Impact of EU Organic Product Certification Legislation on the Development of the Chilean Organic Supply Chain

Empirical studies have underlined the importance of technical trade barriers in the agricultural sector. For organic food products, national differences in standards and certification systems could act as a major non-tariff barrier for exporting countries, particularly developing countries, which could eventually fail to benefit from the increasing marketing opportunities for organic products in developed countries. This paper presents the results of a study on the impact of EU organic certification legislation on Chile organic sector as an illustration of the problem a developing country faces when trading internationally. The paper analyses the recent regulatory reform in Chile aimed to help domestic organic producers to overcome international trade barriers and reach a 'playing field level'. However, technical problems and an a slow uptake by the private sector have hampered the potential success of these wide-reaching legislative measures. As a result, Chilean organic products enter the EU market through the 'back door' (i.e. special import permits) with the resulting increase in transaction costs.