SPS ISSUES IN THE NAFTA REGION Paul Haddow Executive Director, International Affairs Canadian Food Inspection Agency Policy Disputes Information Consortium Mexico, March 6, 2002

Organization International Regulatory Framework Experience to Date in Avoiding/Resolving Disputes Future Challenges

The International Framework Trade Rules: WTO, NAFTA International Standards: Codex, OIE, IPPC/NAPPO Environmental Agreements: Cartagena Protocol

Basic WTO Disciplines General obligations under the GATT Don’t discriminate against imports (Art.III) Don’t discriminate between exporting countries (Art. I) Tariffs only measure of protection (Art. II) not permitted in Free Trade Areas

Basic WTO Exception There are situations in which countries may discriminate against imports/between countries, under WTO rules before 1994/5: GATT Art. XX, including XX(b) - measures to protect human, animal and plant life or health after 1994/5: NAFTA & WTO SPS agreements as elaborations of Art. XX(b) exception

Scope of SPS Agreements - WTO & NAFTA Measures with objective of protecting human, animal or plant life or health from food/feed-borne risks; pest or disease related risks; and where measure affects international trade Risk-based; not product-based

Essential SPS Rules Countries have the right to regulate for food safety, animal & plant health chose own level of protection Countries have the obligation be transparent be consistent in cases of similar risks base regulation on scientific risk assessment use least trade restrictive option

SPS Agreements - other aspects Temporary measures insufficient scientific evidence obligation to seek evidence required & review measure Equivalence: other approaches to meet Appropriate Level of Protection Regionalize

International Standards National measures conforming to relevant international standards, guidelines or recommendations are deemed necessary and presumed to be consistent Relevant standards - a positive list for food safety -- Codex Alimentarius for animal health -- International Office of Epizootics for plant health -- International Plant Protection Convention

Implications 1995 marked the full intersection between international trade rules and Codex/OIE/IPPC texts on the up side, new authority for international standard setting bodies on the down side, new vulnerabilities to being used as back door to obtain relief from WTO/NAFTA disciplines

What’s Special About NAFTA? Provisional measures Equivalence Scientific expert groups Respondent chooses forum -- WTO or NAFTA Positive list of environmental agreements

Cartagena Protocol Environmental agreement to regulate international movement of living genetically modified organisms - not yet in force U.S. & Canada: two of largest exporters Canada signed April 2001 U.S. not party to underlying convention Mexico: center of diversity Mexico signed May 2000

The Framework Summed Up Science-based, rules-based, transparent, mutually reinforcing elements Provides a sound framework within which three governments manage/resolve SPS issues

Experience to Date in Avoiding/Resolving Disputes In WTO 3 panels EU Hormones: risk assessment Australia Salmon: risk assessment; consistency Japanese Varietals: risk assessment; least trade restrictive; transparency; provisional measures SPS Committee Over 85 issues resolved transparency is key

NAFTA SPS No dispute settlement panels yet Dispute provisions have been used though (Canada-USA potato wart issue) Committee on SPS Measures Technical Working Groups report to Committee - Food Packaging, Labelling and Food Standards TWG being created

NAFTA - Unique Features Dispute Resolution Corporation Referral to group of experts possible at each stage: Committee, Trade Commission, formal consultations and legal panel NAFTA Free Trade Commission (Trade Ministers) is unique

NAFTA TWG’s Pesticides; Animal Health; Plant Health (NAPPO); Dairy, Fruit, Vegetable and Processed Food; Meat, Poultry and Egg Inspection; Food Additives and Contaminants; Fish and Fish Products; Veterinary Drugs and Feeds; Food Packaging, Labelling and Food Standards (new) Some very active, others less so TWG’s are engaged in cooperative initiatives, harmonization, information exchange

Day to Day Cooperation Hundreds of issues handled routinely between regulatory agencies Canada has always worked closely with U.S. - now even closer with U.S. and building with Mexico Tripartite preparedness exercises on FMD good example - also cooperation on BSE Use of formal dispute settlement therefore not good indicator of success in resolving disputes

Future Challenges There will always be some disputes Multilaterally Regulatory challenges from new diseases and technologies Potential weakening of science-based regulatory system animal welfare processed-based (not product-based) labelling precaution Capacity of developing countries to participate in developing and implementing obligations/rights

Challenges Continued…. In the Hemisphere Revisit line-up of TWGs and SPS Committee priorities In FTAA, Canadian proposal for a SPS consultative mechanism pending end of negotiations in 2005