|Poor flow of information hurts Lebanese exporters
|A lack of information on global trade standards and international market trends is preventing many Lebanese small- and medium-sized enterprises (SMEs) from exporting products, according to a report to be released next month by UNESCWA.
Based on an assessment of access to standards information and SME competitiveness in Lebanon, the study concludes that technical barriers to trade, including food safety and sanitary regulations, have contributed to the diversion of trade away from heavily regulated markets.
Most of Lebanon's SMEs - approximately 90 percent of Lebanese companies employ fewer than five people - are unaware of country-specific and international standards, the report says, while the cost of accessing information, let alone compliance, remains high.
Mechanisms for standardization are needed at both national and regional levels to increase the global market share of Arab, and specifically Lebanese, exports, said Carol Chouchani Cherfane, a UN economic affairs officer.
"It costs a lot for SMEs to comply with these standards," Cherfane explained.
"The question for most of them is, if I adopt new standards will I go out of business? The answer is usually no, your productivity might drop 10 or 15 percent at first, but there are long-term efficiency gains."
Fewer Lebanese shipments are penetrating traditional markets like the European Union and United States because of non-compliance with safety and quality standards.
In the last five years Lebanese trade with the US has dropped by half, and between December 2005 and November 2006, 43 out of 46 shipments to the US were rejected by the Food and Drug Administration for mislabeling or misbranding, says the report.
Regulations governing health, safety, and environmental impact continue to increase in the EU - tripling from an average of 20 new standards per year in the 1980s to about 60 per year in the 1990s, according to the study.
Cherfane says China has about 13,000 regulations, but the study identifies it as one of the biggest potential markets for Lebanese exports in the future.
"First [SMEs] need to know how much pesticide residue can there be on a tomato for it to be sold internationally,'" she said. "The next step is learning how to adapt modes of production so they can trade.
"If you wait a week to pick tomato then a smaller quantity of pesticides lingers and the tomato is acceptable. You make sure that your tomato does not affect the chain of production for ketchup."
Though Libnor, the official standards authority in Lebanon, is doing its best to streamline statistics produced by dozens of government agencies and economic associations, with only 13 employees the authority lacks the institutional capacity to formulate and disseminate information to the private sector.
Libnor is currently working on imposing a system of voluntary standardization, which could eventually be adopted as a decree. But Libnor lacks the authority to spearhead widespread standardization.
For the time being, non-state actors - such as Qualeb, which offers sector-specific compliance workshops - have taken responsibility for most standardization initiatives. ESCWA launched a zaatar production pilot project in the southern villages of Bint Jbeil and Debel to create a set of requirements for local producers to adhere to, so ultimately the spice can be traded globally.
No standards for zaatar exist in Western markets, however, said Cherfane.
The Daily Star