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Food Regulation and Trade: Toward a Safe and Open Global Food System

Food Regulation and Trade: Toward a Safe and Open Global Food System

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The discovery of a single animal with "mad cow" disease in a herd in the state of Washington in December 2003 put US beef exports to two dozen countries on hold, despite assurances that the US food supply remained safe. Guarding the safety of a nation's food supply, ensuring quality, and providing information to consumers so that they can make informed choices are widely accepted as universal obligations of governments. But differences in the way that governments fulfill these obligations can lead to trade conflicts. The potential for such conflicts increases as more affluent and safety-conscious consumers demand additional regulations in national food systems. Governments should handle these conflicts in a way that both upholds food safety standards—and public confidence in them—and preserves the framework for trade and the benefits of an open food system.

Food Regulation and Trade: Toward a Safe and Open Global System, published by the Institute for International Economics, examines the current state of regulation of the increasingly global food system, analyzes the underlying causes of the trade conflicts (both those that are currently evident and those that are waiting in the wings), and outlines the steps that could be taken to ensure that food safety and open trade become at least compatible and at best mutually supporting.

From their broad analysis and interwoven case studies, Josling, Roberts, and Orden conclude that there is ample room for improving the performance of regulatory authorities in providing safe food and preventing the spread of animal and plant disease. International institutions can play a vital role in coordinating these efforts among developed and developing countries and in reducing uncertainty. By contrast, the role of governments in the regulation of quality should in most cases be limited to the prevention of misleading claims, and international rules should be focused on reducing transaction costs rather than imposing uniform measures across disparate markets.