wednesday in Lima looked at some of the key hurdles that exporters to the US market face. These include how you label the product and the type of claims you make about the products - you can say "this ingredient helps maintain healthy skin" but not "this ingredient will help stop cancer". If the exporter gets the claim wrong, it could be rejected by the US authorities, leaving the exporter with a rejected consignment or fine. To help the smaller exporter get this right, ITC has prepared guidance on claims and labelling as well as an assessment of the North American market (download here).
After the presentation we discussed one of the main bottlenecks that
exporters are facing with natural products expert Josef Brinkmann. He
told us that exporters' capacity to scale up volumes to the US is partly
constrained by their lack of capacity and resources to undertake a key
US regulatory approval process and that a public agency could usefully
step in the help the exporters out.
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The benefits of collective action
To enter the US market, exporters have to show that the products in Generally Recognized as Safe (GRAS). Small buyers in the US will accept if this is done without formal recognition from US authorities. However big buyers will require this formal process. This means undertaking peer reviewed safety trials and having US Pharmacopeial prepare a monograph (a technical specification of the ingredient's properties). These are costs and technical processes that are beyond the reach of the average exporter. According to Josef, there is therefore a role for a public agency to undertake this work on behalf of a group of exporters. What would the outcome be if the government were to coordinate and fund this process? It would mean that Peruvian exporters could negotiate with the Unilevers of this world confident in the knowledge that they have overcome a key non tariff barrier to growing their business.
Also for more information on non tariff measures (NTMs) in Peru, see ITC's recent survey of exporters on NTMs.
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