Overall, the literature on the economic benefits of Standards concludes that Standards prevent market failure. Standards do this by Preventing information asymmetry and Allowing and encouraging innovation. Information provided by Standards and standardisation documents can reduce the problem of information asymmetry, which can lead to market failure. Through the provision of Standards further information is available to the consumer regarding the product, and lower quality goods or services can or will be eventually driven out by higher quality goods or services (Swann, 2000). This corrects any market failure that is present.
Information asymmetry is most acute when the goods or service is infrequently bought; long lags in the detection of the quality of the goods or service exists; the reputation of a company providing the goods or service is slow to be updated, or it is difficult to detect the quality attributes of the goods or service (Blind et al., 2007) . Examples of the ways in which Standards can reduce the problem of information asymmetry include:
- The identification of minimum admissible attributes through the establishment of safety Standards or minimum quality Standards.
- The provision of information and product descriptions through technical reference Standards that include Standards of measurement and grades of a product.
- The facilitation of international trade through Standards that focus on compatibility, product information and measurement (The Conference Board of Canada, 2007).
This therefore informs the role of the ARSO DISNET which is is to provide trade and standardisation information in Africa.
To facilitate this process, ARSO has established an online platform, the Africa Trade Web Portal to facilitate intra-African trade through promotion and dissemination of free flows of information on standards, conformity assessment, technical regulations and related matters to demonstrate compliance with quality standards, consumer requirements and technical trade regulations.
It is expected that the process will enhance the implementation of harmonised African standards among the African farmers availing summarized outreach materials as value addition tools to production for agricultural transformation.
The importance of the DISNET’s objective should be viewed from the fact that 14% of trade is done among African Countries while 86% is trade with countries outside Africa. This is because trades / exporters face Tariffs, Non-Tariff Measures (NTM), Sanitary and Phytosanitary, Technical Barriers to Trade and Other NTMs
With the focus on Agricultural products, the Trade Web portal is currently being upgraded through the support of ACP-EU-TBT-Programme with the aim of achieving:
- “one-stop-shop” source of information.
- Availing Harmonised African Standards for public and private sectors for ARSO members.
- Dissemination of information and creation of awareness on African agricultural standards and conformity assessment for the empowerment of the African smallholder farmers, traders and processing enterprises via Organisation of the workshop and development of a video.
During the Seminar, Mr. Arturo Ortiz, ACP-EU-TBT- Programme Expert made presentations on General Understanding of the African Markets and Intra African Trade, the study on SPS and TBT requirements; Marketing Standards; Trade Statistics and Tariffs and Preferential Arrangements.
From the discussions there is a greater optimism on the role of ARSO Trade web portal with most participants expressing the need to linking it to the other existing relevant web portals and platform as COMESA BISNET in order to maximise on aim of the Web portal which is to provide the African countries and stakeholders with information they need to fully benefit from the export and import opportunities that exist within African countries.
The meeting was attended by experts from 19 ARSO Member States; Botswana, Cameroon, Cote D’Ivoire, Egypt, Gabon Ghana, Guinea, Kenya, Mauritius, Namibia, Nigeria, Senegal, Seychelles, Sierra Leone, South Africa, Swaziland, Tanzania, Zambia, Zimbabwe and representatives from Landell Mills Ltd – Consultants; Trade and Industrial Policy Strategies (TIPS), DTI, South Africa; Department of Trade and Industry, COMESA Secretariat; Ministry of Industry & Inspector of Liberia (Deputy Minister); Rwanda Association of Manufacturers; AYIN Trade and Research Institute; African Trade Policy Centre (ATPC), UNECA AND NEPAD; African Union Interafrican Bureau for Animal Recourse (AU-IBAR).