Michael Friis Jensen Researcher, Globalisation & Governance, DIIS

1. Disciplining the use of food safety measures: The impacts of the WTO SPS agreement on developing countries Michael Friis Jensen Researcher, Globalisation & Governance, DIIS Standards and Trade: Impacts of food safety, quality and ‘sustainability’ standards on developing countries. A ‘Trade Mondays’ seminar funded by the Danish Institute for International Studies (DIIS) and the Governance, Economic Policy & Public Administration Research Network (GEPPA), Copenhagen, June 7, 2004

2. The problem • How to distinguish between protection and protectionism? • In theory: The SPS agreement defines legimate measures (e.g. based on science and non-discriminatory) and bans illegimate ones • In practice: It is a question about balancing free trade concerns with food safety concerns

3. Functioning of the SPS Agreement

4. Harmonisation Dispute settlement mechanism SPS Committee Transparency provisions Special concerns: Technical assistance to and special and differential treatmentof developing countries Instruments in the SPS Agreement

5. Central problems in the agreement • Harmonisation: What are developing countries interests? Has the encourgement to harmonisation been misunderstood as an obligation? • Non-discrimination: What is ”discrimination or a disguised restriction on international trade” (Art. 5.6)? Lack of definition! • Risk assessment (in cases where no international standards exist): Little if any capacity in most developing countries

6. Effects of the SPS Agreement

7. Formal (DSB): 18 formal complaints, one from a developing country No African of LDC have made a formal complaint Developing countries have been successful in challenging developed countries under other agreements Informal (SPS Committee): 183 specific trade concerns raised during 1995-2003 40% of issues raised are about developing countries’ market access Issues mainly raised by a handful of countries primarily developing country members of the Cairns Group Capacity to resolve disputes involving developing countries

8. Implementation costs • New issue in international trade liberalisation • Costs include: • costs of setting up public infrastructure (notification and inquiry points, foreign representations in WTO and standards organisations) • reform of SPS legislation and standard setting procedures • where international standards exist • where international standards do not exist

9. Conclusions • SPS agreement a useful and welcome tool for a number of middle income countries, but: • SPS agreement addresses parts of the problems of food safety measures acting as trade barriers • SPS agreement targets the problem that developed countries face but has difficulties of embracing developing country problems • The article on harmonisation (Art. 3) has had a profound impact on the thinking about how to reform developing countries food safety regulations. This may have resulted in sub-optimal policies • SPS agreement unlikely to deliver increased market access to most developing countries but may result in substantial implementation costs • Developed countries face the challenge of assisting developing countries to secure benefits from the SPS agreement • Conclusion: Overall the SPS agreement is a significant improvement upon the pre-WTO situation, but there is still ample room for improvement and some countries might end up as net loosers • Qualification: There is still much uncertainty of (a) how food safety measures impact on trade; and (b) how the various disciplines laid out in the SPS agreement impacts on trading opportuninies