Implications of non-compliance with technical non-tariff measures: the case of chilean food related export refusals at the United States border

Abstract

The requirements for food quality and safety for imports are rising and this is reflected in an increasing number of technical NTMs. In extreme cases, non-compliance leads to the refusal of shipments at the border, representing a loss of both the revenue expected from the sale of the goods and the costs of their transportation. The objective of this chapter is to analyse the implications of non-compliance with technical NTMs by assessing cases of export refusals. For this, we focus on the case of Chilean exports of fruit and vegetables to the United States of America (US). Data on fruit and vegetables shipped from Chile to the US between January 2002 and December 2015 were examined, with cases of refusals of specific products and the reasons invokedin such refusals being recorded. The information was extracted from the US’s Food and Drug Administration’s Operational and Administrative System for Import Support. To evaluate the importance of refusals of this nature, we first related Latin American countries’ share of shipments refused by the US to their share of all fruit and vegetable exports to the US. We also assessed the economic value of refused exports from Chile. To contextualize the results, details of the composition and operation of the Chilean and US food quality and safety control systems are given. Additionally, comparisons are drawn between the situation in Chile and that in other Latin American exporters with regard to the relevant public policies. This analysis shows that Chile has the lowest level of refusals in the region, representing a negligible economic value. This suggests that its public policy on quality and safety, which is based on a system that promotes collaboration among agencies, might be a key reason for the good performance.