WTO’s Work on Private Standards

1. WTO’s Work on Private Standards Gretchen H. Stanton Senior Counsellor Agriculture and Commodities Division WTO

2. Chronology of Discussions on Private Standards June 2005 October 2006 March 2007 June 2007 St. Vincent and the Grenadines raised concern in SPS Committee about EurepGAP certification for bananas SPS Committee discussed private standards as trade concerns UNCTAD/ WTO joint Information Session on Private Standards and discussions in SPS Com. as specific agenda item WTO Information Session with participation of EurepGAP and UNCTAD. St. Vincent and the Grenadines requested continued discussion by SPS Committee

3. Chronology of Discussions on Private Standards October 2008 October 2007 June 2008 Members invited to present specific examples of products, markets and private standards which have created difficulties – or benefits – for their exports. UK presented study (G/SPS/GEN/802). WTO/STDF Information session on facilitating compliance with private standards Committee adopts work program (G/SPS/W/230)—”Comparative Study”

4. Private Standards in International Trade – Why and How • Food safety concerns • Private companies liability for food safety risks • “Corporate Social Responsibility” and “Reputation Risks” • Vertical integration between suppliers and retailers • Large food retailers • Estimation of over 400 private schemes (UNCTAD) • Private standards are global Trade Creation Potential Vs. Trade Barriers

5. Examples of Private Standards • Individual Firms Schemes • Collective National Schemes • Collective International Schemes

6. Examples of Private Standards Individual Firms Schemes • Private firms set their own standards for products that they sell • Can be based on national/ regional/international standards or exceed these • Can include administration schemes, specific certifications and other requirements • Usually applicable to fresh products E.g., Tesco Nature’s Choice, Carrefour Filière Qualité

7. Examples of Private Standards Collective National Schemes • Set by national retailers associations and/or producers • Establish specific standards for products they produce or sell • Can be based on national/ regional/ international standards or exceed these • Can include administration schemes, specific certifications and other requirements E.g., British Retail Consortium Global Standard – Food, Assured Food Standards

8. Examples of Private Standards Collective International Schemes • Refer to existing retailers food safety management systems according to established parameters which can encompass food safety, social responsibilities, environmental demands, labour requirements, etc. • Requirements can be pre-farm gate (growers and farmers), post-farm gate (food packing and processing) and for retailers E.g., Global Food Safety Initiative, EurepGAP, ISO 22000

9. Government food safety requirements • Separate food safety from quality requirements • Based on Codex standards or • Based on a risk assessment • Consistent level of health protection • Least restrictive of trade • Recognize equivalence of other measures • Notified in advance, with comment period • Published, with reasonable interval before entry into force • Subject to WTO formal dispute settlement procedures

11. Key Concerns Related to Private Standards • Market access • Developmental implications • Legal aspects

12. 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

13. 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 • Correcting underlying hygienic problems • Faster upgrading

14. 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

15. SPS Agreement - Article 13Implementation ... Members shall: • take such reasonable measures as may be available to them to ensure that non-governmental entities within their territories ... comply with the relevant provisions of this Agreement. • ...not take measures which have the effect of, directly or indirectly, requiring or encouraging such ... non-governmental entities... to act in a manner inconsistent with the provisions of this Agreement. • ensure that they rely on the services of non-governmental entities for implementing sanitary or phytosanitary measures only if these entities complywith the provisions of this Agreement.

16. The TBT context • Similar language: • Role of non-governmental bodies with respect to (mandatory) technical regulations • Code of Good Practice • For bodies setting (voluntary) standards • Contains key principles of TBT Agreement

17. The Committee on Trade and Environment • Environment requirements and market access • Difficulties faced by developing countries • Recently: discussion on organic products • Lack of harmonized standards

18. 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)