1. Private SPS Standards in WTO context IV International Workshop on Conformity Assessment - December 08 - 09, 2008 Rio de Janeiro, Brazil IV International Workshop on Conformity Assessment IV International Workshop on Conformity Assessment Marinus Huige Chairman of the WTO Committee on Sanitary and Phytosanitary Measures

2. 2 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)

3. 3 Negotiate trade rules Implement trade agreements Resolve trade disputes Review national trade policies What is the WTO?

4. 4 WTO Members 2008 (153)

5. 5 % 2007 1947 ? NTBs tariffs

6. 6 Non-tariff measures TBT measures SPS meaures Trade in services Government purchase Quantitative restrictions Subsidies Other

7. 7 The right to protect human, animal or plant life or health Avoiding unnecessary barriers to trade Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement)

8. 8 Human or risks arising from additives, animal health contaminants, toxins or disease organisms in food, drink, feedstuff from SPS Measures - Examples Definition - Annex A A measure taken to protect: limits on residues in fish & shellfish limits on aflatoxin residues in nuts HACCP to limit risks from salmonella

9. 9 SPS Measures - Examples Definition - Annex A Human lifeplant- or animal-carried diseases from A measure taken to protect: requirement that susceptible animals be vaccinated against rabies avian influenza measures

10. 10 SPS Measures - Examples Definition - Annex A A measure taken to protect: Animal or pests, diseases, disease-causing plant life organisms from measure to prevent introduction of FMD measure to prevent introduction of fruit flies

11. 11 A countryother damage caused by entry, establishment or spread of pests from SPS Measures - Examples Definition - Annex A A measure taken to protect: measure to prevent introduction of zebra mussels through ballast water of ships seed regulation to avoid introduction of exotic weeds

12. 12 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

13. 13 Country A Country B Country C Non-discrimination Article 2.3

14. 14 Members shall ensure that any SPS measure is : Scientific justification Article 2.2 applied only to the extent necessary to protect human, animal or plant life or health (least trade restrictive) based on scientific principles not maintained without sufficient scientific evidence except as provided for in Article 5.7

15. 15 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. Scientific justification Risk Assessment Article 5.1

16. 16 Scientific Justification Articles 3 & 5 OR International standards Risk assessment Measures must be based on

17. 17 Standard-setting organizations food safety CODEX plant health IPPC animal health OIE Codex = Joint FAO/WHO Codex Alimentarius Commission OIE = World Organization for Animal Health IPPC = International Plant Protection Convention (FAO) Scientific justification Harmonization Article 3

18. 18 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

19. 19 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)

20. 20 Equivalence Article 4 Members shall accept SPS measures of other Members as equivalent If the exporting country objectively demonstrates that its measures achieve the ALOP of the importing country

21. 21 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 countrypart of a country all or parts of several countries

22. 22 Transparency Article 7 & Annex B Members shall establish an Enquiry Point AND designate a Notification Authority notify other Members of new or changed SPS regulations when no international standard exists OR the new regulation is different than the international standard regulation may have significant effect on trade AND

23. 23 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

24. 24 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

25. 25 Forms of Private Standards

26. 26 Key Concerns Related to Private Standards 1.Market access 2.Developmental implications 3.Legal aspects

27. 27 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

28. 28  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 Developmental Implications

29. 29  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 Legal Aspects

30. 30 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.”

31. 31 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

32. 32 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)

33. 33 TBT Committee Substantive provisions in CGP  main body of TBT Agreement non- discrimination avoidance of unnecessary barriers to trade use / participation international standards transparency / consultation Obligations on non-governmental bodies 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

34. Marinus P.C. Huige Permanent Representation of the Kingdom of the Netherlands, Geneva Switzerland Tel: +41 (0)22 7481822 email: rien.huige@minbuza.nlrien.huige@minbuza.nl email: enquiries@wto.orgenquiries@wto.org website: www.wto.org