The SPS Agreement and its Implementation Victor Mosoti Legal Officer Development Law Service FAO Legal Office

Three main points on accession procedures… That accession to the WTO is conducted in an atmosphere of practically no rules [Art. XII of the Marrakech Agreement: “…terms to be agreed”] That accession implies adopting and implementing extensive WTO disciplines  Article XVI:4 of Marrakech Agreement…“each Member shall ensure conformity of its laws, regulations and administrative procedures…”  Legal reforms [up to 40% of the laws sometimes]  Institutional reforms That accession (being a “give and take”) opens up foreign markets to domestic producers, with foreign producers also benefiting from host country markets.

Legal Framework for WTO Accession As with most other international organizations, a new member must pay “a fee” in order to join…however… Accession to the WTO is unique because…  It involves very extensive commitments (“fees”)  Joining implies economic openness and rule of law  Of its binding dispute settlement system. The rules for joining the WTO are summed up in Article XII.

Key Features of Article XII Article XII is remarkable only in its brevity! The key feature is: “[…] on terms to be agreed between it and the WTO.” The implicit message in Article XII is… countries get what they are able to negotiate!

Why are standards important to agric. trade? Influences marketability of agricultural products: meeting consumer expectations important. SPS measures are applied to lower or eliminate the risk posed to human, animal or plant life or health by pests, diseases, various food additives or contaminants. Link with Agriculture negotiations: “SPS standards” issues entered the UR negotiations when it was realized that non-tariff barriers would be replaced by bound tariffs: fear that sanitary and phytosanitary measures would become a disguised barriers. The SPS and AoA are therefore complementary.

The Scope of the SPS Agreement Sanitary measures deal with human and animal health; phytosanitary measures deal with plant health. The agreement applies to all sanitary and phytosanitary measures that may affect trade either directly or indirectly. Examples of such measures could be:  requiring products to come from disease-free areas;  quarantine regulations;  certification or inspection procedures;  health related labeling – e.g. GMO; Maximum Residues Levels (MRLs) etc.

Definitions Sanitary/Phytosanitary Measures Any Measure applied to Protect Animal or Plant Life or Health from Risk related to the establishment or spread of Pests or diseases Disease-carrying organisms Disease-causing organisms

Definitions Sanitary/Phytosanitary Measures Any measure applied to Protect Human and Animal Life or Health from Risks from improper use of food additives contaminants toxins disease causing organisms in foods, beverages or feedstuffs

Definitions Sanitary/Phytosanitary Measures Any Measures Applied to Protect Human Life or Health from diseases carried by animals plants animal/plant products

Definitions Sanitary/Phytosanitary Measures Any Measure Applied to Prevent or Limit Damage from the entry of Pests the establishment of Pests the spread of Pests

Scope of the SPS Agreement The agreements covers four scenarios (“SPS Measures”): –First: Protection of human or animal life or health, from risks arising from additives or contaminants, toxins or disease-causing organisms in their food. –Examples: Pesticide levels (MRLs) on fruits and flowers; poultry contaminated with salmonella; restrictions on the use of veterinary drugs and hormones on certain livestock

Scope of SPS Agreement… Second: Protection of human life from plant or animal carried diseases. Examples: banning the import of livestock products because of incidence of foot-and-mouth

Scope of the SPS Agreement Three: Protection of animal or plant life from the introduction of pests, diseases or disease-causing organisms. Example: restrictions on fruit from areas plagued by fruit fly Four: Protection of a country from damage caused by the entry, establishment or spread of pests. Example: protection from the undesired importation of certain weeds and pests.

Nature of the SPS Agreement Unlike the AoA which has specific reduction commitments, the SPS imposes no quantitative and legally binding schedules of concessions. It is simply a set of rules, principles and benchmarks to ensure that any SPS measures are justified and are not disguised trade barriers.

Key Provisions in the Agreement Art. 3: Harmonization: “encourages the establishment, recognition and application of common SPS measures by different Members”. Use of international standards, guidelines and recommendations based on scientific evidence is encouraged. Standard setting organizations provide these benchmarks: Codex, IPPC, OIE. The adoption of their standards is voluntary. Problem of participation in standard setting bodies has often been raised: FAO/WHO trust fund

Adoption of international standards is voluntary but such adoption is deemed compliance with SPS Agreement. Countries are allowed to impose stricter standards if they have scientific justification. Countries can decide not to use international standards but must be based on a defensible and proper risk assessment. Key SPS provisions…

Other Key Provisions… Art. 4: Equivalence: Countries are encouraged to recognize others’ procedures as offering equivalent protection levels. Bilaterally negotiated. Art. 5: Risk Assessment: Should be systematic and scientifically sound. This can be expensive as it requires equipment and laboratories. Art. 7: Transparency: (i) requirement to designate a national notification authority (ii) national enquiry point.

Article 7 Transparency Publication of regulations provide lead time for comment Enquiry Point established Notification procedures followed General Reservations (related to Confidential information)

Article 3 Harmonization Members shall base Sanitary and Phytosanitary Measures on international standards, guidelines and recommendations Measures which conform to international standards are consistent with Agreement Higher level of protection may be used

Article 4 Equivalence Members shall accept other Member measures as equivalent, if final results are the same Members shall consult to achieve bilateral and multilateral agreement (Equivalence Agreement, MOU)

Article 5 Risk Assessment SPS Measures are to be based on an assessment of the risks to Human, Animal and Plant life and health using internationally accepted Risk Assessment Techniques

Article 5 Risk Assessment Risk Assessment should take into account available scientific evidence relevant processes and production methods inspection/sampling/testing methods prevalence of specific diseases or pests existence of pest/disease free areas ecological/environmental conditions quarantine or other treatment

Article 5 Risk Assessment Risk Assessment for animal and plant life or health should take into account economic factors such as Cost of control or eradication Potential damage-loss of production/sale Cost effectiveness of alternative approaches

Article 13 Implementation National governments are responsible for observance of agreement by other than central government bodies

Implementation and transition periods Prioritize key sectors such fruit and vegetables Transition periods. Note: depends on negotiations, can range from 3-10 years. Strengthening and better coordination of the food technology and quality control administration and plant protection services both at the national and local levels Strengthening the national laboratories; both human resources and equipment. Implementation of Codex and OIE standards Join IPPC

SPS Notification Requirements Annex B para. 5: proposed SPS laws and regulations; or changes not the same as international standards and have a significant trade effect. Annex B para. 3: enquiry points to answer all questions and provide relevant documents to trading partners. Annex B para. 10: National notification authority: one government agency responsible for notifications.