1. Product Requirements and Market Access
(SPS and TBT)
C. Obura Bartel
Robert Hamwey

2. Product Requirements Exports
SPS
Safely kept
& consumed
e.g.
Ethiopia
Importing
Country
Humans, animals, plants
of importing country
TBT
Safely used,
environmentally
sound

3. Standards applied to exports: Ethiopia
SPS
TBT

4. Ethiopia’s main trading partners
Standards applied by
Ethiopia’s main trading partners
High #
Moderate #
Moderate #
Moderate #
Moderate #

5. Main Points
Product requirements are becoming more frequent and/or more stringent in many sectors of export interest to LDCs
Non compliance may result in trade losses
LDCs must continue to strengthen their ability to respond to these requirements
LDCs should continue to communicate their objectives and concerns in international trade and standard-setting bodies

6. WTO basics
Agreements
Principles

7. … WTO Agreements are between Governments, not private firms
The WTO Agreements
Member A
Member B
Goods
Services
… WTO Agreements are between Governments, not private firms
WTO
GATT
Issues
Sectors
GATS

8. The WTO Agreements
Agreements for specific sectors or issues:
Agriculture
Sanitary and phytosanitary measures (SPS)
Textiles and clothing
Technical barriers to trade (TBT)
Trade-related investment measures
Anti-dumping measures
Customs valuation methods
Trade-related intellectual property
Preshipment inspection
Rules of origin
Import licensing
Subsidies and counter-measures
Safeguards
These agreements were adopted during the Uruguay Round of negotiations in 1994 and each is an integral part of the
‘WTO Agreements’

9. qualify what types of standards are permitted and specify how they
The UR Agreements
During the Uruguay Round (UR) of Multilateral Trade Negotiations, provisions on product requirements were included in several UR Agreements
SPS
(Sanitary and Phytosanitary measures)
TBT
(Technical Barriers to Trade)
The SPS and TBT Agreements do not contain standards, rather they
qualify what types of standards are permitted and specify how they
should be applied

10. … SPS and TBT related standards non-complying products
The WTO Agreements
Member A
Member B
Goods
Services
Standards
… SPS and TBT related standards
block imports of
non-complying products
WTO
SPS
TBT

11. WTO basics
Agreements
Principles

12. Principles: Non-discrimination
National Treatment (NT) ( GATT Art. III ) ensures non-discrimination between domestic and imported goods
Most Favoured Nation (MFN) ( GATT Art. I ) ensures that imports from other Members are subject to the same treatment … exemptions exist
National health, safety and environmental policies must not arbitrarily discriminate  between foreign and domestically produced like products
 between like products imported from different trading partners

13. National Treatment
Domestic Firm
Domestic Market
Foreign Firm

14. Most Favoured Nation Terms A Terms B Most favourable terms
Exporting
Member A
Terms A
Most favourable terms
extended to all members
Importing
Member
Exporting
Member B
Terms B

15. Principles: Like products
WTO rules have generally been interpreted as not allowing to differentiate products based on their Process and Production Methods (PPMs), unless the PPM has an impact on the final characteristics of a product
Therefore, it is generally considered that WTO rules do not permit WTO Members to impose restrictions on imports of a product purely on the basis of how the product is produced (non-incorporated PPMs)

16. Like Products HIGH local pollution PPM Product PPM A
However, as an exception,
SPS and TBT related standards
allow Members to discriminate
between imports based on PPMs !
Import Market
Product
PPM B
LOW local pollution PPM

17. Principles: Transparency - notification
WTO members must notify the WTO about measures that may have a significant impact on trade
Notification obligations include health, safety and environmental measures (SPS and TBT)
The WTO Secretariat compiles all information on these measures in its Central Registry of Notifications
These are to be put in a single database that all WTO members can access

18. Health, safety and environment-related product requirements

19. Some definitions Product requirements take the form of
product standards (qualities of finished good)
and/or process standards (how the good is produced)
They may be
regulatory (in exporting or importing country)
or voluntary (response to market preferences)

20. Health, safety and environment-related requirements that may have impacts on exports from Ethiopia
Regulatory standards
Safety, health and environment (SPS, TBT)
Labelling requirements (TBT)
Packaging requirements (TBT)
Voluntary standards
Market-based buyer/consumer requirements

21. Product requirements and market access
Regulatory Standards Stringent health, safety and environment- related requirements
Voluntary Standards Consumer demand for healthy, safe, or “Environmentally friendly products” (e.g. natural foods, gourmet coffee)
Potential trade barriers for Ethiopia
Potential trading opportunities for Ethiopia ?

22. Foreign Regulatory Standard
Exporting
Country
Importing
Country
Regulatory
Product Standard
Voluntary
Process Standard

23. Home Regulatory Standard
Exporting
Country
Importing
Country
National Env. Policy Regulatory Process Standard
Potential for easier entry
but
Reduced competitiveness

24. Regulatory Standards
SPS – Food, plant and animal safety standards. Applies only to agricultural and some natural commodities trade (e.g., timber products).
TBT – Food, plant and animal safety standards, as well as environmental protection standards. Can apply to trade of any good (e.g., can include standards such as packaging and labelling for food), but most generally applies to non-agricultural trade.
Both SPS and TBT product standards can have environment related process implications (PPMs)

25. SPS or TBT ? SPS measures  Other measures must be TBT measures
To protect:
From:
human or animal life
risks arising from additives, contaminants, toxins or disease-causing organisms in their food, beverages, feedstuffs
human life
plant- or animal-carried diseases (zoonoses)
animal or plant life
pests, diseases, or disease-causing organisms
a country
damage caused by the entry, establishment or spread of pests
SPS measures
 Other measures must be TBT measures

26. Differences between SPS and TBT Measures
Illustrative SPS Measures :
Additives, contaminants, toxins in food or drink
Residues of drugs or pesticides in food or drink
Processing methods with implications for food safety
Plant/animal quarantine procedures
Declaring areas free from pests or disease
Preventing disease or pests spreading to or in a country
Sanitary requirements for imports (e.g. refrigeration used to transport animals)

27. Differences between SPS and TBT Measures
Illustrative TBT Measures :
Labelling of composition or quality of food
Volume, shape and appearance of packaging
Packaging and labelling for dangerous chemicals
Regulations for electrical appliances
Regulations for communications equipment
Textiles and garments labelling
Testing vehicles and accessories
Regulations for ships and ship equipment
Safety regulations for toys

28. Standard Process Standard
Voluntary Standards
Exporting
Country
Importing
Country
Voluntary Product
Standard Process Standard
Consumer Preference
Niche Market

29. Voluntary Standards
Due to increased consumer demand for healthy and environmentally preferable products importers may impose certain health, safety or environmental requirements on their suppliers from developing countries
Voluntary standards have no legal basis and are not covered by the SPS and TBT Agreements.

30. UNCTAD Training Programme for Ethiopian Officials
WTO provisions
SPS
TBT
UNCTAD Training Programme for Ethiopian Officials

31. and Phytosanitary Measures (SPS)
Agreement on Sanitary
and Phytosanitary Measures (SPS)
The SPS Agreement governs measures used by governments to ensure that human and animal food is safe from contaminants, toxins, disease-causing organisms and additives, and measures to protect human health from pests or diseases carried by plants and animals
SPS

32. SPS Agreement  Harmonisation
SPS measures may only be applied to the extent that they are necessary for the protection of life of humans, animals or plant life
They should not lead to discrimination between Member Countries where identical or similar conditions exist
Member Countries are encouraged to establish measures on the basis of internationally recommended standards and directives, in order to internationally harmonise sanitary and phytosanitary measures
Harmonisation 

33. International standards for harmonisation are those of the
SPS Agreement
International standard-setting bodies mentioned in the SPS Agreement:
Codex Alimentarius
the International Office of Epizootics
the International Plant Protection Convention
WTO Members may introduce or maintain stricter measures if these are based on a scientific justification or if they are the consequence of coherent decisions based on an appropriate evaluation of risks
Risk Assessment  
International standards for harmonisation are those of the
‘three sisters’

34. including through Mutual Recognition Agreements
SPS Agreement
Article 4 of the SPS Agreement, stipulates that measures, which are demonstrably equivalent, should be acceptable to the importing country
Some members of the WTO have interpreted equivalence to mean any measures that can achieve the required level of SPS protection
Allows countries to export from certain regions that are free from pests and diseases even when some regions of such countries are affected by diseases
Regionalisation  
Equivalence
including through Mutual Recognition Agreements

35. Precautionary Principle
in the SPS Agreement
National measures must be based on “sound science” and on an assessment of risks (Article 5.1) - this is often very difficult/costly in developing countries
Governments are allowed, under certain conditions, to take provisional measures where relevant scientific information is insufficient (Article 5.7, see next slide)
Beef/hormone case

36. Precautionary Principle
in the SPS Agreement
Article 5.7 of the SPS Agreement
“In cases where relevant scientific evidence is insufficient, a Member may provisionally adopt sanitary or phytosanitary measures on the basis of available pertinent information, …
In such circumstances, Members shall seek to obtain the necessary information for a more objective assessment of risk and review the SPS measures accordingly, within a reasonable period of time” - the latter is a controversial issue

37. Special and Differential Treatment
Article 10 of the SPS Agreement provides scope for the phased introduction of new SPS measures and longer periods for compliance for products of export interest to developing countries
The SPS Committee may also grant developing countries exceptions from the obligations under the agreement based on their financial, trade and development needs
Article 9 provides for technical assistance including technical expertise, training and equipment to assist Members adjust to and comply with SPS measures

38. Technical Barriers to Trade (TBT)
Agreement on
Technical Barriers to Trade (TBT)
Recognizes the right of WTO Members to protect human, animal and plant life and the environment and to set the level of protection as it deems appropriate
Aims to ensure that technical regulations, standards and conformity assessment procedures do not create unnecessary obstacles to trade
Encourages countries to use international standards where these are available
Harmonisation
including through common use of ISO Standards 
TBT

39. TBT Agreement
TBT measures include technical standards and conformity assessment procedures
Permits technical standards for product characteristics or related PPMs
Specifies conformity assessment procedures used to determine that product requirements are met
It may also specify terminology, symbols, packaging, marking or labelling requirements as they apply to a product or a PPM

40. TBT: Conformity Assessment procedures
The TBT Agreement calls upon WTO Members to “ensure, whenever possible, that results of conformity assessment procedures in other Members are accepted, even when those procedures differ from their own…”
These include, for example: control, testing, verification and certification 
Equivalence
including through Mutual Recognition Agreements

41. SPS and TBT Enquiry points
Each WTO Member country must establish one enquiry point to respond to questions from other Member countries and provide documentation on SPS and TBT regulations adopted or proposed, control and inspection procedures, conformity assessment, production and quarantine treatment, pesticide tolerance, risk assessment procedures, etc. 
Transparency
and
Notification

42. SPS and TBT
in practice

43. SPS and TBT Implementation
Member with standard
Notification
Review
Info
Xchge
Measure Applied
Risk, Conf. Assmt
Ctte Mtg
DSU
Revise/Maintain
Measure
Compliance
Exports
Non-compliance
Exports
Other Members

44. SPS and TBT Committee Meeting
Typical Agenda for an
SPS and TBT Committee Meeting
Implementation of the Agreement
Information from Members
Specific Trade Concerns of Members
Consideration of new notifications received
Monitoring the use of international standards
Equivalence, Harmonisation, Regionalisation (SPS)
Comformity Assessment, Triennial Review (TBT)
Transparency
S&DT, Technical Assistance
Statements from observer organizations (FAO, WHO, OIE, IPPC, ISO, UNCTAD, etc.)
Requests for observer status
Other business

45. Illustrative Trade Concerns of Members
Argentina raised concerns on measures adopted by Panama to prohibit the imports of certain products because of FMD (SPS)
Nicaragua, Brazil, Cuba, India, Guatemala, Mexico, Ecuador, Bolivia, El Salvador, Costa Rica and Peru raised concerns over Germany’s impositon of standards higher than Codex for MRLs of Ocratoxin A in coffee as discriminatory and scientifically unjustified (SPS)
The United States outlined potential difficulties in meeting proposed EC regulations on the traceability and labelling of biotech food and feed products (TBT)
The representative of the EC raised concerns about a new regulation of Japan concerning the release of formaldehyde from construction material (TBT)

46. Systemic concerns of
developing countries
with SPS and TBT
implementation

47. Concerns and constraints...
As standard-takers, it is difficult to develop required capacities quickly enough to avoid export dislocations
Limited participation in international standard-setting
Difficult to assess compliance with national standards
Developed country standards may not apply to domestic conditions; necessity of establishing two production channels – domestic and export

48. Concerns and constraints...
Voluntary standards do not have provisions regarding notification
Lack of information, infrastructure, technology and capital
High costs of compliance with standards but limited potential to attract needed investments for new PPMs, testing, inspection and verification
Difficult to acquire required inputs at competitive prices; often requiring import of inputs

49. National actions and
policy responses

50. At the national level Awareness raising Training
Implementation of national enquiry points
National and regional standard setting
Technology, innovation and enterprise development
Support for small and medium sized enterprises (SMEs)
Institutional reform

51. Awareness raising
General awareness of the effects of international standards on exports
Campaigns to create awareness on food safety
Encourage improved sanitation methods for food production workers

52. National standard setting
Development of national standards compatible with both standards in international markets and domestic conditions
Policy dialogues to develop standards and regulations that can be effectively enforced
Strengthening domestic infrastructure, e.g., in the areas of training, testing and certification

53. Implementing SPS: HACCP
The Hazard Analysis Critical Control Point (HACCP) system adopted as one of the international standards of the Codex Alimentarius has now been implemented in the national legislation of a number of countries
The HACCP system aims to ensure the safety of food for consumption
The HACCP system sets out principles and key hygiene controls at each stage of the food chain, from primary production to final consumption

54. Implementing SPS: HACCP
HACCP enables producers to assess hazards and establish control systems that focus on prevention rather than relying on testing of the end-product
HACCP is specifically designed for the food and food-related industry and focuses on hygiene
It is a systematic approach of preventing and reducing risks
Will increasingly become a market requirement imposed upon developing exporters by their buyers

55. Technology, innovation and enterprise development
Enterprise development to strengthen sanitation, safety and environmental quality of products and production processes
Promotion of Quality and Environmental and Management Systems, e.g., ISO 9000, 14001
New processes for processing and packaging with greater emphasis on environment-friendly inputs
Promotion of clean technologies (UNEP/UNIDO Centres for Clean Technology)
Ethiopia is pursuing these approaches

56. Support for SMEs Facilitate the registration of SMEs
Improve the provision of timely and accurate information to SMEs
Promote partnerships among SMEs

57. Institutional measures
Policy dialogues to enhance coordination between ministries and the private sector
Sharing of information
Build national and regional networks of laboratories
Strengthen regional testing and certification bodies
Establish national enquiry points
Implement HACCP

58. At the multilateral level
Transparent preparation of international standards
Participation in SPS, TBT and international standard setting meetings
Participation in technical assistance programmes (UNCTAD, WTO, World Bank, UNEP, ITC, UNIDO)

59. Implementation of trade rules
Develop bilateral agreements for:
Mutual recognition of conformity assessment and certification procedures
Equivalence of national standards and labelling criteria

60. Issues for discussion

61. Experiences of LDCs
What significant health, safety and/or environmental requirements in export markets do LDCs now face?
What product requirements will soon be encountered in new export markets?
How can LDCs respond to such requirements?

62. What priorities for LDCs?
Creating awareness of health and environmental requirements in international markets among government ministries, producers and others?
Improving institutional capacity to develop and/or strengthen domestic standards and infrastructure?
Exploring regional cooperation?
Enhancing understanding of WTO rules, in particular the SPS and TBT Agreement?
Participating effectively in international standard-setting and other international debates?
Improving information flow?