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Asean industry growth stunted by regulatory discord
Publication Date : 17-12-2013
Lack of regulatory harmonisation is “holding Asean back” and is suppressing the growth of industries in the 10-nation grouping, a representative of the region’s food and beverage sector said here yesterday.
Kim Leighton, chief scientific officer of the newly-formed Asean Food and Beverage Alliance (AFBA) noted that in the grouping’s efforts to become a single economic community, Asean has put in mechanisms to align itself to international norms, but gaps remained.
“While the adoption of some international standards has enabled Asean’s intra-Asean trade to grow in the priority sectors of integration, there are still many challenges due to differing national laws and regulations to regional commitments made, country-specific requirements (and) the lack of development in mutual recognition arrangements in areas where they are needed, including in the prepared food sector.”
He said that Asean’s food industry was relatively “young”, with a value of US$200 billion, much of which was concentrated in the developed markets of the region.
“Currently, the lack of regulatory harmonisation is holding us back and this is reflected in our reduced industry growth rates of just seven to nine per cent,” Leighton said.
For the Asean food and beverage sector to realise its potential to serve 650 million Asean citizens as well as export to India and China, he said that the regional market had to be open and promote innovation and fair competition. “Companies in Asean are being shackled by a multitude of costs because each country has its own unique rules for things like food labeling and product registration,” he said. “This is not a deliberate attempt to create trade barriers but it results in increased costs for companies and consumers, reduced trade, slower growth and overall loss of regional competitiveness.”
Realising that the road to harmonisation was “not easy”, Asean’s food industry has banded together and established the AFBA in April this year. “As an industry, we understand the perils of fragmentation and we want to leverage the support of all stakeholders to accelerate the harmonisation of national standards impacting on the food industry and remove the remaining barriers to trade,” Leighton said during Brunei’s inaugural observance of World Standards Day.
“Forging greater harmonisation in standards affecting the food industry is a high priority for Asean but it will involve all players across the region; from farmers to suppliers, manufacturers and retailers. It is so important because it ensures the application of a common set of standards to laboratory testing, safety standards, labeling, quality and certification that is achievable and acceptable everywhere, no matter the size of your business.”
In this regard, the AFBA official said that the region’s food industry stood ready to serve more than just as a feedback mechanism for Asean, but rather as a partner and stakeholder to the Asean Economic Community. The AFBA itself brought together the food and beverage associations found across Asean and represented a sector that employed more than four million people and over 300,000 companies that were mostly SMEs. “By understanding the priorities of all of these businesses, AFBA is able to contribute to the ongoing integration process in Asean. It provides technical support to the Asean committees and serves as a single contact point for the food industry with the relevant ministers,” he explained.
“We are aware there will be challenges ahead, but regulations harmonised to international standards can be achieved through the development of a shared vision and active collaboration between the Asean governments and the private sector.”