This document discusses the concept of a "bridge to cross" (BTC) as it relates to aflatoxin standards and international trade. The BTC represents the regulatory gap between the importing and exporting country's standards. The larger the BTC, the more difficult it is for an exporting country to meet the importing country's standard. Studies have found that a 10% increase in the BTC reduces maize trade by up to 2.5% for African countries with small landholdings. Reducing domestic contamination levels and improving domestic standards are proposed as ways to effectively lower the BTC and facilitate increased international trade.

2.  This research assesses the effects of aflatoxins
standards - (SPS) standards by introducing a
new concept, bridge to cross (BTC).
 The BTC is the regulatory gap between the
exporting and importing countries.
 The gap is what needs to be bridged to access
markets
 Implies same standard means different things to
different exporters- the standard is an effective
barrier only when it exceeds the standard in the
domestic market of the exporting country.

3.  “. . . a World Bank study has calculated that
the European Union regulation on aflatoxins
costs Africa $750 million each year in exports
of cereals, dried fruit and nuts. And what does
it achieve? It may possibly save the life of one
citizen of the European Union every two years
. . . Surely a more reasonable balance can be
found”.
UN Secretary-General Kofi Annan at the Third United
Nations Conference on the Least Developed Countries ,
May 2001

5. 10 years down the line the nose dive should have happened.
It has not – why?
 Methods
 Always remember that aflatoxins is one problem out of many
 Theoretically the model was mis-specified because
▪ Trade barriers have to be included as a multi-lateral term (Australia and New
Zealand trade a lot with each other not only because they are near to each other
but also because they are so far away from the Rest of the world)
▪ Zero trade is information , ignoring it gives wrong estimates
▪ They included very few explanatory variables
 Coverage
 Trade only within a selected group of countries
 Valid to answer questions related to trade effects on a
particular trading relationship
▪ Not valid for quantifying the trade losses in numbers because of
market reallocation

6.  The effect vanishes
 Other study also finds the same thing
 Xiong and Beghin (2010) from Iowa state
university
 Does it means that aflatoxins regulations do
not matter
 Our argument is that it matters but in a different
way
 It matters as a bridge to cross

7.  BTC (Bridge to cross): the difference between
importing country standard and exporting
country standard.
 Where there is a regulatory gap – the difference
between the importing standard and exporting
standard is important
 If a country has high contamination, it has a tougher
job in achieving either standard – the BTC is high
 We find using the BTC, aflatoxins regulations matter
when the average size of farms is smaller in a country

8.  Where no domestic standards, the BTC is the
difference between actual contamination and
importing standards
 If contamination levels are low, countries could
export- i.e. there is a smaller bridge to cross
 Bridges are long for many countries
 Domestic markets
 Raise the speed on the bridge
 Cushion the fall

9.  In maize a 10%  In groundnut we
increase in BTC continue work to look
reduces 0.9% in trade at BTC as regulation
globally, 1.4% among contamination gap.
poor countries and by
2.5% in African country
sample for countries
with small
landholdings

10.  Even if Otsuki et al (2001  Though not explicitly
figures are believed, stated aflacontrol project
changing regulation is a aims to bring down the
hard nut to crack level of btc.
 Reducing domestic
contamination and
improving domestic
standards are actionable
measures

11.  Non trading pairs more important in
groundnuts
 Bridge to cross in groundnuts comparatively
longer for African and poor countries

12.  Regulation is a variable hard to alter
 In that case effort will pay off best (in trade)
by reducing contamination – also see
improvements in health
 Most countries do not export because
bridges, are far too long - especially where no
domestic standards exist
 Bridge to cross should be a key factor in
explaining zero trade.

13.  Data a significant problem
 Collected based on internet searches and
grey literature
 A highly labor intensive process that runs the
risk of not being exhaustive, representative or
imperfectly matching