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The SPS agreement: WTO agreement on the application of sanitary and phytosanitary measures.

Although import duties on many agricultural products have been dropped or waived as part of preferential trading agreements, farmers in developing countries are facing new challenges to selling their products around the world. Technical requirements, particularly for the hygiene and safety of products, have become one of the greatest barriers to trade for many producers. The World Trade Organization (WTO) Agreement on the Application of Sanitary and Phytosanitary Measures (the SPS Agreement) aims to provide the balance between the right of governments to protect food safety, plant and animal health, and prevent these sanitary and phytosanitary measures from being unjustified trade barriers.

Established by the SPS Agreement to oversee its implementation, the SPS Committee has reviewed the operation and implementation of the agreement three times since it took effect in 1995. (1) A report of the third review makes it clear that the SPS Agreement has provided an effective framework of rules regarding trade measures taken to protect food safety, plant and animal health. Many governments have enshrined key obligations of the SPS Agreement in their national regulations. They first consider whether the use of one of the relevant international standards (2) could provide the level of health protection the country considers appropriate and, if not, will base their requirement on an assessment of the health risks involved with the trade of the product. The SPS Committee has developed guidelines to assist governments in ensuring a consistent approach in determining their acceptable risk levels and in selecting the measures to achieve these. (3)

The SPS Committee has also developed guidelines to assist governments implement 'equivalence'--the recognition that different methods of production or treatment by another country may provide the same level of health protection as that resulting from the importing country's measures. (4) A more recent decision by the committee provides guidelines for adapting requirements in light of the pest or disease status of the producing region, which may differ from that of other parts of the same country. (5)

The SPS Committee meets three times a year offering an opportunity for WTO members to raise specific trade concerns regarding the SPS requirements of trading partners. Since 1995, 340 specific trade concerns have been raised in the SPS Committee (see figures 1 and 2). Animal health issues include zoonoses (such as bovine spongiform encephalopathy or BSE). Developing countries have been increasingly active in using the SPS Committee as a venue for addressing specific trade problems, although unfortunately few least developed countries (LDCs) participate actively (see figure 2).

Advance information regarding changes to the SPS requirements of importing countries is critical in order for producers to prepare their products for export. The SPS Agreement requires proposed changes to SPS requirements be notified to WTO at a time when it is still possible to accept comments from trading partners and modify the requirements before they are adopted. An exception permits governments to impose SPS measures immediately in response to an urgent situation, but the emergency measure must be temporary and comments from trading partners must be considered when revising the temporary measure. The SPS Committee has agreed on procedures and formats for ensuring transparency, which are regularly reviewed at special meetings and revised. (6)

By the end of 2009, WTO members had submitted 7,315 regular and 1,163 emergency SPS notifications. Although the majority of notifications were submitted by developed countries, notifications from developing countries had increased steadily to 47% of the total by the end of 2009. Notifications from LDCs are very few, and there is concern that these countries are also not systematically examining the notifications from other countries regarding changes that may affect their exports. A document database system was created to assist developing countries identify those notifications, and other documents, of most relevance to them. (7)

Following regular discussions to ensure that developing countries fully benefit from the SPS Agreement and receive assistance in meeting their obligations, the SPS Committee has adopted a procedure whereby developing countries may request special and differential treatment, or technical assistance, in order to comply with new SPS requirements notified by other countries. (8) Technical assistance provided by donors, international organizations or the WTO secretariat, is reported to the SPS Committee, including the activities of the Standards and Trade Development Facility. (9)

Although the SPS Agreement has succeeded in bringing greater discipline to governments' use of food safety, plant and animal health requirements, other challenges remain. Large retailers and restaurant chains have increasingly begun to establish their own SPS requirements. These may bring benefits in terms of improving hygiene and access to some markets but there are many concerns regarding additional costs for small producers, scientifically unjustified requirements and the proliferation of standards. The SPS Committee is considering possible actions to address this issue. (10)

TECHNICAL BARRIERS TO TRADE AGREEMENT

WTO

With technical regulations and product standards varying between countries, the many different regulations and standards can make life difficult for producers and exporters, and thus have the potential to be used as an excuse for protectionism. To counteract this, the Technical Barriers to Trade (TBT) Agreement aims to ensure that regulations, standards, testing and certification procedures do not create unnecessary obstacles.

The TBT Agreement recognizes countries' rights to adopt the standards they consider appropriate--for example, for human, animal or plant life or health, for the protection of the environment or to meet other consumer interests. Members are not prevented from taking measures necessary to ensure their standards are met, but that is counterbalanced with disciplines.

The agreement also sets out a code of good practice for both governments and non-governmental or industry bodies to prepare, adopt and apply voluntary standards. The code, which is applied by more than 200 standards-setting bodies, says the procedures used to decide whether a product conforms with relevant standards have to be equitable. The agreement also encourages countries to recognize each other's procedures for assessing whether a product conforms. Without recognition, products might have to be tested twice, first by the exporting country and then by the importing country.

Manufacturers and exporters need to know what the latest standards are in their prospective markets. To help ensure that this information is made available conveniently, all WTO member governments are required to establish national enquiry points and to keep each other informed through WTO--around 900 new or changed regulations are notified each year. The TBT Committee is the major clearing house for members to share the information and the major forum to discuss concerns about the regulations and their implementation.

GRETCHEN H. STANTON

Secretary, SPS Committee

World Trade Organization

(1) The reports of the three reviews are contained in WTO documents G/SPS/12, G/SPS/36 and G/SPS/53.

(2) The SPS Agreement recognizes as relevant the standards for food safety adopted by the Food and Agriculture Organization of the United Nations (FAO) and the World Health Organization's Joint Codex Alimentarius Commission (Codex), for plant protection by the Commission for Phytosanitary Measures of the FAO International Plant Protection Convention and for animal health and zoonoses by the World Organisation for Animal Health

(3) Guidelines to Further the Practical Implementation of Article 5.5'. WTO document G/SPS/15.

(4) Decision on the Implementation of Article 4 of the Agreement on the Application of Sanitary and Phytosanitary Measures', WTO document G/SPS/19/Rev.2.

(5) 'Guidelines to Further the Practical Implementation of Article 66 of the Agreement on the Application of Sanitary and Phytosanitary Measures'. WTO document G/SPS/48.

(6) The most recent recommendations are contained in G/SPS/7/Rev.3.

(7) The SPS Information Management System is available at: http://spsims.wto.org

(8) See G/SPS/33/Rev.1.

(9) See www.standardsfacility.org.

(10) See G/SPS/W/230, G/SPS/GEN/932/Rev.1, and G/SPS/W/2471 Rev.1.
FIGURE 1
Trade concerns (by subject)

ANIMAL HEALTH    40%
FOOD SAFETY      28%
PLANT HEALTH     26%
OTHER             6%

Source: WTO document, G/SPS/GEN/204/Rev I0

FIGURE 2
Number of new issues raised by members (1995-2009)

         DEVELOPED    DEVELOPING    LEAST DEVELOPED
         COUNTRIES    COUNTRIES       COUNTRIES

'95         4
'96        10             2
'97        17            11
'98        19            15                2
'99         8             5
'00         5             5
'01        19            21
'02        29            19
'03        19            13
'04        13            10
'05        16            15
'06         7             5
'07        10             6
'08         6             9                1
'09         5            14

Source: WTO document, G/SPS/GEN/204/Rev.10.

Note: Table made from bar graph.
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Title Annotation:BUSINESS FOCUS
Comment:The SPS agreement: WTO agreement on the application of sanitary and phytosanitary measures.(BUSINESS FOCUS)
Author:Stanton, Gretchen H.
Publication:International Trade Forum
Geographic Code:1USA
Date:Jul 1, 2010
Words:1406
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