The Agreement on Sanitary and Phytosanitary (SPS) Measures Lecture 37 Economics of Food Markets Alan Matthews.
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The Agreement on Sanitary and Phytosanitary (SPS) Measures Lecture 37 Economics of Food Markets Alan Matthews
Key issues What are the rights and responsibilities of governments under the SPS Agreement? How does the SPS Agreement attempt to provide protection while limiting protectionism? How has the SPS Agreement worked in practice
Non-tariff barriers GATT (The General Agreement on Tariffs and Trade) allows countries to maintain tariffs on trade Other economic restrictions on trade (e.g. quotas) are frowned upon Technical standards can also restrict trade –divergent standards are a pain in our private lives, and in international trade –and this can be particularly problematic when those standards are designed to protect human, animal or plant health
Approaches to dealing with differences in regulatory regimes Harmonisation Mutual recognition Coordination (regulatory rapprochment)
Private & Public Initiatives to Harmonise Divergent Standards Private: one design may dominate the market place. For example Microsoft’s Windows operating system dominates over Apple’s Mac OS Long history of international standards setting. For example: –1906 International Electrotechnical Commission (IEC) –1946 International Organization for Standardization (ISO) –1962 Codex Alimentarius Commission (of FAO & WHO)
Article XX: General Exceptions Trade barriers are possible if: “not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination …. or a disguised restriction on international trade”; and are (a) necessary to protect public morals (b) necessary to protect human, animal or plant life or heath –note: nothing about animal welfare (g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption
Uruguay Round Accords Agreement on Technical Barriers to Trade [TBT] Agreement on the Application of Sanitary and Phytosanitary Measures [SPS] TBT: all measures, except those covered by SPS Agreement
Technical Barriers to Trade Agreement (TBT) Tries to ensure that regulations, standards, testing and certification procedures do not cause unnecessary obstacles to trade TBT covers any regulations which do not fall under SPS Food related examples: shape of food cartons; packaging, labelling, food quality standards
What is an SPS measure? To protect animal or plant life or health … from risks arising from the entry, establishment or spread of pests, diseases, disease-carrying organisms or disease causing-organisms To protect human or animal life or health … from risks arising from additives, contaminants, toxins or disease-causing organisms in foods, beverages or feedstuffs To protect human life or health … from diseases carried by animals, plants or products thereof, … To prevent or limit other damage … from the entry, establishment or spread of pests
The SPS Agreement Basic Rights and Obligations Harmonization Equivalence Assessment of Risk & the Appropriate Level of Protection Regionalisation Transparency, Consultation & Dispute Settlement, Administration Control, Inspection and Approval Technical Assistance Special & Differential Treatment
Basic Rights and Obligations 2(1): Members have the right to take SPS measures necessary for the protection of human, animal or plant life or health, provided that such measures are not inconsistent with the provisions of this Agreement 2(2): Members shall ensure that any SPS measure is applied only to the extent necessary to protect human, animal or plant life or health, is based on scientific principles and is not maintained without sufficient scientific evidence, except as provided for in 5(7). 2(3) SPS measures should not arbitrarily discriminate between countries where similar conditions prevail. Sanitary and phytosanitary measures shall not be applied in a manner which would constitute a disguised restriction on international trade.
Harmonization and the Role of the Standards Setting Agencies 3(2) SPS measures that “conform to international standards … shall be deemed to be necessary to protect human, animal or plant life or health, and presumed to be consistent with… this Agreement …” 3(3) May maintain higher SPS measures if scientifically based (as in Article 5) Three bodies explicitly recognised –Codex Alimentarius Commission –International Office of Epizootics [OIE] –International Plant Protection Convention [IPPC]
Basic rules the SPS Agreement does not specify the appropriate level of protection –must be based on science –must be comparable across sectors the SPS Agreement does not oblige countries to take account of the adverse economic effect on their trading partners –must not discriminate –must have minimal trade effect
Other provisions Equivalence Risk analysis – role of science Regionalisation Transparency Precautionary principle (Art. 5.7) –If relevant scientific evidence is insufficient, members may adopt SPS measures, on a provisional basis, while seeking additional information about the risks posed by a hazard.
Role of international standards Operation of the Codex Alimentarius –Becoming more politicised –Concern at the influence of industry scientists –Limited influence of developing countries
Developing Countries and SPS Some Special & Differential Treatment –e.g. developed countries can be asked to provide English, French or Spanish translations of their legislation (compare Japan and South Korea) Lack of resource (Geneva offices, personnel, travel funds, appropriate laboratories, etc.) makes it difficult for many to participate in the SPS (and other WTO) committees and the standard setting bodies
Doha The SPS Committee was asked to review the Agreement. This fed into the Doha Ministerial The Ministerial ‘instructed’ the Committee to ‘develop expeditiously’ the programme on equivalence Instructed the Committee to review the Agreement at least once every four years Made pious noises about effective participation by all WTO Members