America, Eastern Europe and Southern Africa. But, due to SPS measures, developing countries including those from ESAP face compliance costs related to export standards es­pecially in meat and meat products (FAO, 2001; Perry et al., 2005). Within the ESAP developing world, net exporting countries like Thailand, press for reduction of trade bar­riers in developed countries and low income net importers like Bangladesh or Indonesia promote import substitution, wherever possible.
     Though extensive grazing is still dominant, intensifica­tion and industrialization (known as "factory farming," especially in poultry and piggery) is growing even in the de­veloping world to achieve higher efficiency in production as there is growing problem of direct competition for raw ma­terials between food for humans and feed for animals/birds. There is also the threat to wild species due to competition for feed from commercialized livestock systems. There has been loss of genetic diversity in livestock which is a threat to the sustainability of the livestock sector. It is estimated that one livestock breed a month has become extinct over the last seven years. In Vietnam, the percentage of indig­enous sows declined from 72 in 1994 to 26 in 2002. Of its 14 breeds, five are vulnerable, two in critical state and three face extinction. Similarly, in Kenya, introduction of Dorper sheep has eliminated the pure bred Masaai sheep. This is important for developing world as though less pro­ductive, many breeds at risk of extinction are unique in their characteristics which may be useful to deal with challenges like climate change, animal diseases and rising demand for specific products.
     There have been many technological breakthroughs like cross breeding, Artificial Insemination (AI) and Embryo Transfer (ET) in the sector and the potential of biotechnol­ogy is immense not only in primary production but also in livestock product processing and value addition. Indigenous knowledge and its practice in livestock rearing, animal hus­bandry and hygiene maintenance come in as alternatives to the growing "factory farming" system. But, the dominance of trade by large players may not attend to these concerns unless there is market pressure on them. The environmen­tal, animal welfare and intellectual property rights issues in LLPs are also becoming crucial to deal with for better ben­efits from trade as they present both threats and opportuni­ties for developing countries.
     Due to many problems in conventional supply chains like mad cow disease and foot and mouth disease, there is emerging organic or natural livestock products market which combines principles of ethical trade as well by focus­ing on ethical treatment of animals (Steinfeld et al., 2006). Organic dairy products have emerged as an important com­ponent of the livestock products market wherein dairy and poultry have shown greater growth rates than beef and pork. In USA, there is even certified organic livestock pro­duction in many states with eggs and dairy being the fastest growing sectors. In Europe, it is EU, Austria, France and Denmark which have large production of organic dairy and other livestock products. In Latin America, it is Brazil and Argentina which had significant organic livestock activity. On the other hand, in ESAP region, organic activity is not that widespread in livestock sector.

     The success stories in LLP exports were the result of strong private sector contributions of capital and state-funded support such as the NDDB in India. This support led to improved management and entrepreneurial drive, export of value-added products instead of live animal exports and vertically integrated or coordinated systems, which included small-scale producers and a strong focus on marketing. Thailand is a good example of moving from frozen poultry meat to cooked products after the avian influenza outbreak (Perry et al., 2005). The vertical coordination was achieved through contract production or corporate production.
     But recent market pressure to require that livestock products come from environments free of animal infectious diseases rather than simply testing for product safety might tip the balance away from contract farming by smallholders and negatively impact rural livelihoods (Perry et al., 2005). There is also need to carry out assessments of different mod­els of vertical coordination to assess their impacts on liveli­hoods of primary producers.
     The newer issues of animal identification and trace-ability, differential safety infectivity of live animals versus products and animal health status at product source, be­sides product certification and animal welfare are challenges that have to be met in order to benefit from trade in LLPs. Capacity building would be important to meet global and other quality norms and more participation in standards set­ting bodies is required for developing countries to benefit from global LLP trade.
     In ESAP, Australia and New Zealand, with their high volumes of livestock production and high per capita incomes, could take the lead in capacity building for the region. They could also pioneer research to reduce the GHG emissions related to current methods of livestock production.

3.5      Environmental, Health and Social Dimensions in Trade Agreements

3.5.1      Trade, environment and sustainable development
The relationship between trade and environmental, health and social dimensions, as well as with sustainable develop­ment, is complex. Actions in one area affect the other areas, directly or indirectly. Any impact assessment of trade in ag­ricultural products would depend on which perspective is used as the starting point, whether it is environmental pro­tection, or resource management and biodiversity conserva­tion, or health concerns, or trade. Another issue to take into account would be whether short-term or long-term consid­erations are being examined.
     While environmental, health and social dimensions are acknowledged to be important, they are often perceived as potentially conflicting with trade objectives (see Koester, 2001). In this regard, there is a need to move from a simplis­tic and selective "balance and trade-offs" approach, which cannot deal with complex realities, towards a more holis­tic approach, which implies a complex integration of the various perspectives mentioned above, with recognition that there will be conflicts of interests requiring policy decisions that are in favor of long-term ecological and economic sus­tainability, human/animal health and safety, social justice, cultural rights and ethics.