The WTO SPS Agreement and its relevance to international standards Ella Strickland Head of unit European Commission, DG Health and Consumers Multilateral International Relations Unit 19 February 2014, Brussels

Why trade? Economic advantages Political advantages Creates jobs and promotes growth Greater variety of goods at lower prices to consumers Helps to reduce poverty Boosts competition Leads to specialisation and higher efficiency Spreads innovation Political advantages No trade restriction - no tension More trade means more economic growth which can help to overcome the economic crisis More than 36 million jobs in the EU depend on our ability to trade with the rest of the world Powerty – higher income, higher salaries Allows businesses to access inputs at lower prices, allowing them to compete (Spurs domestic producers to be more resource efficient) The principle of “comparative advantage” says that countries prosper first by taking advantage of their assets in order to concentrate on what they can produce best, and then by trading these products for products that other countries produce best. Being specialised mean that resources are used more efficiently. Spreads new ideas, innovation, new technologies, the best research Open trade – less chances of conflict Trade with friends

EU’s position in global trade The EU is the world's largest trading block Central pillar of the world economy Biggest market in the world - 500 million consumers Well-informed consumers looking for high quality products Committed to free trade – active participant in international fora Open trade system - transparent rules Political capacity to conclude trade agreements EU is the largest economy in the world, companies/traders cannot afford to ignore this economy (despite the financial crisis) Top trading partner for 80 countries (by comparison the US is for 20) One single market – very attractive market, good to do business with Acting with one voice instead of 28s Stable and predictable Highly diverse market, imports primary products and raw materials just as processed products EU is the biggest importer in the world; first or second exporter little or no EU production (e.g. tea, coffee, cocoa, spices, tropical fruits & vegetables) EU production falls short of consumption (e.g. fish and animal feed) Wider consumer choice, seasonal gaps in availability, satisfy demands for ethnic products, raw materials for businesses Remained open even despite the crisis, while other countries closed their markets Free trade – internally and also worldwide – look at the very active agenda of FTAs Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services. Under a free trade policy, prices emerge from the equilibration of supply and demand, and are the sole determinant of resource allocation. bilateral trade agreements, CETA, US – TTIP: ground breaking FTA, south korea, singapore Spill-over effect; create precedent

World Trade Organization Established on 1 January 1995 Succeeded GATT (General Agreement on Tariffs and Trade) - 1948-1994 Bali – 1st new WTO agreement since 1995 Based in Geneva 159 Members Member-driven Decisions by consensus 30 negotiated agreements Dispute settlement The Ministerial Conference in Bali delivered an agreement on the accession of Yemen, which will become the 160th member of the WTO. The formal accession will only take place later this year after the necessary formalities are completed (ratification). Yemen asked for a transitional period in the full implementation of the SPS Agreement until the end of 2016. Since 1995 31 accessions have been completed. At the moment there are 23 countries lining up for accession. Unified dispute settlement procedure; it was strenghtened as a result of the Uruguay round (eliminated blocking, panel must be convened, appelate body, tight time limits, enforcement improved)

WTO Agreements 12 specialised agreements on trade in goods Agriculture Sanitary and Phytosanitary (SPS) Technical Barriers to Trade (TBT) Textiles and clothing etc General agreement on trade in services Agreement on trade-related aspects of intellectual property rights Agreement on dispute settlement Plurilateral agreements Essentially, the WTO is a place where member governments go, to try to sort out the trade problems they face with each other. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations. But the WTO is not just about liberalizing trade, and in some circumstances its rules support maintaining trade barriers — for example to protect consumers, prevent the spread of disease or protect the environment. These are very complex measures technically, difficult to challenge. WTO rules have priority, members must change trade policies to conform to their WTO obligations Agreements on non-tariff barriers (SPS, TBT) - in the recent years their importance increased (after tariffs were progressively reduced for agricultuural and fishery products); they were used as trade barriers more and more SPS measures include all relevant laws, regulations, requirements and procedures applied to protect human, animal or plant life or health Agrement on services re. air transport, telecommunication Plurilateral: not signed by all members (civil aircraft) Latest agreement is the trade facilitation agreement – WTO members still need to ratify; at least 2/3 of the members are needed. The deadline for this is 2015. The EU will give a 400 million euro support over 5 years to help developing countries implementing the TF agreement.

WTO SPS Agreement In force since 1 January 1995 Sets out rules that WTO members are obliged to follow when they set SPS measures on food safety, animal health and plant health Recognises Members' rights to impose SPS measures to achieve the appropriate level of protection (ALOP) - if this level is higher than international standard, it must be supported by scientific evidence Applies to all measures that may affect international trade Underlying objective is to promote stability and predictability in the system Protection of the environment & animal welfare are excluded SPS measures, by their nature, my result in restrictions on trade. All governments accept the fact that some trade restriction may be necessary. Climate, existing pests, animal diseases are different – not always appropriate to impose the same import conditions ALOP: by definition – each member may decide on what level of protection is appropriate to protect its people, animals, plants Has to be justified, demonstrated why the relevant int sta is not good enough.s Basic aim of the SPSA is to maintain member’s sovereign right to provide a level of health protection that it deems appropriate but to ensure that this right is not misused for protectionist purposes nd do not result in unnecessary barrieres to intrnat trade. Keeps the balance bw protection and free trade

WTO SPS Agreement Basic principles SPS Measures shall be: Transparent Based on international standards Based on scientific principles and risk assessment Proportionate Non-discriminatory No more trade restrictive than necessary Encourages consistent and transparent decision-making – governments are required to notify of any new or changed SPS requirements which affect trade. Legislative changes Encourages governments toa pply SPS measures that are consistent with international standards; harmonisation WTO does not do it, there are internat. organisations

International standard-setting WTO SPS Agreement encourages the use of standards developed by the international standard-setting bodies The Three Sister Organisations: Food safety – FAO/WHO CODEX Alimentarius Commission Plant protection – International Plant Protection Convention (IPPC) Animal health – World Organisation for Animal Health (OIE)

Why harmonize internationally? In order to facilitate trade by: providing health protection based on scientific evidence avoiding market disturbances - stability facilitating investment ensuring consumers' confidence by ensuring high quality facilitating access to third country markets simplifying control procedures on the basis of guarantees We facilitate trade if we follow the same rules. Act according to the same standards. Have the same understanding. Use of international standards protects against challenge

Decision-making in the WTO Ministerial Conference General Council Council for Trade in Goods Technical Committees: SPS, TBT Min conf – highest dec making body, meets every 2 years TRADE commissioner respresents the EU Bali – lot of expectations; success story, historical moment – put the multilateral trading system back on track Gen. Counc. Acts on behalf of the ministerial conference Subsidiary body Cion negotiates on behalf of the EU EU and EU Member States are members; only the Commission representatives can speak close coordination with MS Informs EP and the Council

WTO SPS Committee Meets three times per year Forum to exchange information, raise trade problems, review the Agreement Horizontal issues: ad hoc consultation, private standards, issues under the fourth review The three sisters have observer status as well as a number of other organisations

The work of the European Commission (DG SANCO/DG TRADE) Works closely with EU stakeholders Ensures that EU legislation meets the obligations of the SPS Agreement Tackles unjustified and unreasonable SPS barriers Requests bilateral discussions with third country authorities Raises specific trade concerns in the plenary meeting of the SPS Committee Negotiates the chapter on SPS in international agreements Provides capacity building to developing countries Actively participates in the standard setting work of the three sisters As a general principle DG TRADE is responsible for exports (market acces); SANCO is responsible for imports. SANCO To protect the health of European consumers To ensure food in the EU is safe and wholesome To protect the health and welfare of animals To protect the health of crops and forests Different Commission Services - Member States – industry - Delegation in Geneva

Transparency – SANCO responsibilities DG SANCO is the EU SPS notification authority/enquiry point Assists Member States to notify their SPS measures to the WTO Notifies any EU legislation which has an effect on international trade, responds to comments received Discusses trade measures with partners Monitors notifications (legislative changes) of other WTO members Maintains records of all notifications via the SPS notifications database

Trade concerns involving the EU 74 concerns raised by the EU since 1995 Examples: BSE – against several countries, since 2004 Import ban on live animals – against Russia, raised in 2012 Schmallenberg virus – against several countries, raised in 2012 BSE – against China, Korea, Australia, Japan Some developments: US published a final rule on BSE; however exports could not resume yet because of the USDA FSIS

Trade concerns involving the EU 73 concerns raised against the EU since 1995 Examples: EU temperature treatment requirements for imports of processed meat products – Russian Federation Restrictions on poultry exports – US There are other AH related STCs but limited in number.

Dispute settlement Dispute Settlement Understanding (DSU) — the main WTO agreement on settling disputes Not a quick-fix solution More than 450 disputes – in all areas - had formally been raised until 15 November 2013 42 alleged violation of the SPS Agreement - 24 of which resulted in the establishment of a dispute settlement panel These panels were established to look at 15 different SPS issues You may also mention the ad hoc procedure as another tool to facilitate the resolution of trade disputes OIE dispute settlement

Dispute cases when a panel was established Canada and the United States' - against the European Communities' measures - meat and meat products (ban on meat treated with growth-promoting hormones); European Communities - against Canada and the United States - their continued suspension of obligations relating to the EC-Hormones dispute; United States - against the European Communities' measures - poultry meat and poultry meat products; Canada – against the European Communities' measures – prohibiting the importation and marketing of seal products These are only examples – there were 15 in total The most known is the beef/hormone dispute Poultry – raised by US in 2009 Antimicrobial surface decontamination [Latest development: US submitted an application to the EU for the authorisation of peroxiacetic acid on poultry carcasses. EFSA is analysing it.] The latest case is on seals. Raised by Canada in 2009.

Thank you for your attention! Useful Links: WTO http://wto.org DG SANCO http://ec.europa.eu/dgs/health_consumer/index_en.htm