Private Standards and the WTO SPS Agreement

Private Standards and the WTO SPS Agreement

Brussels Rural Development BriefingsMeeting Food Safety Standards: Implications

for ACP agricultural exports11 May 2009

Robson FernandesEconomic Affairs Officer

Agriculture and Commodities DivisionWTO

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Chronology of the discussions on Private Standards in the WTO SPS Committee

Chronology of the discussions on Private Standards in the WTO SPS Committee

St. Vincent and the Grenadines raised concern in SPS Committee about EurepGAP certification for bananas

June 2005

WTO Information Session with participation of EurepGAP and UNCTAD.

UNCTAD/ WTO joint Information Session on Private Standards and discussions in SPS Com. as specific agenda item

October 2006

June 2007

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Chronology of the discussions on Private Standards in the WTO SPS Committee

Chronology of the discussions on Private Standards in the WTO SPS Committee

Ongoing discussions and several papers circulated to the SPS Com.

October 2007 –

June 2008

October 2008

1st meeting of the informal ad hoc group on private standards:

1. Countries’ questionnaires

2. Descriptive report

3. Analytical report

October 2009

Expected Analytical report with proposed specific actions to be taken by the SPS Com.

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Reasons Why Private Standards are being Discussed in the WTO SPS Committee

Reasons Why Private Standards are being Discussed in the WTO SPS Committee

1. Market access implications

2. Developmental implications

3. Legal aspects

Trade Creation Potential Vs. Trade BarriersTrade Creation Potential Vs. Trade Barriers

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Market Access – Possible ImplicationsMarket Access – Possible Implications

Private Standards going beyond international standards (e.g., very low or zero Maximum Residue Levels - MRLs)

Private Standards going beyond official requirements (e.g., Good Agricultural Practices, Labour requirements, Environment requirements)

Becoming de facto market access requirements- “Blurring” of private and official requirements

Multiplication of different schemes- Overlap and/or contradictions- Lack of harmonization - No equivalence

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Costs associated with private standards– Costs of compliance– Certification costs– Lack of price premium

Greater Impact on Small- and Medium- sized Farmers and Enterprises

Developmental ImplicationsDevelopmental Implications

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Coverage and Applicability of SPS Agreement– Art. 1.1 and Annex A(1)– Art. 13

Mechanism/forum to address concerns

Legal AspectsLegal Aspects

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Legal questionsLegal questions

Principles of the SPS Agreement:• Scientific basis of measures• Least trade restrictiveness• Harmonization based on international standards

– OIE, Codex, IPPC

• Recognition of equivalence• Transparency• Participation in (international) standard setting• No unjustified costs in testing, certification,

approval

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... 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 comply with the provisions of this Agreement.

SPS Agreement - Article 13Implementation

SPS Agreement - Article 13Implementation

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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

The TBT contextThe TBT context

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The Committee on Trade and Environment

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

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Latest Developments in the SPS Com.Latest Developments in the SPS Com.

Identifying Practical Actions for the SPS Committee (G/SPS/W/230)

• 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

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Latest Developments in the SPS Com.Latest Developments in the SPS Com.

1. Responses to the Questionnaire (G/SPS/W/232) on real examples of implications by private standards:

– Argentina, Belize, Brazil, China, Colombia, Costa Rica, Dominican Republic, the EC, Ecuador, Egypt, Guatemala, India, Japan, New Zealand, Pakistan, Paraguay, South Africa Thailand, Tunisia, United States and Uruguay.

2. Descriptive Report on the Responses to the Questionnaire (11 June 2009)

3. Analytical Report (expected to October 2009)

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The way forwardThe way forward

Options suggested by WTO Members:• Focus on practical trade problems• Find another forum• Dialogue at national and int’l levels• Guidance on implementation of Article 13

– E.g. decision, guidelines, code of practice– Consensus required

• Dispute settlement

Outcomes from the consultative group Outcomes from the consultative group work ...work ...