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Marinus Huige Chairman of the WTO Committee on Sanitary and Phytosanitary Measures

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

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Marinus Huige Chairman of the WTO Committee on Sanitary and Phytosanitary Measures

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  1. Private SPS Standardsin WTO contextIV 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

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

  4. WTO Members 2008(153)

  5. NTBs % tariffs ? 1947 2007

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

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

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

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

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

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

  12. Key Provisions of the SPS Agreement • Non-discrimination • Scientific justification • harmonization • risk assessment • consistency • least trade-restrictiveness • Equivalence • Regionalization • Transparency • Technical assistance/special treatment • Control, inspection and approval procedures

  13. Country A Country B Country C Non-discriminationArticle 2.3

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

  15. Scientific justificationRisk AssessmentArticle 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.

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

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

  18. Scientific justificationConsistencyArticle 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. Scientific justificationLeast trade restrictiveArticle 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. EquivalenceArticle 4 Members shall If the exporting country objectively demonstrates that its measures achieve the ALOP of the importing country accept SPS measures of other Members as equivalent

  21. Pest- or disease-free areasArticle 6 (Regionalization) Members shall ensure that their SPS measures are adapted o the SPS characteristics of an “area” all or parts of several countries all of a country part of a country

  22. TransparencyArticle 7 & Annex B establish an Enquiry Point AND designate a Notification Authority Members shall 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. Special & Differential Treatment and Technical AssistanceArticles 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. 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. Forms of Private Standards

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

  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. 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

  29. 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

  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. 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 WTO/SPS Discussions on Private Standards

  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. non-discrimination transparency / consultation avoidance of unnecessary barriers to trade use / participation international standards TBT Committee Obligations on non-governmental bodies Substantive provisions in CGP  main body of TBT Agreement • 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.nl email:enquiries@wto.org website: www.wto.org

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