WTO Regime and National Food Safety and Quality Imperatives: An Agricultural Perspective

WTO Regime and National Food Safety and Quality Imperatives: An Agricultural Perspective

Syed Wajid H. Pirzada

The Uruguay Round (UR) of Multilateral Trade Negotiations, which ended in 1994, established WTO to replace the General Agreement on Tariff and Trade (GATT).

The UR negotiations were the first to deal with the liberalization of trade in agricultural products, an area earlier excluded from previous rounds of negotiations. The UR also included negotiation on reducing non-tariff barriers to international trade in agricultural products and led to two binding agreements:

1. The Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement).

2. The Agreement on Technical Barriers to Trade (TBT Agreement).

Both these Agreements recognize the standards, guidelines and other recommendations of Codex Alimentarius Commission (CAC) as the specially identified baseline for consumer protection. This paper, therefore, seeks to address the issues related to SPS and TBT, including CAC standards and their implications for Pakistan, as these agreements are to be applied by all WTO members including Pakistan.

These are even applicable to countries that are not WTO members. With this background, we would like to discuss CAC standards and their application in relation to SPS and TBT Agreements.

The SPS Agreement

The SPS Agreement confirms the right of WTO member countries to apply measures necessary to protect human, animal and plant life and health.

Notwithstanding the need for application of national measures to protect human, animal and plant life and health, the national SPS measures had become, by design or accident, effective trade-barriers.

And as the UR negotiations address the issue of non-tariff barriers, as such, the SPS Agreement sets new rules to ensure that national SPS measures are consistent with obligations prohibiting arbitrary or unjustifiable discrimination on trade between countries. The SPS Agreement requires that, with regard to food safety measures, WTO Members base (as discussed above) their national measures as adopted by FAO/WHO Codex Alimentarius Commission where they exist. Furthermore, the SPS Agreement calls for programme of harmonization of national requirements based on CAC standards. This work is guided by WTO Committee on SPS measures, to which the representative of CAC, the International Office of Epizootics (OIC) and the International Plant Protection Convention (IPPC) are invited.

The SPS covers all food-hygiene measures and food-safety measures, such as control of veterinary residues, pesticide residues and other chemical/food additives used in food production.

The TBT Agreement

The objective of the Agreement is to prevent the Member countries using national or regional technical requirements, or standards in general, as unjustified technical barriers to trade. The TBT Agreement basically provides that all technical standards and regulations must have a legitimate purpose and that the impact or cost of implementing the standard must be proportional to the purpose of the standard. It provides that:

If there are two or more ways to achieving the same objectives, the least trade-restrictive alternative should be followed.

The TBT Agreement places emphasis on international standards, the WTO Members being obliged to use international standards, or parts of them, except where the international standards would be ineffective or inappropriate in the national situation.

The Agreement covers standards relating to all types of products, including industrial and agricultural products, with the exception of aspects of food-standards relating to SPS measures, such as products contents-requirements quality packaging and labeling, etc. this Agreement includes numerous measures to protect the consumers against deception and economic fraud.

The CAC

In the aforementioned context, the CAC standards, guidelines and other recommendations take on unprecedented prominence and importance, with respect to both consumer protection and international food-trade. It is therefore, advisable to understand both the CAC's working and its standards, guidelines and recommendations in greater detail. The CAC is an intergovernmental body established by FAO in 1961. Since 1962, it has been responsible for implementing the joint FAO/WHO Food Standards Programme, whose primary aims are to protect the health of consumers and to ensure fair practices in the food trade. It has 158 Member Governments, as on August 31, 1997.

The Codex

The Codex Alimentarius (a Latin word meaning "Food Code" or "Food Law") is a collection of food standards, codes of practice and other recommendations, presented in a uniform way. Codex standards, guidelines and other recommendations ensure that food products are not harmful to consumers and can be traded safety between countries or, in world; it facilitates international trade in food.

As discussed above the food safety standards are defined in SPS Agreement as those relating to food additives, microbiological norms, veterinary drugs and pesticide residues, contaminants, hygienic practices. Codex food-safety standards are to be used by WTO as the reference point for the WTO in this area.

There are more than 300 codex standards, guidelines and other recommendations relating to food, whether processed, semi-processed or raw, quality, composition and safety. It evaluates the safety of over 760 food-additives and contaminants, setting more than 2,500 maximum limits for pesticide-residues and more than 150 veterinary drug residues. In addition, CAC has established a number of guideline levels for a number of environmental and industrial contaminants in food. The first Codex was published in 1981 and the 2nd in 1998. The 2nd edition is now being revised and updated to take into account decisions made by the 21st session of CAC, July 1995.

The standards and maximum limits for residues of pesticides and veterinary drugs in food and feeds: IT has taken a number of years to develop the Codex. Maximum Residue Limits (MRL) and Extraneous Maximum Residue Limits (EMRL) are generally consistent with the recommendations of the Joint FAO/WHO Meeting on Pesticide Residues (JMPR). The JMPR is composed of independent scientists who serve in their individual capacities as experts, but not as representatives of their governments or organizations. The standards and maximum limits for residues of pesticides and veterinary drugs in foods and feeds, accompanied by an appropriate communication, are sent for action to Ministries of Agriculture or Ministries of Foreign Affairs, as appropriate, of Member Nations of FAO and the Ministries of Health of Member States of WHO.

These standards and maximum limits of CAC for residues of pesticides and veterinary drugs in food and feeds are the product of a wide measure of co-operation and international agreements. Moreover, they are compatible with the norms considered by FAO and WHO as best guaranteeing the protection of the health of consumers as well as facilitation of international trade in food. It, therefore, would be in the fitness of things that Pakistan builds its capacity and ability to not only apply the international standards adopted by CAC, but also harmonize its national standards with international standards, which shall help facilitate her trade with the countries of the region and globally.

The Basis for Establishment of Codex MRL:

The codex MRLs are established only where there is supporting evidence concerning the safety/danger to humans of the resulting residues, as determined by the Joint FAO/WHO Meeting on Pesticide Residues and this implies that Codex MRLs represent residue-levels, which are toxicologically acceptable. The Codex MRLs are recommended on the basis of appropriate residue data obtained mainly from supervised trials. The residue-data, thus obtained, reflect registered or approved usage of the pesticide in accordance with "good agricultural practices".

As Codex MRLs cover a wide spectrum of use-patterns and "good agricultural practices" and need to reflect residue-levels closely following harvest, they may occasionally be higher than the levels of residues found in national surveillance programmes.

Basis for Establishment of Codex EMRLs:

The MRL refers to residues of compounds, which were used as pesticides, arising from environmental contaimination (including former use of agricultural pesticides or uses of these compounds for other than agricultural uses). These residues are treated as contaminants. Codex MRLs need to cover widely varying residue-levels in food, reflecting differing situations in respect of contamination of food by environmental and persistent pesticide-residues. For this reason, Codex EMRLs cannot always reflect strictly the actual situation of residue existing in given countries or regions. Codex EMRLs, therefore, represent acceptable residue levels, which are intended to facilitate trade in food while protecting the health of the consumers. They are established only when there is supporting evidence concerning the safety to humans of the residues, as determined by the Joint FAO/WHO Meeting on Pesticide Residues.

Codex MRLs/EMRLs and Consumer Protection - Determination of Total Daily Intake of Pesticide Residues:

The primary purpose of setting maximum limits for pesticide-residues in or on food and (in some cases) in animal feeds, is to protect the health of consumers. Codex MRLs and EMRLs serve that purpose, as they help to ensure that the maximum amount of pesticide applied to food is consistent with real pest-control needs. Codex MRLs are based or residue-data from supervised trials and not directly derived from Acceptable Daily Intakes (ADIs). Which are quantitative expressions of acceptable daily amounts of residues which persons may ingest on a log-term basis and which are established on the basis of appropriate toxicological data, mainly from animal studies.

Codex MRLs/EMRLs for Milk and Milk Products:

Codex MRLs/EMRLs for fat-soluble pesticide-residues in milk and milk products are expressed on whole-product basis.

For a "milk product" with a fat-content less than 2%, the MRL applied should be half those specified for milk. The MRL for "Milk products" with a fat-content of 2% or more should be 2.5 times the MRL specified for milk, expressed on a fat basis.

Codex MRLs/EMRLs for Processed Foods:

As a rule, Codex MRLs and EMRLs are established for new agricultural commodities. However, where it is considered necessary of consumer protection and facilitation of trade, MRLs and EMRLs are established for certain processed foods on a case-by-case basis, taking into consideration information on the influence of processing on residues.

Residue Data and the Developing Countries:

JMPR in its meeting held at FAO, Rome recognized the limitation in expertise and resources prevailing in many developing countries. It concluded that, within a relatively short period of time, reliable residue data could be generated in several developing countries having appropriate laboratory capacity, by providing assistance for the introduction and implementation of quality control and quality-assurance principles in their laboratories, and for execution of supervised field trials, in compliance with Good Laboratory Practices (GLP).

The major part of this assistance would be related to the transfer of accumulated knowledge and experience, and interested countries should explore their possibilities of obtaining the necessary support. For theoretical and practical training in this subject, the JMPR recommended the use of recently established FAO/IAEA Training and Reference Center, for which FAO and other organizations could provide the necessary assistance, if interested countries so request.

Veterinary Residues:

Veterinary residues that remain in the tissues of food-predicting animals, after treatment, create on the major problems associated with the veterinary use of such drugs. This problem stems from the difficulty of defining "safe concentratin" of the agents in meat or milk for human consumption, and is compounded by the increasing sensitivity of detecting methods. In addition, milk for processing to cheese and similar products must not contain drugs that inhibit bacterial growth.

Public Health/Consumer Protection:

The human-health risks from the ingestion of small quantities of antibiotics are hypersensitivity reactions, other toxic effects, and possible effects on microflora. According to a report, even in a developed country like USA, it was estimated that 14% of all meat and poultry samples, tested over a two years period, contained illegal and potentially harmful residues of pesticides and other drugs.

About 4% to 7% of the human population is hypersensitive to penicillin; about 0.04% develops acute anaphylactic shock when the drug is encountered and there are reports of hypersensitivity reactions after the ingestion of penicillin-contaminated milk. Nondose-related a plastic anemia caused by choloramphenicol in humans is another potential hazard of antibiotic contamination.

The effect of low concentration of antibiotic ingested in contaminated meat on the resistance and composition of human microbial flora is probably negligible. Whereas certain antibiotics are degraded by freezing, cooking or storage, such degradation is not completed, and for some antibiotics it is minimal. The toxic effects of antibiotics it is minimal. The toxic effects of antibiotics in humans increases with the concentration and duration of exposure; the small quantities likely to be consumed by the average person over the course of a year, as a result of ingesting animal products contaminated with antibiotics, are unlikely to have any significance, with rare possible exceptions, as discussed above, of penicillin and chloramphenicl. Nevertheless, it is difficult to define these risks because antibiotics and their degradation products may have carcinogenic, mutagenic and teratogenic, or other effects.

Codex Committee on Residues of Veterinary Drugs in Foods (CCRVDF):

In response to a growing concern about mass-medication of food producing animals and the implications, as discussed above, for human health and international trade, a Joint FAO/WHO Expert Consultation on Residues of Veterinary Drugs was convened in Rome, in Nov. 1984. This led to establishment of a specialized CCRVDF, which at its first session in Washington, DC, in November 1986, made a number of recommendations and suggestions for consideration by Joint FAO/WHO Expert Committee on Food Additives (JEFCA). Consequently, the 32nd JEFCA meeting was entirely devoted to the evaluation of residues of veterinary drugs in foods; subsequently a series of nine meetings of JEFCA were also dedicated to evaluation of veterinary drugs.

Methods of Detecting Veterinary Residues:

The methods used for detection of antibiotic residues are mainly microbiologic, with confirmation by electrophoresis and chemical methods (mainly high-performance liquid chromatography). Such methods employ sensitive bacterial strains (e.g. sarcina Lutea, Bacillus subtitis). The 10th session of the CCRVDF held in San Jose, Costa Rica (Oct-Nov, 1996) revised the priority list of veterinary drugs requiring evaluation. The drugs evaluated during the 48th meeting of JEFCA included these compounds except Gentamicin. The evaluation appraisals take into account the results of pharmacokinetics, metabolism and tissue residue depletion studies.

Coping Strategies: Coping strategies will rely heavily on judicious and rational use of agricultural pesticides and veterinary drugs. This, in turn, warrants regulatory interventions, on the one hand, and institutional arrangements for monitoring and testing, on the other.

For instance, USA established a computerized Residue-Avoidance Data (FARAD) Bank for food-animals. The Pharmacokinetics data is available to veterinarians on inquiry. Rational therapeutic decisions by veterinarians offer a key to control veterinary residues in food and safeguard public health and thus protect consumers.

Recommendations

i. Capacity building in the area of testing and monitoring of pesticides and veterinary drugs.

ii. Development of core human-resource in the area of food-safety and quality control/Veterinary Public Health.

iii. Rational policy for import and use of agricultural pesticides and veterinary drugs.

iv. Training/advocacy in the area of rational therapeutics for veterinarians and good agricultural practices for agronomists.

v. Institutionalizing the optimization of drug, therapy, through Therapeutic Drug Monitoring (TDM) service in veterinary medicine TDM laboratories require:

• Understanding of the pharmacology of the drug being administered.

• Some information on the Pharma cokinetics of the drug in the normal animal.

• The effect of various clinical conditions on drug-disposition. TDM is a complex service and several individuals, including clinical chemist, veterinary clinical pharmacologist and veterinary clinician/practitioner, need to be involved in the proper collection and interpretation of data.

vi. Research studies on pesticide/veterinary drug residues.

vii. Consumers protection associations.

viii. Consumers educating programme.

ix. Harmonization of standards with international standards/CAC.

x. GO-NGO-Private sector partnership in the area of food-safety and quality control.

xi. Structural adjustments in agriculture, in the context of WTO regime.

(The author has recently joined as consultant in Pakistan Council for Science & Technology, Islamabad).

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).

Trade Liberalization under WTO-I

Trade Liberalization under WTO-I

Syed Wajid H. Pirzada
E-mail: wajidpirzada@hotmail.com

The GATT reached in Geneva in 1947 aimed at creating a framework that would regulate international trade and stimulate international commerce. The World Bank and the IMF, established in Bretton Wood's in 1944 to deal with matters of international finance, were associated initiatives. In addition to these two BWIs, policy makers then also envisaged formation of an International Trade Organization (ITO) that would oversee international trade and enforce a framework of rules. The GATT continued to be governed by provisional and interim measures and remained an Agreement without a formal organization to enforce it.

The signatories to GATT, known formally as Contracting Parties [CPs]-rather than Members, applied the GATT according to the Protocols of Provisional Application (PPA), and the secretariat, that administrated. The GATT, kept the title of Interim Committee of the International Trade Organization (ITO).

These provisional arrangements persisted up until 1994, when the final Act of the Uruguay Round (8th Round under GATT) eventually led to the establishment of WTO on January 1, 1995. The final Act, formally known as WTO Agreement, embodied results of UR negotiations. Presently 148 Members including Pakistan, are signatory to this Agreement, as WTO Members It is worth pointing that Pakistan was one of the [GATT]CPs and became Member of WTO on its inception in 1995, when GATT negotiation concluded at the Marrakech Ministerial Meeting under GATT, and CPs accepted the Marrakech Agreement, establishing WTO.

3.1. Agriculture and GATT

It was not until the UR (1986-1994) that agriculture, as a sector, was eventually placed firmly on the GATT negotiating table, the UR launched in 1986, envisaged following objectives with regard to agriculture "To achieve greater liberalization of trade in agriculture and bring all measures affecting import access and export competition under strengthened and more operationally effective GATT rules and disciplines".

An important element of the declaration was its explicit recognition of the effects that domestic agricultural policies have on trade. During UR, agriculture was finally fully drawn under umbrella of GATT and UR Agreement on Agriculture (URAA) was reached. Under URAA, countries agreed to substantially reduce agricultural support and protection in the areas of market access, domestic support and export subsidies. These three sets of disciplines on agricultural policy sometimes referred to as "three legs of stool" work in an interdependent and mutually reinforcing way, support the liberalization of agricultural trade sought under URAA.

3.2. Commitments under URAA

The primary objectives of URAA, now WTO/AoA, were to reform the principles of and disciplines on agricultural policy as well as to reduce distortions in agricultural trade caused by agricultural protectionism and domestic support. These forces have become very strong, as developed countries have sought means of protecting their agricultural sectors from the implication of unfettered markets. Historically, the developed countries have provided high protection through ingenious forms of trade barriers. Farm policies in the North, intensified farm support in the farm of subsidies responding to secular trend in agriculture in these countries, having fewer and fewer farmers on one hand and by extending protection on the other.

This raised farm incomes in those countries and gave the farmers signal to produce more. As most of the countries in the developed world were pursuing almost the same policy of domestic protection and support to their agriculture, the production outpaced the demand in local markets. At the same time these countries failed to capture a sizeable and sustainable market niche in the global markets to sell additional produce by the farmers. Nevertheless, their governments pursued a policy of favoring increase in their countries share in the global markets by subsidizing exports. Consequently world market for agricultural products became highly distorted.

Because of protectionism and support by developed countries, they developed artificial comparative advantage and started dumping their produce, through export subsidies, in DCs. The resulting price disincentive often compromised agricultural production, threatened livelihood of large sectors of population in DCs, whose income were derived from agriculture, and made many countries increasingly dependent upon cheap imports. This was, however, often of benefit to urban consumers in these countries, who have a political clout, and their governments pursued policies that satisfied urban consumers. This helped north to continue these policies to the disadvantage of poor farmers in South.

3.3. Pakistan's Commitments

A. Market Access: As signatory to UR, Pakistan has committed to bind around 33% of its tariff lines compared to earlier policies of no tariff binding at all. Around 81% of the country's agricultural import tariffs will be bound, most at ceiling rate % 100 percent. Tariff on tea, wheat, maize and sugar are bound at 150 percent. The ceiling rate for betel nuts is 200 percent. Various agricultural lines remain non-bound, mainly applying to alcoholic beverage, swine and pig meat and its products since Pakistan is an Islamic country.

Pakistan is committed to abolishing import licensing for most goods, allowing foreign companies to engage in export trade, converting non-tariff in to tariffs, reducing maximum and increasing minimum tariffs, incorporating the various ad hoc import taxes in the custom duties, and reducing the numerous duty exemptions (CGPRT Working Paper 44). Accordingly, since 1986 (base period) Pakistan has reduced Maximum Tariff Rates (MTRs) from 225% in 1986 to 25% in 2002.

I These high levels of binding were adopted in order to safeguard, import-competing agricultural sectors, in the short run from possible disruption as non-tariff barriers. (NTBs) were to be removed. Since, Pakistan offered "ceiling bindings" no commitment was required to reduce the tariffs during the UR implementation period (FAO, 2000). The tariff bindings, in respect of Pakistan are listed in the Table - 38, given below.

B. Domestic Support:

As indicated earlier, on reduction commitments, Aggregate Measure of Support (AMS) was subject to reduction. AMS is a measure that quantifies, in monetary terms, certain aspects of the support provided by the agricultural policies.

According to one estimate, EU accounted for most agricultural export subsidies in 1996, as out of $8.4 billion worth export subsidies 83.5% were provided by EU, 8.5% by South Africa, 4.4% by Switzerland 1.4% by US and 2.2% by rest of the world.

The support and protection of farm sector continues under EU's Common Agricultural Policy (CAP) that has roots in the 1960s, where West Germany and France moved to create Common Agriculture Policy. Recent reforms in CAP are but a preemptive step, on lines of 1992 CAP reforms as a result of Blair House Accord, now in the face of likely deal between US and EU. According to the Economist (July 13, 2002) "Since its inception CAP has been one of the biggest public policy disasters in the rich world. It has been hugely expensive for tax payers and consumers.

It takes up half of the EU's budget, although farmers are less than 5% of the work force. It keeps food prices in Europe far above world levels. It has produced big surpluses that have been exported with subsidies. It has badly hurt farmers in poor countries, who have not only seen exports shut out by European tariffs but also suffered at home from dumped surpluses".

It further adds that "the second is the US, for years one of the chief critics of trade-distorting farm protection. Now the Americans have approved a new Farm Bill that not only vastly expands farm subsidies, but also against the European trend, links them more closely to production. Besides being an egregious waste of American's money, the farm bill is sure to make the negotiations under Doha (Work Program) for harder".

President Bush in 2002 signed the Farm Security and Rural Investment Act of 2002, the latest in a series of farmer support legislation going back to 1933. Critics say that the law, which increases spending by more than 70%, will further undermine the faltering free movement of trade (Scientific America). According to the J.B. Penn, the Under Secretary of Agriculture USA "the Farm Bill contains few new incentives to expand overall acreage or to encourage crop shift. Charges that the new law provides a radical increase in spending fail to recognize that congress approved assistance package boosting farm income by roughly $7.5 billion in each of the past four years.

The farm bill continues support at almost exactly the same level: $ 7.4 billion per year. It is thus hard to argue that we will see any supply response that we have not already seen in the past four years. The only significant difference will be that our farmers are now able to plan for the long-term. The Bill is also completely within our WTO obligations. Our domestic support ceiling is relatively low at only $9.1 billion, compared with $31 billion for Japan, and $62 billion for EU (the Economist July 20 th , 2002) farm subsidies are properly the domain of the new round of world trade talks launched in Doha, but are also a source of much hypocrisy.

It is outrageous that rich countries preach free trade to the poor while lavishing over $ 300 billion a year on their own farmers. Despite its recent increase in production subsidies for agriculture, he US recently put forward a welcome long-term proposal for reducing subsidies for agriculture, much pooh-poohed in Europe. The Johannesburg summit offers a fresh opportunity to embarrass the Europeans into taking the proposal seriously, and to get all sides committed to a broader dismantling of subsidies in Doha Round (the Economist August 31, 2002).

In sum, although just 4% of EU's population works in agriculture, subsidies for farmers are budgets biggest single item. The $33 billion dispensed every year through CAP, consumes almost half of the EU spending, the EU likes to boast that it has largest aid budget in the world. But its own farm policy inflicts massive indirect damage to the world's poor. The new American Farm Bill will grant $190 billion of old style production subsidies to American farmers over ten years. In US only farmers who produce certain crops benefit from subsidies: growers of corn, wheat, oilseeds, rice and cotton got more than 90% of payments in 1999, yet they accounted for less than 36% of total agricultural output.

All farmers, however, can benefit USDA programs, including those for conservation and subsidized crop insurance. The prices of some crops, such as sugar, are kept high by restrictive tariffs of the estimated 1.9 million farms in US, those with $ 250,000 or more in sales - about 7% of the total number - received 45% of direct federal subsidies in 1999. CAFOD Trade Justice Campaign finds European trade rules crazy, and has observed "Did you know that Europe's 21 million dairy cows could take a luxury round - the world trip for the amount European governments spend subsidizing their farmers every year.

It means European cows receive more income per day than the 3 billion people in the world, who live on less than US $ 2 a day. It's your money that's paying for there subsidies under Europe's CAP. The CAP adds an average of £ 16 to a British family shopping basket every week. Yet, most of that money ends up in the pocket of Europe's richest farmers. The Duke of West Minister - one of the Britain's richest men - receives over half a million pounds in subsidies every year. To add insult to injury, the high subsidies paid to EU farmers lead to the dumping of artificially cheap food on world markets, with devastating consequences for third world farmers.

Milk production in Jamaica has dropped up to a third since 1995 because EU milk powder has flooded the local market. Jamaica dairy farmers have been forced to throw away thousands of litres of milk. As a result, many have lost their jobs and their livelihoods, while millions of small farmers in the developing world struggle to survive on less than £ 260 per year, European farmers are getting an average of £ 11, 500 in subsidies. Today Indian dairy farmers feel threatened because of EU's subsidies in dairy sector that can inflict severe harm to the Anand's model white revolution, a cooperative dairy set up in India. Pakistan is 5th largest milk producing country with relatively low cost of production i.e. 9$/100kg milk and net margin of profit of 18%.

Its dairy sector too feels insecure in the wake of trade liberalization as milk powder is already being dumped in the country by EU through subsidized exports. Such huge subsidies mean an unfair playing field for DCs. Up to 80% of the population in the World's poorest countries rely on agriculture to make a living, while in Europe just over 4% of the population works in farming. And in Britain, farmers make up just 1% of the work force. These facts lead us to the following conclusions.

• That there are growing inequalities in trade, agriculture and food security, which are but harsh realities of globalization.

• Mr. Ha-Joon Chang, in his productive study titled "Kicking away the ladder" while examining the great pressure on DCs from the developed countries, find that the economic evolution of now- developed countries differed dramatically from the procedures that they now recommend to poor nations. His conclusions are compelling and disturbing "developed countries are attempting to "Kick away the ladder" by which they have climbed to the top, thereby preventing DCs from adopting policies and institutions that they themselves used".

This is particularly true of CAP and US farm support, which even today, they are not ready to change. "Farming may be the oldest of economic activities. It also accounts for an ever decreasing share of rich countries output and employment. So it is strange that agriculture should now lie at the heart of two big global powers, of the next year or so.

But so it does; and has the crucial importance of recent proposals by the European Commission to reform the EU's CAP. There is the rub, the Commissions plan will be fought tooth and nail by countries that benefit from the CAP, and this was what they did at Cancun Ministerial by taking a hard line on the issue of subsidies.

Thus, be it trade-liberalization under SAPs or now under WTO, didn't take in account those disparities that had led to an uneven playing field for DCs, like Pakistan, which had been compelled under these arrangements to open the markets unilaterally by doing away with subsidies and scaling down the tariffs, while distortions in the world market remained in place.

Least Developed Countries (LDCs) do not have to reduce tariffs or subsidies the base level for tariff cuts was the bound rate before January 1, 1995; or unbound tariffs, the actual rate charge in September 1986 when U R began. Only the figures for cutting export subsidies appear in the Agreement. The other figures were targets used to calculate countries legally binding "Schedules of commitments. Each country's specific commitments vary according to the out come of negotiation. As a result of those negotiations, several DCs chose to set fixed bound tariff ceilings that do not decline over years.

AMS are considered to have significant effect on the volume of production, both at the production level, and at the level of agricultural sector as a whole. Market price support is a major component of the AMS calculations, that are calculated for each commodity and for non-specific support there is clause in AoA on de minimis exemption, which allows any support for a particular commodity (or non-specific support ) to be excluded from total AMS calculations, if that support is not greater than a given threshold level. Thus, an additional exemption is contained in the provisions of the Agreement, in the following circumstances:

• Where the value of total domestic support, for particular commodity, is not greater than 50% (10 % for developing countries) of the total value of production of that product, then support need not be included

• The same provision applies for non-product specific support. It is provided that its value should not exceed 5% (10% for DCs) of the value of total agricultural production, then; it too may be excluded from the In short, the 10% de minimis commitment for DCs means that as long as price support is less than 10% of the value of production then policy will be in compliant with the AoA.

In the UR, Pakistan submitted details of its domestic support measures, in the various areas specified in the AoA, in its country schedule. The Country Schedules comprised a statement by each Member government, on a commodity by commodity basis, of their positions of each of the areas, under AoA (tariff, NTBs, domestic support and export subsidies), prior to the implementation of the provisions of the Agreement, together with an outline of how the provisions will be achieved.

The process of submission of Schedules followed by their verification ended in April 1999. Once the verification process was complete the Schedules were submitted to GATT. Pakistan's submission covered 11 crops, for which there was market price support program in the base period (1986-88). The total product specific AMS in that period was negative i.e. Rs. 11524 million (US $ 640), with positive AMS only for sugar cane. The total AMS amounted to negative 7.6 percent, of the total value of agricultural production, with wheat, cotton and rice together accounting for most of the negative support. (FAO, 2000).

The total subsidy on farm inputs for the base period was notified as having been Rs. 36252 million ($ 203 million), 43 % of which fell within non-product specific AMS and 57% under SDT.

As regard's the SDT subsidies, where the total outlay was Rs. 2055 million (US $ 116 million) in 1986, 88, 67% was on fertilizer, 32% on credit and 1% on tube wells. In Pakistan's notification, tube well subsidies were justified under the SDT category, as being part of the national strategy for agricultural and rural development. The 74% of the total subsidy on fertilizers that was reported under the SDT category benefited the poor farmers, with land holdings of less than 5 hectares. Thus, on the whole there are hardly any consequences for Pakistan in respect of reduction commitments. The base period product specific AMS was negative (or zero, from the AoA viewpoint) for crops bar sugarcane, which itself was within the de minimis level, as was non-product specific AMS. (FAO, 2000).

C. Export subsidies, taxes and restrictions:

Pakistan did not notify the existence of any export subsidies on agricultural products and accordingly can not resort to them in the future. As regards the entitlement to provide subsidies to reduce the cost of marketing, export and internal transport as well as freight charges on export shipments, it notified relevant expenditure for 1995-96 to 1997-98. These consisted of a 25% subsidy on actual freight paid to exporters on export consignments of fresh fruit and vegetables, amounting to $ 1.7 million in 1995-96, $ 2.3 million for 1996-97 and $ 2.8 million for 1997-98.

Prior to establishment of WTO Pakistan, however, provided (occasional) direct export subsidies. In this regards, export of rice and cotton were subsidized, when export trade was with the public sectors, but the subsidy was abolished when the private sector was permitted to trade in these products (FAO, 2000).

Implementation and Impact of AoA:

As pointed out earlier many DCs including Pakistan implemented Structural Adjustment Programs (SAPs), in conjunction with BWIs loans. The SAPs involved substantial trade liberalization accompanied by fiscal and monetary austerity. As such, effects specific to the implementation of the UR results, and for that matter of AoA, are difficult to identify and distinguish from other events, such as earlier SAPs. For example, as result of SAPs implementation, many DCS, including Pakistan, had very low or zero AMS in 1986-88 base period. Similarly, currently the average applied tariffs in DCs varies from 10 and 20%, which in Pakistan's case are 25%, considerably lower than 20-60% range of decade ago.

Tariffs applied to food stuffs are very close to the general tariffs (CEPAL, December 1997). It is natural, that with subsidies being done away and tariff dismantled, the low-income food deficit countries are concerned that more liberal world agricultural markets will lead to higher import prices or reduce their food aid and reduced food security. Thus the likely impacts of the URAA, on the level and stability of market prices, raised food security concerns among DCs. It is in this context that during URAA many DCs viewed liberalization of world agricultural markets as a threat to their economic well-being and food security. (Valdese and Young, 1998).

An FAO (UN) study concludes, as to what had been the impact of the AoA on the DCs:

• With some exceptions, there was little evidence of the impact of the UR on the volume of trade and level of prices on the world market.

• There was little evidence of much change in world price instability.

• And by contrast, a part of the increased food import bills of the least developed countries (LDCs) and Net Food Importing Developing Countries (NFI DCs), as we have seen above in case of Pakistan, the two groups of countries mentioned in the Marrakech Ministerial Decision, referred to above, on measures concerning the possible negative effects of the reform program on LDCs and NFIDCs- could be attributed directly or indirectly to the UR related policy changes (Sharma, 2000).

Thus, the NFIDCs along with LDCs have been recognized as a special group among DCs that may be adversely affected by the process of liberalization of trade in agriculture under WTO. The NFIDCs, in particular, have certain features that distinguish them from other DCs, in terms of their dependence on food imports, insufficient food production, and level of malnutrition and balance of payment difficulties.

FAO models, for example, predicted that the implementation of AoA would bring about higher food imports that will grow by 62% in value terms for DCs as a whole, and by 15% of this increase would be due to AoA. The experience in the post-UR, as also confirmed by FAO study findings referred to above, thus for has confirmed many of these predictions, as illustrated below:

• The international prices have exhibited remarkable instability. The rice hike of 1995-96 was exceptional and comparable to the deviations during the world food crises in the early 70s. This instability in fact can be ascribed to the reduction of public stock holdings in the big producer countries. FAO estimates that private stocks will only replace about 40% of the reduction in public stock holdings.

• The 1995-96 price hike substantially increased the cereal import bills of the NFIDCs. The cost of cereal import of NFIDCs increased by 68% between 1993-94 and 1995-96.

• The longer - term trend in food aid level have shown a significant decline - the food aid comprised only 2% of total cereal imports by NFIDCs in 1997-98.

• The value of imports under subsidies, which accounted for as much as 46% of the total cereal import bills for the NFIDCs in 1994-95, has dropped to virtually nil since 1995-96.

• In the marketing year 1997-98, 5 of the 18 NFIDCs experienced food shortage and required emergency assistance (Kaukab, 2000). The participants of FAO Symposium on Agriculture, Trade and Food Security maintained that, in so far as empirical evidence was available, it indicated relatively minor quantitative effects for most of the DCs studied. However the qualitative effects have been significant.

The spirit of the AoA has profoundly altered the approach, government are taking towards agricultural trade policies, rural development and food security. (FAO, 2000). Specific observations included:

• For many DCs implementation of AoA has been less difficult than expected, thanks largely to domestic SAPs carried in 1980s, which anticipated the market -oriented trade reforms embodied in AoA.

• Several countries faced a situation, where the opening of the borders has resulted in rising food imports, whereas agricultural exports were still stagnating.

In the context of food security, as defined in 1996 World Food Summit (1996) "When all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active healthy life," a large number of DCs perceive liberalizing agricultural markets as threat to their ability to achieve this objectives. There is concern that LDCs and NFIDCs in particular will struggle to be able to afford the expected price increase for major agricultural staples such as rice and maize. Such price increase could be expected as liberalization would increase market access and import demand, while export supplies from countries with high support would be lessened (ABARE, 2000).

Other concerns in this regard are summarized below:

• The AoA is threatening and undermining sustainable agriculture, agricultural biodiversity and rights of small farmers and communities, particularly in the South. The shift in focus from producing food crops (to high value crops) in order to profit from export may also have serious implications for agricultural biodiversity. The resultant, intensive use, because of this shift, of herbicides and pesticides has a devastating impact on fragile ecosystems, biological diversity and human and animal health. The right of small farmers and communities, who for millennia have lived symbolically with biological diversity are seriously being threatened (Third World Network, 1999).

• For most of the DCS, except for Cairn Group members, Non-Trade Concerns (NTCs) involve issues of food security and rural employment; given that agriculture is the largest sector of rural employment. They do not accept the US or Cairn Group views that freeing the markets would facilitate imports that would provide food security.

• It will be dangerous for DCS to depend on imported food, as their foreign exchange position is often not comfortable, and the provision of food for the population is essential.

• Many developing countries have a large number of small farmers, who see farming activity will not be able to stand up to large scale of international competition. They need protection, otherwise there will be large-scale unemployment and spread of poverty in these countries.

• The implications for rural poverty and food insecurity in the South are enormous. Exposing rural producers to global markets under these circumstances poses a powerful threat to rural livelihood.

• Trade liberalizations will create many losers, but there will also be some winners. Among them will be the corporate giants, which control 3/4th of world trade in cereals. These companies depend upon (subsidized) access to surpluses in Europe and North America and upon access to 3rd world markets to sell these surpluses. There is confluence of elite interest here, corporations want access to northern surpluses for export to developing countries, southern governments want access to cheap food for cities and northern governments need dumping outlets.

• There is more hunger in the world today than ever before, with around one billion people living on inadequate diets. Whatever happens to the global food supply that number is set to increase because of the very nature of the market economy: when access to food depends upon money, poorer people are inevitably excluded from food markets and, by extension, from global food trade. International trade cannot change this in any meaningful way, since it responds to market signals rather than human needs but it can further compound the problem.

The surpluses generated by the capital-intensive food systems of the North have a highly destructive effect on the food systems of the South, destroying livelihoods, depressing markets and undermining investment in agriculture. These, in turn, reinforce the very structures of poverty behind global food insecurity, eroding the capacity to grow their own food or to purchase it (Third World Network, 1999).

Whereas, the aforementioned quantitative and qualitative impact of AoA on NFIDCs can be extrapolated to an NFIDC like Pakistan, a summary on these parameters, making a specific reference to Pakistan, will be presented later through these columns.

(The writer is national coordinator WTO in Pakistan Agriculture Research Council, Islamabad - Pakistan)

SPS Measures under the WTO: Effects on seed trade in Asia-IV

SPS Measures under the WTO: Effects on seed trade in Asia-IV

Syed Wajid H. Pirzada
E-mail: wajidpirzada@hotmail.com

Exotic seed as (potential) source of risk to plant, animal and public health: A review

Foreign germplasm will continue to be an important component of turf grass breeding programmes. Hundred of overseas pathogens are not found in the USA, and some have been responsible for major, economically devastating losses. Processing turf grass germplasm through quarantine will continue to be an important component of the US federal programme of safeguarding exotic germplasm introduction and eventual introgression.

Among the different consequences likely to be harmful as a result of the development of mould in grain and seeds, the contamination by certain mycotoxins represents a danger to animal and human health. An exporting country must be able to provide constructive and reasoned arguments in order to propose new legislation concerning these toxins.

Ten seed-borne pathogenic fungi of five vegetable seeds and one fruit seed, and the diseases caused by them on their respective hosts, have been recorded.

Mycotoxins have been found in four samples of seeds from 12 samples studied. In two of them, the toxin level exceeded the allowable concentration: Aflatoxin B-I - 15 mg/kg, and Zearalenon - 2,000 mkg/kg. Similarly, in three of five soya samples imported from Spain, Aflatoxin B-1 20, 30 mkg/kg was found, respectively, while in one, sterigmatosistin 150 mkg/kg was discovered.

Health hazards in man and animals posed by seed-borne and storage fungi could be in the form of allergic diseases and Aspergillus infections. Hazards due to toxins produced by field fungi include ergotism, fusaritoxicoses, pink rot dermatitis (Sclerotinia sclerotiorum) and lupinosis (Phomopsis leptostromiformis and Diaporthe woodii), while mycotoxicoses originating from storage fungi include aflatoxicoses, nephrotoxicoses and neurotoxicoses.

The discovery of mox virulent c morphotype of S. sapinea could have serious implications for the management of this pathogen as well as for quarantine practices in countries that import pine seeds.

Contamination of seed

Twenty weed species were found contaminating rice (Oryza Sativa L.). Farmers thought that Echinochloa Spp. spread via contaminated rice seed and that I. schaemum rugosum seed was largely soil-borne.

Over the past 400 years, plant immigrants have arrived in the US in huge number, as a result of accidental and deliberate introduction of a new range of acute and chronic environmental hazards for immigrants.

Before 1900, many new naturalised species were introduced repeatedly and widely into the US as seed contaminants, through extensive international commerce in crop seeds.

Analysis of soya seeds imported by Armenia, supposedly genetically modified, showed 11 species of fungi with contaminants from the genera Aspergillus, Penicillium, Stemphylium and Fusartium. The most specific diversity of contaminants has been exhibited in the samples from the US and Canada (seven species) and from Spain (five species).

Managing seed-related SPS (TBT) issues

It is in the long-term interests of the seed industry to proactively manage SPS/TBT-related seed industry issues that will help win markets with certainty and confidence. In this context, some relevant examples from the literature are reviewed below.

Management strategies used to minimise seed infection in the seed production field include cultural, chemical and disease resistance. Harvesting, drying, processing and storage operations can be used in minimising the spread, and in the eradication, of seed-bone pathogens.

Methods of controlling seed-borne pathogens methods include general management practices, biocontrol agents, fungicide applied to seeds and foliage, and thermotherapy.

Important factors that determine seed quality, expressed as a percentage, are the uniformity of germination as well as the presence of certain diseases in a seed lot. Although the physiological aspects of germination are of the utmost importance, the impact of seed-borne pathogens should not be ignored.

The amount of chlorophyll was related to the germination performance and the health status of seeds - the percentage of seed contaminated with Fusarium Spp. and Cochlio bows sativus, both known to affect germination, showed a relation with CF value - the sub-sample with the highest CF signals was always the most heavily infected. CF sorting of barley seeds improved their germination quality, not only on the basis of removing less mature grains, but also due to the removal of the seeds with the heaviest fungal infection levels (14).

Powdery mildew and leaf rust occur yearly in wheat growing areas of southeastern US. When seed was treated with triadimenol, the optimum time of foliar fungicide application for maximum yield response was delayed.

In laboratory and packing house experiments, treatment of potato tubers with steam or organic mercury reduced the incidence of the seed-borne pathogens. These results demonstrate that steam treatment can be an efficient method for disinfecting potato tubers, easily applied by packing houses to large volumes.

Treating planting materials with heat (thermotherapy) is a century-old method of disease control that has proved to be effective against various pathogenic microorganisms. When no efficient chemicals are known to control a disease, treating seeds by heat may be of great interest.

The precipitation, high temperature and humidity that accompany harvests of first and second seasons greatly reduced seed quality.

Wheat seed infection by Pyronophora triticirepentis occurred primarily after the early dough stage and was positively correlated with tan spot severity on the flag leaf shortly after anthesis.

A specific, highly sensitive and rapid PCR assay for the detection of Curtobacterium flaccum faciens Pv. Flaccum faciens (Cff) in bean seeds was achieved. Cff is a seed-borne bacterium on the EPPO K2 quarantine list. This procedure may be useful for routine diagnosis of Cff, overcoming the problems of conventional techniques .

The sensitivity of the Alternaria dauci - radicina selective medium (ADRSM) in detecting a radicina on carrot seeds was similar to other methods currently in use, but ADRSM was more sensitive than the other methods in detecting A. duci on infested carrot seeds.

Impact on sustainable seed trading

If SPS/TBT-related seed industry issues are not managed they can have an adverse impact on the sustainability of trade in seed in Asia in the context of the SPS regime under WTO. Some examples of possible impact in this regard are reviewed below.

Cotton is the main agricultural export commodity from Tanzania. The most significant disease of the crop is Fusarium wilt caused by F. oxysporum F. sp. Vasin fectum. Phytosanitary measures instituted at cotton ginners to prevent the distribution, for planting, of seed infected with the wilt fungus have become difficult to apply.

At the buying posts visited, there was no system for separating cotton varieties or for identifying seed cotton purchased from villages infected with fusarium wilt. As a result, seed subsequently distributed for planting is likely to be a source of infection for the spread of disease. The implication of economic liberalisation in the cotton sector is discussed with respect to seed distribution and management of fusarium wilt.

Phaeropsis sapinea is an opportunist pathogen of the pinus species and other conifers. Infection occurs when host trees are predisposed by adverse environmental conditions or mechanical damage. Breeders market oil palm seeds that are intended to provide users with high-yielding, quality planting material. Only seeds marked by breeders can secure initial investments involved in setting up or renewing an oil palm plantation.

Quarantine regulations can help manage SPS issues

It is through effective quarantine that Asian countries can manage the problem of exotic pest introduction. Some relevant examples are reviewed below.

Seeds of several crop from other countries that might be registered are in the prohibited quarantine category and can be introduced only under permit. The number of seeds needed for quarantined grow outs will vary depending on the class of registration.

When seed potatoes have been inspected and meet the requirements of the regulations under the Seeds Act, they can be certified and receive an official tag. For international movement, seed is re-inspected to ensure that it meets the import requirements of the importing country. At that point, a phytosanitary certificate is issued. Phytosanitary import restrictions are applied to prevent the introduction and spread of pests requiring quarantine.

Frequently, phytosanitary measures are viewed as technical barriers to trade, as zero risk means zero trade, and attempts are being made to apply more standardised criteria for pest-risk assessment. Countries are working through regional plant protection organisations such as NAPPO, EPPO and FAO to develop international standards.

Strict quarantine and inspection regulations ensure that bean seed crops are free from seed-borne diseases such as Halo blight (Pseudomonas syringae, p.v. phaseoli), Common Bacterial Blight (Xanthmonos campestris, p.v. phaseloi), Bacterial Brown Spot (Pseudomonas syringae, p.v.syringae) and Anthracnose (Colletotrichum lindimuthianum), and they allow a minimum infection with the bean mosaic virus.

Recommendations

• In the face of the upcoming WTO regime, access to international seed markets will have to rely heavily on the maintenance of seed standards in terms of quality, safety and genetic purity of seed stocks. Proactive engagement with the International Seed Testing Association (ISTA) will thus help to facilitate the seed trade in Asia, as it will help in selling seed in international markets with confidence and certainty.

• Asian countries can learn from experience of the Organisation for Economic Co-operation and Development (OECD) Seeds Scheme. The Scheme was commissioned in 1999 by the Seeds Industry Association of Australia and the Grains Council of Australia. It prescribes common rules for certifying seed for movement in international trade. This modality, if replicated in Asia, would place the regional seed industry in an enabling environment.

• Strategic planning to regulate, in a harmonised way, the regulatory framework, development of quality infrastructure and its accreditation, and human resource development at the Asian regional level, with a view to establishing a network in this region.

• Realising the importance of SPS/TBT standards, Asian countries and the Asia-Pacific Seed Association (APSA) need to engage proactively in the standard setting process and introduce health/quarantine security.

• The establishment of an Asian Seed Council (ASA) to manage seed certification and accreditation in the region is needed. For such an undertaking, regional governments, the seed industry and APSA may jointly provide initial funding.

• There is a need for capacity-building initiatives in the area of risk assessment, implying risk identification and characterisation, risk communication and risk management. Such a capacity at the regional level, inter alia, in the area of risk assessment of GM seeds, for example, would be rewarding as, for individual countries, it would be a costly proposition.

• The adoption of Hazard Analysis and Critical Control Points (HACCP) at the regional level. A standardised HACCP protocol for countries of the region would also help in securing markets once it has been adopted by trading partners.

Such initiatives at the regional level, together with similar initiatives for other sectors will help set the stage for building up Asia as a Regional Trading Area (RTA). This would be to the advantage of the countries of the region, keeping in view their socio-economic and technological conditions, which are complementary and supportive, in achieving the goal of RTA.

(concluded)

(The author is Director/Coordinator WTO, Pakistan Agricultural Research Council (PARC), Islamabad)

SPS Measures under the WTO: Effects on seed trade in Asia-III

SPS Measures under the WTO: Effects on seed trade in Asia-III

Syed Wajid H. Pirzada
E-mail: wajidpirzada@hotmail.com

Dispute settlement under WTO

While a member's ability to establish requirements to protect human, animal and plant life/health is not restricted, another member can challenge a specific requirement. Typically, a dispute arises if a member believes that another member either has taken some action that violates WTO trade rules or has not met its obligations as a member in some other respect.

The rules and procedures governing the settlement of disputes are set out in Annex 2 of the Agreement establishing WTO. Briefly, the dispute settlement procedures encourage the members involved to find a mutually acceptable solution through formal consultations. If consultations break down, the complaining party may ask the Dispute Settlement Body (DSB) to establish a panel to hear the dispute and recommend that the member bring its measure(s) into conformity with its obligations within a reasonable period. Either party may appeal the panel's findings on points of law and legal interpretation, but not on the science or evidence presented.

While the SPS Agreement is an imperfect instrument in a number of ways (for example, the meanings of many of the terms it contains are unclear), and it is to some extent uncertain what its full impact will be in the longer term, the early dispute settlement cases suggest a number of interim conclusions.

First, they indicate the SPS Agreement rules apply effectively to all WTO members and that they are enforceable.

Second, these cases have highlighted contentious areas of the Agreement that need to be clarified.

Third, these cases have highlighted the enormous costs involved in engaging in formal dispute settlement and the advantages, in terms of cost savings, and conformity to WTO rules. For example, the EU is subject to about US$ 150 million annually in retaliation measures following its failed defence of its ban on the import of hormone-treated beef from the US. Another example is the salmon dispute between Australia and Canada, which has made heavy demands on both countries' resources, with direct costs that exceed US$ 2 million.

Fourth, these cases highlight the advantages of using informal consultative processes to resolve SPS disputes.

Last, involvement in formal SPS dispute proceedings has the potential to damage the international credibility of a WTO member in terms of its commitment to the objectives and spirit of the SPS Agreement and other WTO obligations.

Some of the significant areas of the SPS Agreement that formal dispute cases have left unresolved include:

• What constitutes sufficient scientific evidence as the basis for an SPS measure?

• What constitutes an assessment, appropriate to the circumstances, of the risks to human, animal or plant life or health?

• How will the objective of consistency in the application of the appropriate level of SPS protection be achieved and verified?

The SPS Agreement has been in force for the past seven and a half years. Many countries are reforming their SPS measures/quarantine laws in order to conform to the WTO regime on SPS measures. They understand the consequences of non-compliance. It is likely that many of the trading partners might enter into equivalence arrangements in order to save them from the loss of markets.

Harmonization, equivalence and WTO law

The SPS 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 and agriculture industry from competition. The international SPS, guidelines, recommendations and standards, developed by CAC, OEI and IPPC have been mentioned specifically in this regard under the Agreement. The premise is the introduction and harmonization of SPS measures, based on science and aimed at providing protection from external risks in the form of pests, diseases carried by animals and plants, or health risks associated with food additives, contaminants, toxins or disease-causing organisms in food, beverages and feedstuff.

The members have the option of choosing or not accepting international standards, and they may as an alternative option 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, the SPS Agreement recognizes that WTO members may have different SPS measures for reasons such as geographic or climatic conditions and/or consumers needs.

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

The WTO Agreement on the application of SPS measures requires, under Article 4, that:

(a) Members will accept the SPS measures of other members as equivalent, even if those 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 will be given, upon request, to the importing member for inspection, testing and other relevant procedures;

(b) Members will, upon request, enter into consultations with the aim of achieving bilateral and multilateral agreements on recognition of the equivalence of specified sanitary and phytosanitary measures.

Yet another WTO Agreement i.e. Technical Barriers to Trade (TBT), addresses quality aspects, as against the health and safety aspects addressed under the SPS Agreement, in terms of the types of measures related to technical regulations, standards or conformity assessment procedures. The TBT Agreement also recognizes the concept of equivalence in Article 2.7, which requires that "members to 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 the regulations adequately fulfill the objective(s) of their own regulations".

Thus, the objective test for equivalence is to meet the health and food safety and quality objectives, as envisaged under the national regulations, with the view to affording a similar level of protection.

It is within this context that Asian countries, as a starting point, should study, evaluate and enter into equivalence arrangements in the area of SPS measures and technical regulations. This will help to harmonize SPS measures at the regional level. In addition, a regulatory framework, recognition of conformity assessment certification bodies, quarantine settings, a laboratory infrastructure, and human resource capacity and capability would be a prerequisite. Shortfalls, if any, need to be identified and deficiencies made up through collective, collaborative and concerted efforts.

This will help build up regional capacity in the area of seed quality and safety management, and thus promote intra-Asian trade.

Seed industry, international seed standards and Asian countries

Seed is the most important input into any crop or pasture. Seed is carefully assessed to ensure value for money and quality - varietal purity, physical purity and physiological qualities. Seeds comprise one of the most important commodities in international trade, in terms of potential productivity and, consequently, standards of living. Most crops throughout the world are dependent on seeds, and it is becoming increasingly important that scientific standards and directions be maintained.

Having discussed SPS and TBT standards/measures as they relate to diseases and pests, residues and contaminants, we now review the potential impact of prevailing seed-related SPS/TBT issues on the seed trade in Asia.

Diseases and their impact on the seed industry

The regulation of seed-borne diseases in the worldwide movement of seeds has a significant impact on the interests of the seed industry, germplasm banks and international research organizations. While most of the Asian countries, as members of WTO, are signatories to the SPS/TBT Agreements, many fail to understand their obligations under those Agreements. Many also lack the technical capacity to meet those obligations, especially with regard to standards and regulations that are relevant to the seed industry.

To be continued

(The author is Director/Coordinator WTO, Pakistan Agricultural Research Council (PARC), Islamabad)

SPS Measures under the WTO: Effects on seed trade in Asia-II

SPS Measures under the WTO: Effects on seed trade in Asia-II

By: Syed Wajid H. Pirzada
E-mail: wajidpirzada@hotmail.com

Scientific basis for SPS measures and risk analysis

An SPS measure has the potential to restrict international trade. For example, with seeds its use is restricted under the Agreement, as it can only be used to the extent necessary for protecting life/health of consumers, animals or plants. Moreover, it should be "based on scientific principles and should not be maintained without sufficient (scientific) evidence".

The SPS Agreement stipulates that the intent of any SPS measure should be that of protecting human, animal and plant life/health, and that any SPS measure must be based on an actual assessment of the risks it poses to human, animal and plant life/health or to a country. Risk assessment methods developed by relevant international organisations serve as guide to that end. For example, these include:

• Available scientific evidence.

• Relevant processes and production methods.

• Relevant inspection, sampling and testing procedures.

• Prevalence of specific diseases or pests.

• The existence of pest- or disease-free areas.

• Relevant ecological and environmental conditions and quarantine or other regulatory measures.

Relevant economic factors, such as:

(a) Potential damage in terms of loss of production or sales in the event of the entry, establishment or becoming part of a disease ecology, or the spread of a pest or disease;

(b) The costs of controlling or eradicating an outbreak, and the programmes needed to manage such responses:

(c) The costs associated with the loss of national/international markets; and

(d) The relative cost-effectiveness of alternative (SPS) measures.

Internationally agreed approaches to risk analysis

These approaches prescribe a process involving:

• The identification and characterisation of risks, e.g., pests and pathogens, likely to be associated with any imported product.

• An assessment of the probability of any hazard becoming established in the importing countries' animal or plant populations and an assessment of the impact in the face of such an eventuality.

• The development and selection of available risk management options, such as quarantine treatment, that best suits the SPS requirements of an importing country.

• The development of quarantine procedures that help put a risk management option in place.

An import risk analysis must take an objective approach to the risks presented and the risk management options, and it should follow internationally agreed methods wherever appropriate. The choice of any SPS measures must have a clear and direct relationship to the assessed risk. To this end, an importing country must, if requested, make known what factors it took into consideration, the assessment procedures used and the level of risk it determined to be acceptable.

The SPS Agreement builds on, and reaffirms GATT Article XXb, referred to above, to restrict the use of SPS measures in an unjustified way in order to protect trade, while acknowledging the sovereign right of a WTO member to provide the level of health protection it deems appropriate, that is, the appropriate level of sanitary or phytosanitary protection.

International SPS standards

As stated above, the SPS Agreement encourages the adoption of international standards, guidelines and recommendations by maintaining that harmonised measures are presumed to be consistent with the relevant parts of the SPS Agreement and GATT 1994. The international organisations recognised as responsible for establishing these international standards, guidelines and recommendations include the joint Food and Agricultural Organisation of the United Nations (FAO), WHO and CAC (food safety standards), Office International Des Epizooties (OIE), the International Organisation for Animal Health, and the relevant international and regional organisations operating within the framework of the FAO/International Plant Protection Convention (IPPC).

Although such standards are not binding on WTO members, the SPS Agreement, as stated above, encourages the members to base their SPS measures on international standards, guidelines and recommendations while allowing them to set and maintain higher levels of protection subject to the relevant provisions of the Agreement. In the context of the SPS Agreement, IPPC is the key international Convention related to seed industry business, as it deals with pests and diseases.

IPPC and the SPS Agreement

IPPC is a multilateral treaty deposited with the Director-General of FAO. It is administered through the IPPC secretariat located in FAO. The purpose of the Convention is "international co-operation in controlling pests of plants and plant products and in preventing their international spread, and especially their introduction into endangered areas" (IPPC Preamble).

The relationship of IPPC to the SPS Agreement is established through a reference, made in the SPS Agreement, to IPPC as international organisation responsible for setting standards and the harmonisation of phytosanitary measures affecting international trade. WTO panels established to review phytosanitary measures thus can seek advice from, or consult the IPPC Secretariat in order to obtain technical information or identify technical experts who may help resolve phytosanitary disputes. Moreover, IPPC is an active observer in the SPS Committee of WTO and routinely interacts with other standard-setting organisations. It is, therefore, important to understand the principles followed and standards set by IPPC.

IPPC principles of plant quarantine as related to international trade

• Sovereignty: With the aim of preventing the introduction of pests requiring quarantine measures into their territories, it is recognised that countries may exercise their sovereign right to use phytosanitary measures to regulate the entry of plant and plant products and other materials capable of harbouring pests.

• Necessity: Countries will institute restrictive measures only where such measures are made necessary by phytosanitary consideration, to prevent the introduction of pests requiring quarantine measures.

• Minimal impact: Phytosanitary measures will be consistent with the pest risk involved, and will represent the least restrictive measures available, which will result in the minimum impediment to the international movement of people, commodities and conveyances.

• Modifications: As conditions change and new facts become available, phytosanitary measures will be modified promptly either by the inclusion of prohibitions, restrictions or requirements necessary for their access or by the removal of those found to be unnecessary.

• Transparency: Countries will publish and disseminate phytosanitary prohibitions, restrictions and requirements and, on request, make available the rationale for such measures.

• Harmonisation: Phytosanitary measures will be based, whenever possible, on international standards and recommendations, developed within the IPPC framework.

• Equivalence: Countries will recognise as being equivalent those phytosanitary measures that are not identical but which have the same effect.

• Dispute settlement: It is preferable that any dispute between two countries regarding phytosanitary measures be resolved at the technical bilateral level. If such a solution cannot be achieved within a reasonable period, further action may be undertaken by means of multilateral settlement system.

• Co-operation: Countries will co-operate in preventing the spread and introduction of pests requiring quarantine, and in promoting measures for their official control.

• Technical authority: Countries will establish/provide an official plant protection organisation.

• Risk analysis: To determine which pests require quarantine, and the strength of the measures to be taken against them, countries will use pest-risk analysis methods based on biological and economic evidence and, wherever possible, follow procedures developed within the IPPC framework.

(To be continued)

(The author is Director/Coordinator WTO, Pakistan Agricultural Research Council (PARC), Islamabad- For profile of the writer, please click on Our Experts on the top of this page)

SPS Measures under the WTO: Effects on the seed trade in Asia-I

SPS Measures under the WTO: Effects on the seed trade in Asia-I

By Syed Wajid H. Pirzada

E-mail: wajidpirzada@hotmail.com

Foreign germplasm plays an important role in crop breeding and overall agricultural development programmes of Asian countries. Diseases and insect pests are among the major causes of low yields and crop failures in this region. Therefore, worldwide movement of germplasm, especially with the liberalisation of food and agriculture trade under the World Trade Organization (WTO) regime, can have an impact on the sustainability of these programmes.

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)