WTO Agreement on Application of Sanitary & Phyto-Sanitary Measures

WTO Agreement on Application of Sanitary & Phyto-Sanitary Measures

Syed Wajid H. Pirzada

Uruguay Round (UR), under General Agreement on Tariff & Trade (GATT), formally brought agriculture, for the 1st time, in the fold of multilateral negotiations.

In UR the developing countries (DCs) viewed agricultural trade liberalization, as a threat to their economies. The fear of DCs was not unfounded, for:

• It was not (only) that the majority of the population in DCs earned out their existence from agricultural sector, which was at stake but the little share they had in global trade, was too restricted to agriculture, and that was at risk.

• The total value of global trade in agricultural products was estimated at US$ 586 billion in 1996, amounting to 11.5 % of total world trade, of which DC's share was 37% during the period; and the agricultural products accounted for 70-90% of total exports from DCs. This clearly indicated stake DCs, like Pakistan, had in multilateral negotiations on agriculture.

• It was not (only) quotas and tariffs that impacted the trade opportunities, DCs (might) had in a fair trading system, but also huge subsidies doled out by Industrially Advanced Countries (IACs) that distorted international (agricultural) markets.

• Yet, an other reason was their inability to meet the so called demands in terms of quality for, with the dismantling of tariffs it was being apprehended that IACs would have (natural) temptation to use (higher) environmental /ecological and health & hygiene standards to protect their agriculture sector and farmers, from DCs (possible) exports to IACs. For, the former enjoyed natural comparative advantage in food & agriculture as against artificial comparative advantage latter had managed through ingenious forms of protection and support. Thus with dismantling of tariff, higher health & environmental standards could offer an alternate instrument to protect their (otherwise) uncompetitive farm sector.

This apprehension of DCs (too) was not uncalled for, as today we witness health & environmental standards being used by IACs as disguised barrier to trade in the name of environmental and public health safety.

In fact, IACs are exploiting to their advantage the proviso of WTO Agreement on Application of Sanitary & Phyto-Sanitary (SPS) Measures, to protect their (uncompetitive) agriculture. The intent of SPS,however,was to protect the fauna, flora and public health from any risk arising from exports. The Agreement in this regard contains procedural requirements for formulation of SPS measures. It covers all such measures which aim at protecting human, animal and plant health, from risks arising from pests, diseases, disease-causing organisms, additives, contaminants, toxins or disease-causing organisms in food, beverages and feed stuff. Yet,the Agreement prohibits using SPS measures as disguised barriers to trade.

The guiding principles in this regard, as stipulated under the Agreement are:

• Minimizing the negative trade effects,

• Risk-assessment based on available scientific evidence and transparency, and,

• In cases, where adequate scientific evidence is not (yet) available, an importing state may provisionally adopt SPS measure on the basis of available pertinent information; such measures, however, must be reviewed with in reasonable period of time (Precautionary Principle).

Whereas, the WTO Members have the right, under SPS Agreement, to adopt SPS measures that are consistent with these provisions of the Agreement, this right, however, qualifies on three parameters:

i. SPS measures should be applied to the extent necessary.

ii. These should be science-based and not maintained without scientific evidence.

iii. These should not constitute disguised and unjustifiable barriers to trade.

In sum, it is the subject intent, which matters as to judge, whether the use of specific measure aims at protecting plant, animal and human health and life, or agriculture sector and farmers in the importing country. Notwithstanding the need for SPS measures stipulated under the Agreement, it is the temptation and tendency of IACs for using SPS measures, at times higher than stipulated in the Agreement and thus beyond the extent required, to impact access of DCs to their markets, which blocks the (little) trade opportunities DCs (may) have in agriculture sector exports. This defeats the very premise of the Agreement as (such) measures tantamount to disguised and unjustifiable barriers to trade.

Yet an other Agreement namely, Agreement on Technical Barriers to Trade (TBT) is designed to ensure that products requirements do not act as unnecessary obstacles to trade.

TBT principles are:

• Non-discrimination;

• Harmonization;

• Transparency

• Avoiding obstacles to trade

But, as we witness these technical requirements too are being used as barriers.

On one-hand subsidies, quotas and high tariffs being widely applied for especially sensitive products, particularly related to agriculture and other tropicalproducts, which are of interest to DCs; the disguised and unjustifiable barriers to trade in the form of (unnecessary) health and environmental standards on the other are impacting the market access opportunities.

Trade liberalization under WTO thus poses big problems to DCs like Pakistan. These countries, for example, have been subjected to a situation where they ought to reform their economies, at huge cost, as to reorient and readjust to globalization of economic activities in general and to WTO regime in particular. Limited capacity of developing countries, particularly in the area of SPS related issues; and their socio-economic conditions further impact the trade opportunities.

DCs, like Pakistan, lack in capacity in terms of regulatory, human resource and research & quality infrastructure as to cater to quality management requirements under SPS/TBT Agreements and enforce food safety regulations.

Fact remains that their access to knowledge, capital and technology too impacted because of (their) socio-economic conditions on one hand and fiscal and monetary austerity measures followed by the government. This situation worsens because of non-willingness of IACs to transfer technology to DCs.

In this scenario, countries like Pakistan may not be able to meet the quality demands of IACs. Naturally, if developing countries products fail to meet prescribed standards, they stand to face problems in selling their produce to IACs.

Given the prevailing tendency on part of IACs, consumers health standards serve as ideal barriers, in pursuing their protectionist goals. The interest of DCs like Pakistan thus is compromised. Simultaneously, the health of DCs consumers is threatened because of the risk associated with dumping of unsafe food products in these countries, as these countries lack in necessary regulatory control. DCs also lack in financial resources, as stated earlier, to develop technical capacity in this area. Further, IACs have not honored their pledge to provide technical and financial support to DCs like Pakistan to build their capacity in this area, as envisaged under the Agreement. As such the perils of WTO regime are likely to weigh heavier than promises, and thus fall heavy on countries like Pakistan. Pakistan, therefore, need to save her people from this (possible) onslaught, using following two-pronged approach:

1. Pakistan, in coalition with other DCs must press hard on IACs to extend the technical and financial support, promised in the Agreement, and to invest in food quality & safety programs e.g. food contamination monitoring system. The stages in the production-distribution chain, at which contamination and threat to food safety may occur, are:

• Production

• Distribution

• Processing & storage

• Wholesale and retail sales, and

• Household storage and preparation.

Investment initiatives on the part of Pakistan government, in institutionalizing Hazard Analysis and Critical Control Points (HACCP) programs, would be rewarding in this regard.

2. To help build national capacity with the view to empower country to participate successfully in global trade, while safeguarding health of consumers, protecting health and life of plant, animal and humans, development cooperation needs to be focused on following areas:

• National capacity building in the area of quality infrastructure & management.

• Consumer's awareness of quality & safety issues. Consumers in this regard need to be educated to use their market power to enforce their demand on supply e.g. GMOs related issues.

• Producers should master application of principles & technology of production, storage and processing of (healthy) foods, which are free from pesticides, toxins and pathogens.

• Harmonization of standards and equivalence arrangements with trading partners in general and at regional level in particular.

In this regard an institutional arrangement in the form of National Animal & Plant Health Inspection Services (NAPHIS) was agreed to by authorities with the view to manage change, which due to knit wits of the system couldn't see day light.

Lastly, assistance needs to be provided by IACs to countries like Pakistan through technical / development cooperation, as it shall in turn help these countries participate in global trade, and also safeguard their population and resources from health-related risks associated with globalization of food & agricultural trade.

(The author is National Co-coordinator (WTO), Pakistan Agricultural Research Council/ Pakistan's National Enquiry Point on SPS/TBT. For detailed Profile of the author, please click on Our Experts on the top of this page).