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Overview of the SPS Agreement

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Overview of the SPS Agreement Powered By Docstoc
					Private SPS Standards
in WTO context
IV International Workshop on Conformity
Assessment - December 08 - 09, 2008 Rio de
Janeiro, Brazil




Marinus Huige
Chairman of the WTO Committee on
Sanitary and Phytosanitary Measures
Location: Geneva,
      Switzerland

Established:
      1 January 1995

Membership:
    153 countries
    (July 2008)

Budget: 182m Swiss
 francs, 2007

Secretariat staff: ~650

Head: Pascal Lamy
 (director-general)


                       2
What is the WTO?
                   • Negotiate trade
                     rules
                   • Implement trade
                     agreements
                   • Resolve trade
                     disputes
                   • Review national
                     trade policies



                                   3
WTO Members 2008
     (153)




                   4
%

              ?



    1947   2007
                  5
Non-tariff measures




                                        Other
                                                             TBT measures
                Subsidies




  Quantitative restrictions
                                                                   SPS meaures
                  Government purchase
                                                Trade in
                                                  services

                                                                                 6
  Agreement on the Application of Sanitary
       and Phytosanitary Measures
            (SPS Agreement)



The right to                   Avoiding
protect                        unnecessary
human, animal                  barriers to trade
or plant life
or health




                                             7
 SPS Measures - Examples
 Definition - Annex A
  A measure taken to protect:
  Human or              risks arising from additives,
                from
  animal health         contaminants, toxins or disease
                        organisms in food, drink, feedstuff



limits on              limits on               HACCP to
residues               aflatoxin               limit risks
in fish &              residues                from
shellfish              in nuts                 salmonella

                                                              8
 SPS Measures - Examples
 Definition - Annex A
  A measure taken to protect:

Human life     from    plant- or animal-carried diseases



                                        avian influenza
requirement that                        measures
susceptible animals
be vaccinated
against rabies



                                                           9
 SPS Measures - Examples
 Definition - Annex A
  A measure taken to protect:
 Animal or            pests, diseases, disease-causing
                 from
 plant life           organisms




measure to                      measure to
prevent                         prevent
introduction                    introduction
of FMD                          of fruit flies


                                                         10
 SPS Measures - Examples
 Definition - Annex A
  A measure taken to protect:
 A country         from   other damage caused by entry,
                          establishment or spread of pests


measure to                               seed
prevent                                  regulation
introduction                             to avoid
of zebra mussels                         introduction
through ballast                          of exotic
water of ships                           weeds

                                                             11
Key Provisions of the SPS
Agreement
1. Non-discrimination
2. Scientific justification
     •   harmonization
     •   risk assessment
     •   consistency
     •   least trade-restrictiveness
3.   Equivalence
4.   Regionalization
5.   Transparency
6.   Technical assistance/special treatment
7.   Control, inspection and approval procedures
                                                   12
Non-discrimination
Article 2.3




     Country A
                             Country B




                 Country C




                                         13
Scientific justification
Article 2.2

                based on scientific principles
 Members
   shall        applied only to the extent
  ensure        necessary to protect human,
                animal or plant life or health
 that any
                (least trade restrictive)
   SPS
 measure        not maintained without
    is:         sufficient scientific evidence

                except as provided for in Article 5.7

                                                   14
Scientific justification
Risk Assessment
Article 5.1


 Members shall ensure that their SPS measures
 are based on
   – an assessment, as appropriate, of the risks to
     human, animal or plant life or health,
   – taking into account risk assessment techniques
     developed by the relevant international
     organizations.




                                                      15
  Scientific Justification
   Articles 3 & 5


Measures must be based on

                               Risk assessment

                          OR




International standards




                                                 16
 Scientific justification
 Harmonization
 Article 3

              Standard-setting organizations


food safety            animal health                plant health
CODEX                      OIE                         IPPC


      Codex = Joint FAO/WHO Codex Alimentarius Commission
      OIE = World Organization for Animal Health
      IPPC = International Plant Protection Convention (FAO)

                                                               17
Scientific justification
Consistency
Article 5.5

Members shall
avoid arbitrary distinctions

          in appropriate level of SPS
          protection (ALOP) considered in
          different situations

                 if distinctions result in discrimination or
                 disguised restrictions on trade


                                                               18
Scientific justification
Least trade restrictive
Article 5.6


Once have determined the NEED for
an SPS measure
                         AND
        Have determined the LEVEL of protection needed

                       must select
   Least-trade restrictive measure to achieve ALOP
         (technically and economically feasible)

                                                     19
 Equivalence
 Article 4


If the exporting country objectively
demonstrates that its measures achieve the
ALOP of the importing country


        Members shall

                                 accept SPS measures of
                             other Members as equivalent



                                                       20
Pest- or disease-free areas
Article 6 (Regionalization)


  Members shall ensure that their SPS measures
   are adapted o the SPS characteristics of an
                         “area”


all of a country     part of a country   all or parts of
                                         several countries




                                                         21
 Transparency
 Article 7 & Annex B

                                          establish an Enquiry Point
 Members shall                                       AND
                                       designate a Notification Authority


notify other Members of new or changed
          SPS regulations when




   no international standard exists              regulation may
                  OR                      AND    have significant
     the new regulation is different              effect on trade
    than the international standard

                                                                      22
Special & Differential Treatment and
Technical Assistance
Articles 9 & 10


Members...
• ...shall take account of the special needs of
  developing countries
• ...should accord longer time frames for
  compliance
• ...agree to facilitate provision of Technical
  Assistance

                                                  23
   Private Standards – Main drivers

 Food safety crisis (BSE, E-coli, Salmonella, H1N5, dioxin)
 Retailers legal responsibility for due diligence / STANDARDS as
  liability firewall between retailer and rest of the chain
 “Corporate Social Responsibility” and “Reputational Risks”
 Consumer have increasing expectations of retailers are better
  informed, more health conscious more concerned and more vocal
  and organised
 Globalisation of retail and production / more global sourcing
 Vertical integration between suppliers and retailers

 Estimation of over 400 private schemes (UNCTAD)




Trade Creation Potential Vs. Trade Barriers
                                                                    24
Forms of Private Standards




                             25
Key Concerns Related to Private Standards


 1. Market access
 2. Developmental implications
 3. Legal aspects




                                       26
            Market Access – Possible
                  Implications
 Private Standards going beyond official food safety
  requirements
   (e.g., lower maximum pesticide residue levels - MRLs)
 Becoming de facto market access requirements
   - “Blurring” of private and official requirements
 Proliferation of different schemes
   - Overlap and/or contradictions
   - Lack of harmonization
   - No equivalence
 Access to higher-priced markets
 Less competition in markets


                                                           27
     Developmental Implications

 Costs associated with private standards
  – Costs of compliance
  – Certification costs
  – Lack of price premium
 Impact on small- and medium- sized farmers
  and enterprises
 Driving supply chain modernization and
  investments
 Faster upgrading
 Correcting underlying hygienic problems

                                            28
                Legal Aspects


 Applicability of SPS Agreement
  –   Art. 1.1 and Annex A(1)
  –   Art. 13
  –   Scientific basis
  –   Equivalence
  –   Transparency
 Mechanism/forum to address concerns
 Mechanism/forum to resolve disputes


                                        29
  Legal coverage: does it extend to
  private standards ? No
  consensus...
• Applies to all SPS measures affecting international trade
• Article 13 (SPS) :“Members are fully responsible under this
  Agreement for the observance of all obligations... Members
  shall formulate and implement positive measures and
  mechanisms in support of the observance of the provisions of
  this Agreement by other than central government bodies.
  Members shall take such reasonable measures as may be
  available to them to ensure that non-governmental entities
  within their territories, as well as regional bodies ..., comply
  with the relevant provisions of this Agreement... Members
  shall ensure that they rely on the services of non-
  governmental entities for implementing SPS measures only if
  these entities comply with the provisions of this Agreement.”

                                                              30
WTO/SPS Discussions on Private Standards

 June 2005: St. Vincent and the Grenadines raised concern in
   SPS Committee about EurepGAP certification for bananas


 October 2006: Information session with participation of
   EurepGAP and UNCTAD

 June 2007: UNCTAD/ WTO joint information session on
   private standards

 June 2008: WTO/STDF information session on facilitating
   compliance with private standards

                                                           31
SPS Committee – next steps

• Undertake study to compare private standards
  with international and official requirements
  (based on products / markets / standards/ data
  from WTO members)
• Encourage information sharing on studies
  regarding SPS-related private standards
• Organize ad hoc information sessions with
  private standards bodies and others

(G/SPS/W/230 - agreed, with changes, 9 October 2008)


                                                       32
 TBT Committee
        Obligations on non-governmental bodies

Substantive provisions in CGP  main body of TBT Agreement

 non-
                                                              transparency /
 discrimination avoidance of
                                    use / participation       consultation
                unnecessary
                                    international standards
                barriers to trade

TBT Committee: July 2007
• Kenya, Chile and Egypt: requested agenda item
• Brazil, EC disagreed: Business-to-business
  standards outside scope of the TBT agreement
• Doesn’t preclude future consideration
                                                                           33
            Marinus P.C. Huige
   Permanent Representation of
the Kingdom of the Netherlands,
             Geneva Switzerland

         Tel: +41 (0)22 7481822
   email: rien.huige@minbuza.nl
       email: enquiries@wto.org

          website: www.wto.org

				
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