WTO News Item, 1 March 2007
Standards set by private sector bodies can boost trade, but they can also make life difficult for small suppliers, the WTO committee dealing with food safety and animal and plant health heard in its 28 February–1 March 2007 meeting.
The issue of standards demanded by organizations representing supermarket chains and other bodies is relatively new. The Sanitary and Phytosanitary Measures Committee's debate is about if and how these private sector standards fall under the WTO's SPS Agreement, as well as about the economic implications for various countries.
This was one of a wide range of topics discussed in three days of informal and formal meetings of the Sanitary and Phytosanitary Measures (SPS) Committee (starting with informal consultations on 27 February). Among the specific concerns raised were complaints about the length of time some countries take to assess risk and approve imports, and what some countries consider to be importing nations' failure to follow international standards or to base their actions on science.
The meetings also covered the latest situation on mad cow disease (BSE), avian influenza, foot and mouth disease and other trade concerns. Again, several of these specific trade concerns are also related to “regionalization” — recognizing disease situations in regions within countries instead of taking measures affecting whole countries. This is a subject members continued to discuss in its own right.
The committee also considered actions to take following the latest review of the SPS Agreement, including improving transparency.
Private and commercial standards
This issue was first raised almost two years ago. The debate shifted up a gear after the committee decided to make it a separate agenda item (it was previously one among many “specific trade concerns”) and new papers were circulated by the Secretariat, some governments and observer organizations, focusing on how standards can impact the trading opportunities of developing countries.
Some members, such as Chile and the EU, said that private standards can create trade because exporters meeting the standards can sell their products more easily — the EU cited the example of Peruvian asparagus sold on EU markets.
However, some members (e.g. St Vincent and the Grenadines , Bahamas , Egypt , Cuba , Brazil ) said that the proliferation of standards that are set without consultation poses a challenge for small economies, and private standards often conflict with those set by governments or international organizations. Meeting the standards also raises costs, they said.
Some countries, such as Argentina argued that in practice these voluntary private standards can become compulsory: if a supplier does not comply it is excluded from the market. A number of countries said the priority should be to help developing countries comply with official standards. They said there is a risk of losing sight of official standards if countries focus too much on private norms.
An information session is now planned before the committee's next meeting in June, with EurepGAP and other organizations invited to speak. (“EurepGap” requirements are “good agricultural practices” — GAP — set by the Euro-Retailer Produce Working Group — Eurep.) Also invited to attend will be the chairperson and Secretariat of the Technical Barriers to Trade Committee, which deals with product standards that do not come under SPS.
This issue takes the SPS Committee into comparatively new territory. The committee generally deals with standards set by international standards-setting bodies and the mandatory regulations imposed by governments. But some developing countries have started to raise the question of standards set by the private sector, such as supermarket chains. St Vincent and the Grenadines first raised the issue because of private standards for bananas, which they said were more rigid than international standards, causing small farmers to suffer.
For this meeting, a number of new documents were circulated. A new 8-page Secretariat paper (document G/SPS/GEN/746 of 24 January 2007) looks at examples of private standards (individual firms', collective national schemes and collective international schemes) and the trade issues they raise, and how these relate to the WTO's SPS Agreement, particularly Article 13. It concludes with issues the SPS Committee might consider.
Among these: the relationship between private and international standard-setting bodies; what governments might do to live up to their obligation to ensure private bodies comply with the SPS Agreement; the relationship with other areas of WTO work such as technical barriers to trade; and “equivalence” — authorities accepting different measures which provide the same level of health protection for food, animals and plants, particularly to help developing countries that use less sophisticated health and safety technologies.
Other papers circulated were: one from the Organization for Economic Cooperation and Development — OECD — (document G/SPS/GEN/763), on its research into the costs and benefits of private sector standards; one from the International Organization for Standardization — ISO — (document G/SPS/GEN/750) and two from the UN Conference on Trade and Development (UNCTAD) on private sector standards in general and their effects (G/SPS/GEN/760), and studies of the implications for fruit and vegetables (G/SPS/GEN/761). Documents were also circulated by St Vincent and the Grenadines (G/SPS/GEN/766) and the Bahamas (G/SPS/GEN/764) on their experiences with private standards.
Specific trade concerns: resolved or withdrawn
India 's restrictions for avian influenza: the US withdrew its concerns because of revisions in Indian measures.
Japan 's import restrictions: Ecuador and China withdrew their concerns, Ecuador 's about cocoa and China 's about heat-processed straw and forage for feed, after bilateral consultations in the margins of the committee meeting allowed progress to be made in resolving these problems.
Panama 's import licences for agricultural products: Canada reported that this had been resolved with no further complaints from its exporters
Panama 's measures on milk and tomato products: Panama said this had been resolved (although the country raising the concerns, Costa Rica , has not confirmed this yet).
Specific trade concerns: unresolved
Australia 's measures on apples and prawn: New Zealand 's long-running complaint continues about the length of time Australia is taking to approve apple imports, again supported by the US and EU. New Zealand said the latest risk assessment proposed increased requirements on imports that are not supported by scientific evidence. Thailand , China and other southeast Asian countries raised a similar complaint about Australia 's proposed changes to quarantine and control measures on prawns.
Separately, Australia announced draft changes to its import risk assessment (IRA) procedures to make them more predictable and to include timetables — 24 months for a “normal” IRA and 36 months for a “special” IRA — but with provisions that allow the authorities to stop the clock in certain circumstances. However, at least some members said they remain sceptical about this.
EU restrictions on US poultry exports: The US is concerned that its poultry treated with antimicrobial solutions cannot enter the EU. The EU reported continuing difficulties at the technical level in convincing its member states and consumers that the treatment should be permitted. It continued to argue that the treatment is unnecessary and that US poultry could meet EU requirements by other means.
Republic of Korea on meat: Canada raised its concern about restrictions on beef, which it said did not observe guidelines of the World Organisation for Animal Health (OIE) on mad cow disease (BSE); Brazil complained about Korea's failure to recognize some regions of Brazil as being free from foot-and-mouth disease, also in contrast with the OIE guidelines. Korea asked for more information and defended its right to go beyond international standards.
China 's restrictions for dioxin: the EU complained that its pig products were still restricted even though the problem of dioxin in feed had been limited to a few countries and resolved a long time ago. China said it is reviewing the situation.
A number of other new and unresolved issues were also discussed (see P.S. below)
China informed members about its new Green Food Certification. The US said it has draft a risk analysis on products from cloned animals, where preliminary conclusions are that some of these should be allowed to be sold without restriction as no human health or animal health risks have been identified. However, the US stressed that products will continue to be kept out of the market since this is only the beginning of a regulatory process.
Members generally feel that transparency has improved, with the increased flow of more, a wider range, and better quality information on the measures that governments impose. A number of problems remain, and they are preparing to discuss these in the next meeting in June and in a special meeting in October.
Among the problems faced particularly by developing countries: relating governments' SPS measures to any existing international standards and how and whether to include information on this in notifications; including other potentially useful information in the notifications such as the categories (or customs “HS” coding) of products involved; coordinating within governments so that authorities dealing with SPS are kept informed by their colleagues dealing with international standards; and finding the resources to deal with the increasing flow of notifications from other members.
A new Secretariat document, G/SPS/GEN/751, analyses members' replies to a questionnaire on the operation of governments' “enquiry points” and “national notification authorities”, two key players in SPS transparency. The Secretariat is also working on a new searchable database designed to make the notified information easier to submit and to analyse.
Some members reported they are still consulting in small groups on this issue, which they consider to be important. They asked for more time to reach agreement on a proposal for the SPS Committee. The issue will be discussed again in June.
The key concept here is recognition that an exporting region (part of a country or a border-straddling zone) is disease-free or pest-free (or has a lower incidence). It is often raised under a specific trade concern as well as being discussed as a subject in its own right. A group of members have proposed that the SPS Committee develop guidelines to implement this concept, but others have opposed this approach. (The issues are outlined in a Secretariat paper, G/SPS/GEN/640/Rev.1. See also February 2006 news item)
Special and differential treatment
This was the subject of another informal consultation, and the chairperson reported on the discussion, which took place informally on 27 February and again during a break in the formal meeting on 1 March.
Egypt circulated an unofficial paper describing its examination of the issue and its preparations for making proposals, based partly on WTO dispute rulings. Egypt is concerned that provisions on special treatment for developing countries in the SPS Agreement (particularly Article 10.1) might not be as effective and enforceable in practice as desired or as needed by developing countries.
The words used in the agreement can sound “mandatory” but because the provisions do not specify the action to be taken, they leave open the question of what countries are required to do, Egypt 's paper says. It argues that the same is true for provisions dealing with technical assistance because the wording simply calls for countries to try their best without spelling out how to achieve that.
Egypt said that its document is a starting point for discussions, and asked for informal consultations on the issue before the next committee meeting in June.
Several countries, mostly developing (including Kenya , Turkey , Cuba and China ), supported the paper and the call for consultations. The EU, Japan , New Zealand and others said this discussion should not reduce members' ability to protect human, animal and plant health, which puts the SPS Agreement in a different category from some other agreements, such as anti-dumping. Some suggested developing countries do not make full use of the technical assistance that is available. Some members said they would oppose changes to the SPS agreement because it represents a delicate balance between health protection and trade liberalization.
After the second review
In an informal meeting on 27 February, members considered how to move ahead on issues raised in the second review of the implementation of the agreement, concluded in 2005. The chairperson reported that out of an original list of about 15 subjects, the agreement was to focus first on six subjects.
Four of these are already regular agenda items: transparency, regionalization, special and differential treatment for developing countries and technical assistance (with a particular focus on assessing how effective current assistance is). The other issues are using ad hoc consultations and the “good offices” of the chair to help resolve specific trade issues; and relations with international standard-setting bodies, their own relationships with each other, and monitoring the use of international standards in SPS measures.
These dates (with informals earlier in the week) could still be changed:
These are some of the trade issues or concerns discussed in the meeting or information supplied to the meeting.
Information from members: