Friday, January 9, 2009

International Trade (WTO) Law and Equivalence Of SPS/TBT Standards

International Trade (WTO) Law and Equivalence Of SPS/TBT Standards
Dr. Syed Wajid H. Pirzada
A workshop under the auspices of SAARC was organized by Ministry of Food, Agriculture & Livestock (MINFAL), in collaboration with Foreign office, on establishment of a Regional Network on SPS and quality control measures, in Islamabad on March 18-19, 2003. This forum provided a unique opportunity to the planners and scientists to discuss about the scope and strategies for the establishment of an effective Network on Sanitary & Phytosanitary (SPS) & quality control at SAARC level.

As a key speaker of technical session, the author underscored the need for strategic planning to regulate, in a harmonized way, the regulatory framework, development of quality infrastructure and its accreditation, and human resource development at SAARC level as to translate the vision of establishment of SPS Regional Network, into reality.

WTO Agreement on application of Sanitary & Phytosanitary (SPS) measures, a binding Agreement for 145 Members of WTO, seeks to recognize the basic right of WTO Member(s) to set their appropriate SPS measures (Standards). This Agreement supplements Article XX (b) of the GATT 1994.

The Agreement provides that WTO Members may introduce measures that are necessary to protect human, animal or plant life or health, as long as such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries, where the same conditions prevail. The SPS measures, under the Agreement, are defined as measures that affect international trade and that are applied to protect human, animal or plant life or health, with in the territory of member country, from external risks.

The Agreement seeks to encourage harmonization of [national] SPS standards with international standards for purpose of uniformity, with the view to promote trade and discourage protection of domestic food & agriculture industry from competition. The international SPS guidelines, recommendations & standards, developed by Codex Alimentarius Commission (CAC), the International Office of Epizootics (OEI) and International Plant Protection Convention (IPPC) have been mentioned specifically in this regard under the Agreement. The premise is introduction and harmonization of SPS measures, based on scientific research and aiming at protection from external risks, in the form of pests, diseases carried by animals & plants, or health risks associated with food additives, contaminants, toxins or disease-causing organisms in foods, beverages and feed stuffs.

The Members have choice to choose or not to choose international standards, and may as an alternate base their SPS measures on the relevant international standards or even adopt SPS measures of their own, ignoring international standards, provided those are science-based and afford an equal level of protection sought under the Agreement. In other words, SPS Agreement recognizes that WTO Members may have different SPS measures, for reasons such as geographic or climate conditions and/or consumers needs.

Given, these possible differences in SPS measures of Member countries, the Agreement encourages the Member countries to agree to their [different] standards provided those afford similar level of protection, through equivalence arrangements. Equivalence, in fact, is an understanding reached through formal or adhoc agreements, between/among trading partners, whereby they mutually recognize that their different [national] SPS measures are equivalent in terms of health & food safety protection requirements, and thus this arrangement helps promote trade among those countries.

WTO Agreement on application of SPS provides under Article 4:

"1-Members shall accept the Sanitary & Phytosanitary measures of other Members as equivalent, even if these measures differ from their own or from those used by other Members trading in the same product, if the exporting Member objectively demonstrates to the importing Member that its measures achieve, the importing Member's appropriate level of sanitary or phytosanitary protection. For this purpose, reasonable access shall be given, upon request, to the importing Member for inspection, testing and other relevant procedures.

2- Members shall, upon request, enter into consultations with the aim of achieving bilateral and multilateral agreements on recognition of the equivalence of specified sanitary & phytosanitary measures".

The 2nd WTO Agreement, on Technical Barriers to Trade (TBT), addresses quality aspects, as against, health & safety aspects addressed under SPS Agreement, in terms of types of measures relating to technical regulations, standards or conformity assessment procedures. This Agreement too recognizes the concept of equivalence, in Article 2.7, which provides that "Members shall give positive consideration to accepting as equivalent, technical regulations of other Members, even if these regulations differ from their own provided they are satisfied that these regulations adequately fulfil the objective(s) of their own regulations.

Thus the objective test for equivalence is to meet the health & food safety and quality objectives, as envisaged under the [national] regulations, as to afford similar level of protection.

It was in this context that author recommended that SAARC Member countries, as a starting point, should study, evaluate and enter into equivalence arrangements in the area of SPS measures & technical regulations. Besides, regulatory framework recognition of conformity assessment certification bodies, quarantine settings, laboratory infrastructure and human resource capacity & capability would be a prerequisite. Shortfalls, if any, need to be identified and deficiencies made up through collective and concerted efforts.

This would pave the way for entering into equivalence arrangements at SAARC level, that in turn will help build regional capacity in the area of food quality & safety management and promote intra SAARC trade.

A special mention was made by the author of need for capacity building in the area of risk assessment implying risk identification & characterization, risk communication and risk management. Such a capacity, inter alia, in the area of risk assessment of GMOs for example, would be rewarding, if it could be institutionalized at regional level, as for individual countries it would be a costly proposition, being capital intensive.

Yet another recommendation made by the author was adoption of Hazard Analysis & Critical Control Point (HACCP) at regional level. A standardized HACCP protocol for regional countries would help sell produce with confidence & certainty, once adopted by trading partners.

Such initiatives at the level of SAARC will also help set a stage to build SAARC as Regional Trading Area, which would be to the advantage of regional countries keeping in view their socio-economic & technological context, which is complimentary and supportive to achieve cherished goal of RTA.

(The author is National Coordinator on WTO in Pakistan Agriculture Research Council, Islamabad. For detailed profile, please click Our Experts on the top of this page)

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