The external risks associated with imports of germplasm can lead to the possible entry, establishment and spread of exotic seed-borne diseases. This can affect the health of plants and inflict damage on an importing country by adversely affecting plant genetic resources, and/or affecting e human and animal health through the consumption, for example, of grains.
Although regulations aimed at controlling such diseases can potentially have an impact on the interests of the seed industry, they can also help to contain the attendant external risks to plant life and health and to the importing country. This is crucial as the related problems can potentially lead to trade disputes among trading partners. As a result, countries often require imported products to satisfy sanitary and phytosanitary regulations and to conform to mandatory standards that they have adopted for the protection of the health and safety of their population and/or the preservation of the environment.
WTO provides, inter alia, an international framework for dealing with such issues under the WTO Agreement on the Application of Sanitary and Phytosanitary (SPS) measures and the Agreement on Technical Barriers to Trade (TBT). This paper studies the impact of the WTO regime on SPS on the seed trade in Asia.
Understanding the WTO regime on SPS measures
The Marrakech Agreement, formally known as WTO Agreement, reached during Uruguay (eighth) Round (1986-1994) under the General Agreement on Tariffs and Trade (GATT) of 1947, resulted in the establishment of WTO on 1 January 1995.The latter now serves as an umbrella organization for international trade.
WTO embodies 29 distinct legal Agreements and other Memoranda of Understanding, Declarations and other Ministerial Decisions. WTO created a new era of international trade including, inter alia, two new Agreements dealing with technical regulations and standards, in the context of international trade, that is, the SPS and TBT Agreements. The latter has replaced the voluntary Standard Code negotiated during the Tokyo Round (1973-1978) under GATT 1947.
The SPS Agreement negotiations were prompted by apprehension that, in the absence of an international framework on SPS measures such as quarantine and food safety laws, the benefits likely to accrue from the liberalization of trade in food and agriculture under the WTO Agreement on Agriculture could be eroded by the concomitant erection of technical barriers to trade.
The SPS Agreement stipulates the protection of human, animal and plant life and health, while the legitimate objectives of the TBT Agreement refer to, inter alia, health, environment, safety and deceptive practices. The latter Agreement uses technical regulations and voluntary standards as well as the necessary procedures to ensure that these objectives are met. Both Agreements, which are mutually supportive, rely on the science-based Codex Alimentarius Commission's (CAC) standards, guidelines and recommendations as reference points for judging international trade disputes in those areas under the WTO Dispute Settlement (DS) mechanism. These Agreements share a common element of non-discrimination, a core principle of WTO, and have similar requirements in terms of advance notification of proposed SPS/technical measures and the creation of National Inquiry Points. It is, however, the intent of a measure that guides us as to whether the measure falls under the SPS or TBT Agreement.
SPS Agreement
The SPS Agreement, which entered in to force with the establishment of WTO, reaffirms GATT Article XX (b). Under this Article, WTO members may introduce (SPS) measures that are necessary for protecting human, animal or plant life and health provided that such measures are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where similar conditions prevail.
Under the SPS Agreement sanitary (human and animal health) and phytosanitary (plant health) measures apply to animal- and plant-based products produced in a country or intended for export to, or import from, an-other country.
The SPS Agreement defines SPS measures as those that affect international trade and are applied within a WTO member's territory to? protect human, animal or plant life/ health from external risks arising, inter alia, from pests, additives, contaminants, toxins or disease-causing organisms in food, beverages or feedstuffs. The objectives of SPS measures, as defined in the Agreement, are to:
- Protect human life/health from (external) risks arising from disease(s) carried by animals, plants and their products, or from the entry, establishment or spread of pests;
- Protect animal or plant life/health from the entry, establishment or spread of pests, diseases, disease-carrying or disease-causing organisms; and
- Prevent or limit other damage to a country from the entry, establishment or spread of pests. These include, inter alia, measures such as those directed at the protection of life/health of, for example, marine life and wild fauna and flora.
The qualifying criteria for such measures to be imposed, as stipulated under Article 2 of the SPS Agreement, is that these should be consistent with the following provisions of the Agreement:
- SPS measures are to be applied only to the extent necessary to protect human, animal or plant, life or health;
- SPS measures are to be based on scientific principle and not maintained without sufficient (scientific) evidence, except as provided in Article 5.7 of SPS, detailed blow. SPS measures that are not based on scientific principles are not deemed consistent with the SPS Agreement and are thus not valid within the terms of the Agreement under Article 2 of the SPS Agreement; and
- Under Article 2.3 of the SPS Agreement, SPS measures should not arbitrarily or unjustifiably discriminate, and they should not be applied in a manner that constitutes a (technical) barrier and/or disguised restriction on international trade. One example is an SPS measure that discriminates among trading partners where similar conditions prevail is tantamount to a disguised restriction to trade.
The SPS Agreement does not set out any specific SPS measure per se, but rather, as pointed out above, it provides a framework or a skeleton system in this regard. It encourages WTO members to harmonize their SPS measures with, or base them on, international standards, guidelines or recommendations, where these exist. It does, however, permit members to use more stringent measures than those of international standards, provided there is a scientific rationale that such measures are applied in a non-discriminatory way and that circumstantial evidence warrants the use of a higher level of protection.
For the purpose of the SPS Agreement, SPS measures in harmony with international standards, guidelines or recommendations are deemed consistent with the Agreement and thus cannot be challenged. In the case of measures that are higher or lower than stipulated international standards, they should be based on actual risk assessment that takes into account available (scientific) evidence and relevant economic factors; such measures can be challenged even if they are zero risk-based.
The SPS Agreement further stipulates that:
- The SPS measures are to be used in a least trade distorting manner;
- A WTO member country may adopt, in the face of scientific uncertainty, provisional measures to contain external risks (Precautionary Principle). That member should, however, continue to seek additional scientific evidence and review the SPS measure within the stipulated time (Article 5.7)
The Agreement also encourages trading partners to enter into equivalence arrangements, and establish pest- or disease-free area(s). In addition, the WTO Committee on SPS provides a forum for information exchange and discussions on SPS issues affecting trade and those related to a member's compliance with the Agreement, with the view to ensuring effective (orderly) implementation of the Agreement.
To be continued
(The author is Director/National Co-coordinator, WTO-Food and Agriculturally Related Matters (WTO-FARM), Pakistan Agricultural Research Council, which is an apex body in National Agricultural Research System of Pakistan)
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