Strengthening the Compliance of the OIC Member States
to International Standards
19
Developing a productive base for agriculture that relies on international standards can therefore help
farmers and food processors break into international markets—a particularly important point for many
developing countries, given that agriculture accounts for a substantial share of GDP and employment. In
addition, GVC activity is increasing from a low base in the agricultural sector, in particular for “new”
agricultural exports like cut flowers and horticultural goods. In such cases, exporters in developing
countries need to meet the standards of retailers and distributors in developed country markets. These
standards are typically voluntary, but are in some cases based on international standards—an
additional rationale for developing international standards capacity.
One example of building up competitiveness through leveraging international standards is African
horticultural exports to the EU, particularly the UK (Guasch et al., 2007). In the 1990s, the supermarket
industry in the UK underwent a major restructuring, with the net effect that direct relationships started
to develop between producers and supermarket chains. This was the beginning of buyer-driven GVCs in
the sector. The dynamics of the development meant that supermarket chains were in a position to
impose requirements as to quality and presentation on their suppliers. Meeting these standards—at
their simplest, international requirements relating to safety, but extending much further than that—
became crucial for developing countries in Africa that wanted to export horticultural products to the UK.
Although this development clearly posed challenges for African producers, it also provided them with
the opportunity to upgrade production to higher quality levels that are reflected in higher prices. At the
same time, the new relationship with supermarkets has led to innovation in the value chain, with some
African countries now increasingly performing simple, labor-intensive processing tasks in addition to
provision of the primary commodity. More recently, these activities have come to include the
preparation of ready to eat foods, which requires adherence to high standards of hygiene. Kenya is one
of the key actors in this new arrangement: between 1992 and 2013, exports of vegetables increased by
over 550% in value terms (based on WITS-Comtrade data). There is scope for OIC countries to mimic
this success by developing their own standards system, including by reference to international norms,
so as to boost export competitiveness.
Together with the need to ensure WTO consistency and avoid possibly costly disputes, the export
competitiveness rationale provides a strong reason for OIC member states to be interested in the
development and implementation of international standards. The point is particularly salient for
developing countries, where quality infrastructure can sometimes be partial or rudimentary. Even
though tariffs in the major developed markets are at historical lows, developing country exporters
increasingly need to be able to meet standards in those markets as a condition of achieving real access.
The issue is salient in agricultural and manufacturing sectors, including even labor intensive sectors like
apparel and clothing. If developing country manufacturers cannot meet foreign standards, they are