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Trade Rejection Analysis

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Border rejections in major global markets

Trade Rejection Analysis

Information on the border rejections in major global markets, for different products from different exporting countries, in order to help exporting countries to focus and navigate their efforts in improving compliance capacity of their industries and thereby reduce the negative impacts arising from border rejection.

Information on trade rejection is a useful input to support the policy process, as well as technical-cooperation, to navigate and focus efforts in addressing compliance issues in a more effective and efficient manner. In other words, it is expected that better information on rejection contributes to better preparedness of exporting countries to comply with export market requirements and eventually less rejection in the long term. As a result, the economic losses due to rejection would be avoided while reputational risks due to large scale rejections can be averted.

WHAT

Technical regulations and standards are increasingly prevalent and are continuously evolving in international trade of food and non-food (industrial) products. Moreover, there is evidence that many developing countries face challenges in complying with the safety and/or quality requirements that these regulations and standards lay down. In their efforts to improve compliance, the challenge for national governments and donors is to allocate scarce financial and technical resources amongst a plethora of capacity building needs. There is, therefore, a need to identify where the most acute compliance challenges are faced—in a trade context this means identifying the products and markets with the highest rates of non-compliance—thus recording rejections.

WHY

Based on UNIDO’s work in this area, the following problems have been identified in relation to the availability, comparability and utility of rejection data, as well as the current form in which they are analyzed and presented:

  • scattered data on rejection as a result of national and regional markets having their own technical regulation and standards against which imported goods are inspected
  • the current rejection analysis does not capture the emerging markets
  • analysis of the rejection and its implications at regional level is not possible
  • rejection data is not always readily available
  • limited possibility to use the existing data in a meaningful way as long as they are not harmonized because rejection rates are reported in different units and rejection reasons are not provided in a standard way
  • export losses due to rejection of non-food goods are unknown
  • rejection data in isolation provides rather limited information on the compliance challenges
  • limited in terms of type of output and not customizable to provide specific intelligence needed by interested parties

HOW

In order to address the key shortcomings previously identified, the Rejection Analysis tool can be used to facilitate the use of rejection data to identify the key compliance challenges faced by exporting countries and thereby enhance targeting of investments in building relevant compliance capacities.

In addition, the Rejection Analysis tool supports the assessment of the overall impact of rejection on export performance of countries of origin and estimates their compliance capacity by interpreting rejection trends together with additional key development, production and trade-related indicators. Lastly, the tool expands existing data by including rejection data on non-food products and by including rejection data from emerging export markets. The latter will in turn provide an analysis of intra-regional trade standard compliance possible.