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

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

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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

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

12. 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

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

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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