Lao People's Democratic Republic : CAM/LAO: Trade Facilitation: Improved Sanitary and Phytosanitary (SPS) Handling in Greater Mekong Subregion Trade Project

Agriculture, natural resources and rural development / Agricultural production - Agro-industry, marketing, and trade - Livestock

Education / Tertiary

Industry and trade / Trade and services

The GMS regional cooperation strategy and program focuses on connectivity and competitiveness. While recent investments in physical infrastructure have created new opportunities for trade, GMS governments increasingly realize that weak legal, institutional, and administrative capacities hinder the optimal use of infrastructure and are insufficient to address trade-related health hazards. A number of initiatives have been launched to overcome such constraints, including the GMS cross-border transport agreement. The midterm review of the 10-year (20022012) GMS strategic framework reaffirmed the importance of trade and transport facilitation initiatives, including strengthened SPS capacity and cooperation. The essential SPS issues that need to be resolved to meet the development needs of the GMS were identified and a GMS action plan for SPS arrangements, 2010-2015 was formulated.

Trade in AFF products among GMS countries amounted to $9.27 billion in 2009. This constituted about 13% of intra-GMS trade. Total GMS AFF exports grew more than fourfold from 2000 to 2009. Nevertheless, because of poor SPS management capacities, market access for a wide range of AFF products from Cambodia and the Lao PDR remains limited, both in the GMS and globally. The governments of Cambodia and the Lao PDR have not been able to protect their crops, livestock, and consumers against trade-related health hazards caused by plant pests, animal diseases, and food safety hazards. It is expected that, with better SPS systems in place, trade of AFF products from Cambodia and the Lao PDR will increase by about 10%-15% annually. Better SPS systems will also lead to reduced risk of crop, animal products losses, and reduced incidence of food-borne diseases. Effective national SPS management systems are building blocks for regional harmonization and for establishing trust among GMS countries in each other's SPS measures.

There is lack of human resource capacity to (i) undertake surveys on crop pests and diseases, (ii) manage inspections and interceptions of imported products, (iii) monitor the agricultural pesticide trade, (iv) understand the risks of forest pest spread associated with trade in wood and forest products, and (v) sustain and expand the regional trade in crop products. There is also a need to (i) contain transboundary animal diseases, (ii) improve surveillance of veterinary drugs and feed, (iii) maintain animal food product safety, and (iv) improve border clearance procedures. Information on food safety is scarce, characterized by inadequate monitoring of food, food establishments and food poisoning outbreaks. Although tourism in Cambodia and the Lao PDR is rapidly growing, it is vulnerable without adequate food safety supervision.

Compliance with global SPS requirements requires national specialists to undertake tasks related to surveillance, risk analysis, testing, diagnostics, pest identification, standards, and conformity assessment. Trading partners and private companies often require application of good agricultural practices, good manufacturing practices, and quality assurance management (such as hazard analysis critical control points). Cambodia and the Lao PDR lack specialists who can perform these tasks. These specialists need to come (in part at least) from graduates of national higher education systems that train SPS specialists. Strengthening capacities of SPS agencies is urgently needed to meet the increasing requirements for exports and trade facilitation, and to protect health.

The project is in line with the GMS 10-year strategic framework, 2012'-2022 and supports the thrust to facilitate cross-border trade and investment. The project will contribute to pillar 4 (cooperation in regional public goods) of ADB's Regional Cooperation and Integration Strategy. The project is aligned with the targets of the National Strategic Development Plan Update, 2009-2013 of Cambodia and the National Socio Economic Development Plan VII, 2011-2015 of the Lao PDR. Improving SPS management is explicitly reflected in various Cambodia and Lao PDR sector strategies and plans, and in the GMS core agriculture support program.

Trade facilitation remains a challenging agenda in the GMS. Previous experience shows the need to adopt a phased approach to formulate well-targeted and sequenced projects to ensure implementation of bilateral and regional commitments on cooperation and harmonization. Inadequate capacities at the country level are major constraints for effective regional cooperation in SPS arrangements. Development partners, such as the United Nations agencies, the World Bank and bilateral agencies support various aspects of SPS capacity building in the GMS, but ongoing projects have not addressed SPS issues in a comprehensive manner. Preparatory work has been firmly anchored in the lessons of international experiences that stress the need for prevention rather than end-of-pipe controls, which have proven to be costly and frequently ineffective. Involvement of the private sector and civil society in SPS capacity building is necessary to ensure the right technical issues and challenges are addressed and for longer-term sustainability. During the project preparation phase, workshops to consult the private sector on SPS issues were held in Cambodia and the Lao PDR, which contributed to the overall project design. Likewise, coordination with the GMS working group on agriculture has been maintained.

Agriculture, food, forestry (AFF) products become safer, more efficiently produced, and traded in greater quantities and aligned with the Lao PDR Ministry of Agriculture and Forestry's Agricultural Development Strategy, 2011 -2020.

Enhanced SPS management system

Strengthened surveillance and inspection programs

Improved regional cooperation and harmonization

Enhanced education levels and university training of SPS specialists

Output 1:

Overall progress under this output is 93%.

- Progress under the plant health program. As of 30 June 2021, 47 pest surveys (pest and diseases) were completed, which resulted in update of and finalization of pest lists for 30 crops. These facilitated additional (i) twelve Memorandums of Understanding (MOU) were signed with Thailand for the export of, peanut with kernel, citrus, cassava, soybean, local banana, vegetables, chilly, passion fruit, potato, papaya, tomato and jatropha; (ii) fifteen export permits were signed with Viet Nam on the export conditions for corn, cassava, banana, sticky rice, passion fruit, pomelo, mango, citrus, green oranges, carrot, mustard leaf (Phak Kaat), onion, napier grass, lettuce and jack fruit; and (iii) one MOU was signed with the People's Republic of China (PRC) the export of sweet potato to PRC.

- Progress under the animal health program. Surveillance plan for transboundary animal diseases (TAD) control, guidelines for national TAD surveillance procedures, and guidelines on laboratory testing protocols for TAD control prepared under the original project are being implemented. Early Detection-Warning and Rapid Response System (DWRS) for animal diseases have been established in all 18 provinces of which the project has supported DWRS establishment in four target provinces. Risk-based surveillance of transboundary animal diseases and awareness of transboundary animal diseases has been established in two new target provinces of Bolikhamxay and Khammuane.

- Progress under the food safety program. Risk-based, programmed annual food safety surveys and inspection capacity have been established in six target provinces:Vientiane Capital, Luangprabang and Champasak, Oudomxay, Savannakhet and Vientiane province. Update of risk-based inspection and surveillance manual, including surveillance, sampling and laboratory analysis protocol were completed.

Output 2:

Overall progress under this output is 86%. As 30 June 2021, under plant health program, five bilateral working group meetings were conducted: (i) with Thailand on information sharing of updated pest list,

locust outbreak, and SPS related import permit conditions for passion fruits; (ii) with Viet Nam on information exchange, pest management and surveillance, and SPS related import permit conditions for dragon fruits; and (iii) with PRC on updated pest list, locust outbreak and preparation for the export of 22 more crops to PRC.

Output 3:

Overall progress under this output is 92%. Construction of the teaching and laboratory facilities, and development and revision of curricula for the faculty of agriculture of the National University of Lao PDR for (i) bachelor's degree in sciences in plant protection (4 years), (ii) bachelor's degree in veterinary (6 years), and (iii) bachelor of sciences in agricultural economics and food technology (4 years) were completed under the original project. The facilities and curricula have been used since academic year 2015/2016.

Advance action for Procurement and Technical packages.