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* Atleast Project Title is Required.
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Project No. |
SCSC 03 2023A
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Project Title |
Understanding the Trade Issues related to Halal Certification
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Project Status |
Completed Project
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Publication (if any) |
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Fund Account |
APEC Support Fund
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Sub-fund |
ASF: General Fund
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Project Year |
2023
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Project Session |
Session 1
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APEC Funding |
91,240
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Co-funding Amount |
0
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Total Project Value |
91,240
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Sponsoring Forum |
Sub-Committee on Standards and Conformance (SCSC)
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Topics |
Conformance; Standards
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Committee |
Committee on Trade and Investment (CTI)
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Other Fora Involved |
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Other Non-APEC Stakeholders Involved |
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Proposing Economy(ies) |
United States
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Co-Sponsoring Economies |
Australia; Chile; Indonesia; Malaysia; Philippines; Singapore; Chinese Taipei; Thailand; Viet Nam
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Expected Start Date |
01/06/2023
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Expected Completion Date |
31/12/2023
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Project Proponent Name 1 |
Kent C Shigetomi
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Job Title 1 |
Director
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Organization 1 |
Office of the US Trade Representative
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Postal Address 1 |
Not Applicable
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Telephone 1 |
(1-202) 3959459
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Fax 1 |
Not Applicable
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Email 1 |
[email protected]
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Project Proponent Name 2 |
Not Applicable
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Job Title 2 |
Not Applicable
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Organization 2 |
Not Applicable
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Postal Address 2 |
Not Applicable
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Telephone 2 |
Not Applicable
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Fax 2 |
Not Applicable
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Email 2 |
Not Applicable
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Declaration |
Kent Shigetomi
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Project Summary |
According to one estimate, approximately 11 percent of the population of APEC economies (325 million) are Muslim, and many of these people prefer or demand halal products. In addition, many companies within APEC export agricultural or manufactured products to majority-Muslim economies outside of APEC. Although there are international systems for recognizing what constitutes a halal product, some economies have developed their own systems. When these systems differ, it can be difficult or impossible to sell the same product in different economies. This workshop will seek to highlight the importance of trade to Muslim majority economies, especially those that have halal assurance schemes. The workshop will explore trade issues with halal products, balancing food regulations and food security, and seek to identify ways to maintain trade while respecting local regulations. International efforts related to standards development will also be discussed.
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Relevance |
Relevance - Issues: Economies use laws and regulations to ensure food and product safety and to communicate product information to consumers. Consumers rely on this information to make informed choices that align with their preferences. Manufacturers who wish to sell their products in a particular economy must conform to these requirements. However, when product requirements differ across economies, it becomes more difficult to develop products and packaging. Product ingredients may have to be adjusted to account for local requirements. Labels may have to be rewritten to convey information required by a local regulation. International standards can help with respect to food safety (e.g., Codex Alimentarius), but to date there is no internationally applied system related to halal labeling. Different economies have different requirements, which disrupts product distribution. Given the scope of food and non-food products that could be affected by halal regulations, the costs of conformance are significant. Muslims represent approximately 11 percent of the total population across all APEC economies, but distribution of populations remains varied across economies. Manufacturers and producers want to sell their products to as many consumers as possible, but they may be dissuaded when the costs of selling in a particular economy outweigh anticipated profit. Local regulations related to halal product production and labeling differ across economies. In some cases, regulations are economy-specific, so manufacturers and producers must tailor their product or labeling for a particular market. When producers and manufacturers opt out because of administrative burdens or financial costs, consumers in that economy are deprived of new, healthful, innovative, and less expensive products. The WTO Technical Barriers to Trade Agreement (TBT) can help economies strengthen regulatory quality and ensure compliance. For example, by publishing regulations in a draft form, stakeholders within and outside of that economy have an opportunity to review and provide comments. These comments can help smooth compliance with the regulation. Regulatory quality has a direct effect on trade. Research has shown that when standards-related measures are outdated, overly burdensome, discriminatory, or otherwise inappropriate, these measures can reduce competition, stifle innovation, and create unnecessary technical barriers to trade. Eligibility and Fund Priorities: This concept note seeks funding from the APEC Support Fund – General Fund. The project aims to improve implementation of the WTO TBT Agreement and regulatory quality in all economies—particularly developing economies. Developing Human Capital: Regulators will gain a better understanding of the trade consequences of their regulations. The project will boost regulators’ knowledge of and familiarity with the WTO TBT Agreement. This will contribute to higher quality technical regulations and greater consistency with international obligations. Integration into the Global Economy: WTO-inconsistent technical regulations have the ability to cut off economies from the rest of the economy by imposing requirements that other economies are unable to fulfill. This project seeks to reduce trade barriers and boost overall trade. Addressing Social Dimension of Globalization: Globalization is the process by which goods, services, knowledge, and ideas spread around the world. The convergence of economic promotes interaction and integration. In some cases, however, local social or religious factors may hinder globalization by creating barriers to trade. Responsible economic actors want to respect local priorities, but don’t want such compliance to be excessively burdensome. This project seeks to find ways to do that. Capacity Building: This project is intended to strengthen the ability of regulators in all economies—and particularly those in developing economies—to understand and adhere to the obligations in the TBT Agreement. In the 2020 RAASR survey, 12 economies identified aspects of regulatory improvement as a priority. By enhancing the ability of regulators to understand and apply the TBT Agreement, economies will be able to produce higher quality regulations that fulfil legitimate public policy objectives, while not creating unnecessary barriers to trade. The TBT Agreement contains rules that help ensure that standards-related measures serve legitimate objectives, are transparent, and do not create unnecessary obstacles to trade. If implementation can be improved, we should see fewer trade disputes and increased trade between economies. |
Objectives |
This project has three objectives. First, we seek to survey APEC economies to develop a comprehensive list of halal requirements and the products to which they apply. Second, we will convene a workshop that will brings together regulators, trade officials, international organizations and scholars to discuss the trade issues related to halal certification. A strong emphasis will be placed on finding ways to address certification issues in a way that does not restrict trade. Third, the product overseer will follow up with exporting economies to measure any changes over time.
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Alignment |
Alignment to APEC: Regulatory quality has deep roots within APEC. Section C.2 of the Osaka Action Agenda calls on economies to “ensur[e] the transparency of APEC economies' respective non-tariff measures.” APEC has long realized the important role of regulatory quality. The Putrajaya Vision 2040 calls for work to create a “transparent and predictable trade and investment environment” through “support for agreed upon rules of the WTO.” The Aotearoa Plan of Action includes commitments to “promote macro-economic policies…that promot[e] good regulatory practices and regulatory cooperation.” To pursue structural reform, economies have agreed to work in these two areas. Thailand’s priority to remain “open to all opportunities” envisions work to adapt and strengthen “domestic policies and institutions…, including economic and legal infrastructure, regulatory practices, as well as public sector and corporate governance.” Alignment to Forum: The SCSC is focused on reducing trade barriers that may arise because of technical regulations. And works to reduce non-tariff barriers to trade. These goals are outlined in the SCSC terms of reference, which notes that the objectives of the committee are to “endeavor to reduce technical barriers to trade and enhance market access through standards and conformance;” and “endeavor to align national standards with international standards…” |
TILF/ASF Justification |
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Beneficiaries and Outputs |
Outputs: 1) Pre-workshop Survey and Questionnaire The pre-workshop survey will ask economies about the measures they have related to halal certification, product labeling, and trade. With respect to halal certification, the questionnaire will ask for specificity related to products covered by domestic regulations and applicable legal background. Our experience indicates that not all economies regulate the same products. In addition, product labeling requirements differ between economies and the same product eligible for sale in one economy may not be accepted in a different economy. Finally, economies that export products to other economies with halal labeling requirements will be asked to identify problems related to product acceptance. 2) Workshop The main focus of the project is to organize and stage a one-day in-person workshop, possibly with remote participation option, in Seattle, Washington, United States on the margins of SCSC 3 (August 2023). We are planning to include four areas of focus: presentations on the policy implications of halal measures, presentations by economies on their schemes, perspectives by exporting economies on their perspective, and perspectives of manufacturers and producers. The aim of the workshop is for exporting economies to to understand local halal labeling requirements in importing economies and their effects on trade, and to help those economies with halal regulatory schemes to comply with WTO obligations. By covering the possible trade consequences of regulations, including trade disruption and disputes, we aim to facilitate regional trade. Speakers from economies that have halal labeling schemes would ideally represent those bodies. Those from exporting economies are best represented by government agencies that cover trade, export promotion, agriculture, or manufacturing. Industry representatives would ideally cover broad sectors, rather than individual products. However, the selection of industry speakers will be shaped by the halal regulations that economies have. 3) Project Summary Report An electronic report of minimum of 4 pages (excluding annexes) that will be available to all economies will be developed at the end of the workshop. It will contain the executive summary, information on the experts/speakers involved, key discussions based on experts/speakers’ materials/presentations and questions-and-answer session, key recommendations, conclusion and annexes which may include agenda, pre-event assessment/post-event evaluation results and other relevant information as appropriate. These materials will be e-mailed to participants and will be made available in the APEC website. It is not expected to be an official APEC publication. Recommendations for future work will be prepared as part of the report guided by the discussions/results of the workshop. The project overseer will also survey and compile feedback from participants, especially input related to possible areas for future capacity-building activities. Outcomes: 1) The key outcome of this project is the enhanced ability of regulators in APEC economies to understand and apply WTO TBT Agreement obligations, in order to promote transparency and improve regulatory quality. This will be measured by comparing WTO notifications related to halal regulations against the experience of trading partners. For example, if an economy develops a halal regulation and notifies it to the WTO, that would be considered a positive outcome. Similarly, halal-related measures will be compared against the obligations in the WTO TBT Agreement. For instance, a new measure that allowed a reasonable transition period would be deemed a successful outcome. Application of WTO TBT procedures can only occur if participants understand trade obligations. 2) This workshop will survey the state of halal regulations across APEC economies in order to identify areas for attention and possible collaboration. This will hopefully lead to greater international cooperation. The project overseers will examine data from APEC economies to economies that have halal regulations to determine if trade flows have been affected over time. The data will focus on those products covered by halal regulations in the country of importation. The project overseer will also monitor the work of the WTO TBT Committee to track specific-trade concerns related to halal issues. 3) Following the workshop, the project overseer will conduct a survey of participants to measure the effects of the workshop. The survey will seek to measure the extent to which regulators have improved their knowledge of the WTO TBT obligations related to technical regulations, their knowledge of WTO notification procedures, and the extent to which exporting economies have increased their knowledge of halal certification schemes. We will aim to generate at least 75 percent positive responses to these measurements. Beneficiaries: The root of many trade issues is the disconnect between regulators and stakeholders. Regulators are often inwardly focused; they seek to address a domestic issue or problem. Stakeholders must comply with the regulation in order to conduct business in that economy. Regulators are not always aware of problems that their regulations may create. Stakeholders, especially those who have experience in multiple markets, should be able to review draft measures before they take effect, or to provide comments about how the measure is affecting their activities. The target participants for this project will primarily be halal regulators and producers of products that must be certified as halal. The latter group may include agricultural producers, food processors, and manufacturers, since all these sectors are affected by halal requirements. Representatives of international halal certifying organizations and scholars who have researched the issue will also be invited to participate. Women will actively participate in the planning, management, allocation of resources, and implementation of the project and will play key roles in planning the conference. The project overseer will actively encourage the participation of women in the conference, including as presenters at the conference. The project seeks to have women represent at least 50 percent of the workshop participants and speakers. 1) Regulators: This workshop is intended to enhance regulators’ understanding of the trade impacts of domestic halal regulations. Officials from government agencies should have a basic understanding of the rulemaking procedures in their economy and an understanding of the WTO Technical Barriers to Trade (TBT) Agreement. Ideally, they should have line or supervisory responsibility for the development or implementation of regulations in their economy. 2) Private Sector and Civil Society: Sound standards-related measures should be developed through a process that provides for meaningful consultation with the public. As a result, representatives of organizations that regularly review and provide comments to draft measures are also ideal participants. In addition, representatives of organizations that represent SMEs or women-owned businesses would also provide a different perspective. Specifically, the project overseer will consult with advisory committees that provide input on trade-related issues to the U.S. government (see “Gender,” below). The project overseer will consult with the American National Standards Institute (ANSI), which has deep experience in identifying and incorporating the views of small and medium-sized organizations. 3) Scholars and Representatives of International Organizations: Certain international organizations are engaged in the development of international halal standards (e.g., World Halal Food Council, World Halal Council, . As a result, they have knowledge of the practices in multiple economies. Similarly, scholars who follow halal-related trade issues will also be familiar with the situation in several economies, as well as the international work related to trade disputes. |
Dissemination |
1) The number, form and content of any publications: The results of the workshop will be captured into a written document (the Project Summary Report) that can be stored electronically on the APEC Project Database and/or the Meeting Documents Database for members’ reference. The electronic publication will include the workshop agenda, presentations, curricula vitae of speakers and a summary report of the workshop. This information will be accessible to the public following the workshop to ensure that only updated information is reflected therein. 2) Channels of dissemination: Only the APEC Project Database / Meeting Documents Database will be used to share workshop results. We will also provide a presentation to the SCSC on the workshop at SOM 1/SCSC 1 in 2024. 3) The target audience: The target audience would include government regulators, organizations that develop standards or conformity assessment procedures, and representatives of trade associations. 4) Any intention to sell outputs arising from this project: There is no intention to sell the outputs arising from this project. Member economies will be encouraged to disseminate results of the workshop with their respective agencies and business communities through their websites. |
Gender |
As the project planning moves forward, the project overseer will take steps to include women as speakers and APEC-funded participants. In the latter case, the project overseer’s influence is lessened because economies are ultimately responsible for selecting participants. With respect to impact of halal-related measures, women may be more significantly affected than men. Women tend to use cosmetic products more than men, and some economies may develop halal-related measures for cosmetics. The project overseer will work to include women as speakers and discussions on issues where women may be more significantly affected. The team of officials in the United States that is overseeing the project include both male and female officials. The proposing economy leads are facilitated by both genders according to the Guide on Gender Criteria for APEC Project Proposals of the Guidebook on APEC Projects. The project overseer will consult closely with the advisory committees who provide input on trade issues to the U.S. Government, including the Industry Trade Advisory Committees, groups of private sector representatives who will also be able to provide a range of views, including the views of women-owned businesses. The project overseer will consult with other economies to identify similar groups that can provide input. PO is committed to collecting sex disaggregated data for all speakers and participants (not only those funded by APEC) at the project event. This data will be included when submitting a Completion Report to the Secretariat upon completion of the project, as well as providing guidance to future POs on their own gender parity targets. | Targets | | Female Participants (%) | 50 percent | | Female Speakers/Experts (%) | 50 percent | Referring to the Guide on Gender Criteria for APEC Project Proposals in the Guidebook on APEC Projects, please tick the pillar or pillars that this project supports, in promoting women’s economic empowerment: | | 5 Pillars (you may tick more than one) | | 1 | Access to Capital and Assets | | | 2 | Access to Markets | X | | 3 | Skills, Capacity Building, and Health | X | | 4 | Leadership, Voice and Agency | | | 5 | Innovation and Technology | X | |
Work Plan |
| Timeline | Tasks | Deliverables | | June 2023 | Anticipated notification by PMU that the project proposal has been approved. | Formal work may begin | | June - July 2023 | Circulate the Pre-workshop Questionnaire through the Subcommittee on Standards and Conformance (SCSC) to share information on the project timeline and to seek responses on priority areas of interest. Assemble U.S. project implementation team and assign specific tasks (e.g., logistics, data analysis, participant identification). Development of General Information Circular, including agenda and nomination form as annexes for circulation to SCSC members. | Pre-workshop Questionnaire results that would include indications of interest from economies on areas to focus on | | July 2023 | Begin reaching out to potential speakers. Once the date of SOM 3 and the workshop have been set, notify travel eligible economies and ask for nominations for participants. Finalize agenda and speaker lists. Approve travel plans for delegates from travel eligible economies. | Draft agenda and speaker list. Finalize participant list and speakers. | | August 2023 | Conduct pre-event assessment and collect the responses Hold workshop at SOM 3. After the event, circulate post-event evaluation. Provide in-person report at SCSC2/SOM3. | Project Workshop | | October 2023 | Submit APEC Project Monitoring Report to the APEC Secretariat | APEC Project Monitoring Report | | | December 2023 | Compile workshop notes into a report | Project Summary Report | | February 2024 | Submit APEC Project Completion Report and the Supporting Documents to APEC Secretariat | APEC Project Completion Report | | | 6-12 months after the project implementation | Participate in the Longer-Term Evaluation of APEC Projects (LTEAP) Survey conducted by the APEC Secretariat Following the workshop, the project overseer will conduct a survey of participants to measure the extent to which regulators have improved their knowledge of the WTO TBT obligations related to technical regulations, their knowledge of WTO notification procedures, and the extent to which exporting economies have increased their knowledge of halal certification schemes. | Long-Term Evaluation of the APEC Projects Survey Follow-up online survey. | | |
Risks |
| No. | Risks | How will it be managed? | | 1 | When the project is approved, there will be only approximately 10 weeks between notification and SOM 3. This may make the planning process, including booking room space and arranging for speaker and participant travel more difficult. | The project overseer has already begun drafting the General Information Circular (GIC). The project overseer is in close contact with the State Department administrative team to ensure that the project is properly integrated into the SOM 3 schedule. | | 2 | Although we do not know of any international meetings related to halal issues, the dates for the workshop may conflict with outside events. This could affect availability of speakers and participants. | This risk is difficult to manage, since the dates for APEC and other organizations’ meetings are developed separately. | | 3 | The United States requires diplomatic visas for government officials of other economies. These officials cannot enter the United States on their tourist passports. It takes time to process diplomatic visa applications. | When the project overseer sends out a request for nominations from travel eligible economies, he will note the visa requirement and the need for prompt responses. The same will apply for workshop speakers. | |
Monitoring and Evaluation |
| | Evaluation Focus | Indicators | Target Goals | Evaluation Method | Reporting Method | | Outputs | 1. Pre-workshop Survey and Questionnaire | No. of survey responses received | 50 percent response rate from all economies, but 66 percent response rate from those economies we know have halal regulator schemes (3). | Certification of POs | Completion Report | | No. of areas of interest identified | 2 additional issues(We are aware of the general areas of interest, but we expect that survey responses will reveal issues we have not contemplated. We expect one or two additional issues.) | Analysis of Survey Response | Completion Report | | | | | Number of responding economies | 66 percent from those economies with a halal certification scheme, 50 percent from others | Certification of POs | Completion Report | | 2. Workshop (SOM 3, 2023) | 1. No. of participants (excl. speakers/ experts) | 50 | Event Attendance List | Completion Report | | 2. % of participating men/women (excl. speakers/experts) | 50/50 | Event Attendance List | Completion Report | | 3. No. of speakers/
experts engaged | 8 | Event Attendance List | Completion Report | | 4. % of speakers/
experts (men/women) | 50/50 | Event Attendance List | Completion Report | | 5. No. of attending economies | 14 | Event Attendance List | Completion Report | | 6. No. of travel eligible economies | 11 | Event Attendance List | Completion Report | | | | | | | 3. Project Summary Report | 1. No. of pages | 4 | Certification by PO | Email to the Secretariat | | 2. Submission to the Secretariat | 31 Dec 2023 | Submission to the Secretariat | Email to the Secretariat | | Outcomes | Increased understanding of WTO issues related to Halal certification schemes, their operation, and their effect on trade | 1. % of participants who report an increased understanding of WTO issues related to Halal certification schemes | 66 percent from those economies with a halal certification scheme, 50 percent from others | Survey of participants immediately following the workshop | Completion Report | | | Enhanced Ability of Regulators | 2. % of participants reporting substantial knowledge increase | 66 percent from those economies with a halal certification scheme, 50 percent from others | post-Workshop questionnaire | PowerPoint Report to SCSC Completion Report | | | Increased international cooperation in halal certification | 3. % of participants reporting plans to increase international cooperation | 66 percent from those economies with a halal certification scheme, 50 percent from others | 6-month post-event evaluation | PowerPoint Report to SCSC | | Others | | | | | | |
Linkages |
The breadth of products that could be affected by halal-related measures is broad. Food, cosmetic, and healthcare products could all be covered by labeling requirements. In addition, scope and labeling requirements may vary between markets. We know of no prior or current work within APEC on halal certification issues, but this project may be of interest to participants in other APEC groups such as the Food Safety Cooperation Forum (FSCF), Policy Partnership for Food Security (PPFS), and the Market Access Group. The implementation team will notify other groups of the workshop to encourage participation. Although there has been international work related to halal labeling, implementation varies across economies. We will reach out to relevant international organizations to collect the latest information. We will also consult with scholars who have studied the trade issues related to halal certification. |
Sustainability |
The project will have the most impact in economies that are contemplating halal labeling requirements, or those who are in the process of developing or implementing such requirements. There is often a lack of coordination between halal regulators and trade officials. Halal regulators are internally focused on their domestic markets, while trade officials interact with foreign stakeholders and traders. Halal regulators may not be aware of their trade obligations, which could lead to practices that do not reflect the views of all perspectives. The workshop aims to educate regulators about their international trade obligations and to encourage them to consider the comments of foreign stakeholders. In addition, regulators will be given an opportunity to explain their regulatory goals and public policy objectives. Majority-Muslin economies within APEC have already established halal certification schemes. We do not expect new schemes to be created. Changes to existing programs are more likely. Thus the project overseer will monitor halal issues after the workshop completion in order to determine the extent to which economies have applied any project recommendations. Following the conclusion of the workshop, we will monitor WTO TBT notifications to determine if participating economies notify any changes to their schemes. However, in the absence of such notifications, we will have to rely on information from exporters and other industry representatives. We will also follow up with exporting economies to determine if they have identified any changes to the existing halal certification schemes that affect exports. |
Project Overseers |
Kent Shigetomi, an official within the Office of the U.S. Trade Representative, will serve as the project overseer. He is currently the chair of the APEC Subcommittee on Standards and Conformance (SCSC) and has represented the United States in this committee since 2015. Mr. Shigetomi has served as the sole or joint project overseer on six APEC projects, the most recent of which was held in February 2023. |
Cost Efficiency |
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Drawdown Timetable |
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Direct Labour |
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Waivers |
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Are there any supporting document attached? |
No
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Attachments
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