Introduction to WTO and the SPS Agreement. Anneke Hamilton Agriculture and Commodities Division 12 September 2013 SADC Workshop, South Africa

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1 Introduction to WTO and the SPS Agreement Anneke Hamilton Agriculture and Commodities Division 12 September 2013 SADC Workshop, South Africa

2 Outline Introduction to WTO Use of Non-Tariff Measures (NTMs) Why the SPS Agreement? Why is it relevant for agricultural trade? What is its objective? What does it cover? 2

3 Without the WTO The effect of protectionism on world trade, December January $3.0bn February 1931 November March October $0.9bn April September May August June July Trade figures: per month 3

4 Rounds: 1947(Geneva)... Negotiating Trade Rounds Negotiations Rules Disputes Implementation...

5 Negotiating Trade Rounds Year Place / name 1947 Geneva 1949 Annecy 1951 Torquay 1956 Geneva Geneva (Dillon Round) Geneva (Kennedy Round) Geneva (Tokyo Round) Geneva (Uruguay Round) Geneva (DDA) 1995: WTO Source: WTO

6 What is the WTO? Forum to negotiate trade rules Implement trade agreements Resolve trade disputes Review national trade policies Note: The WTO is not just for liberalizing trade. Sometimes the rules support trade barriers e.g. to protect consumers or prevent the spread of disease.

7 WTO Trade Rules & Disciplines WTO 1A 1B 1C Multilateral agreements on trade in goods GATS TRIPS Dispute Settlement Understanding Trade Policy Review Mechanism Plurilateral trade agreements

8 The WTO Fact File Location: Geneva, Switzerland Established: 1 January 1995 Membership: 159 Budget: 196m Swiss francs for 2012 (~214m US$) Secretariat staff: ~640 Head: Roberto Acevedo (Director-General)

9 WTO Basic Principles 1. No discrimination Most favoured nation principle (MFN): treating other countries equally National treatment principle: treating foreign & domestic producers equally 2. Predictability Respect of tariff bindings (goods and services) Transparency (notification, TPR) 3. Freer trade (suppression of barriers through negotiations) Tariff reductions Prohibition of using quantitative restrictions (quotas)

10 Outline Introduction to WTO Use of Non-Tariff Measures (NTMs) Why the SPS Agreement? Why is it relevant for agricultural trade? What is its objective? What does it cover? 10

11 Negotiating Trade Rounds Year Place / name Subjects covered # 1947 Geneva Tariffs Annecy Tariffs Torquay Tariffs Geneva Tariffs Geneva (Dillon Round) Geneva (Kennedy Round) Geneva (Tokyo Round) Geneva (Uruguay Round) Tariffs 26 Tariffs and anti-dumping measures Tariffs, NTBs, framework agreements Tariffs, NTBs, rules, services, IP, DSU, textiles, agriculture, creation of WTO, etc Geneva (DDA) (the above) + environment, +? Source: WTO

12 Use of Non-tariff measures 40% Overall, import weighted tariff on industrial products > 4% 12

13 Use of Non-tariff measures? %?

14 Non-tariff measures Trade-related intellectual Property rights Technical barriers to trade Subsidies Quantitative restrictions Government purchase Trade in services Sanitary and phytosanitary measures 14

15 Negotiating Trade Rounds Year Place / name Subjects covered # 1947 Geneva Tariffs Annecy Tariffs Torquay Tariffs Geneva Tariffs Geneva (Dillon Round) Geneva (Kennedy Round) Geneva (Tokyo Round) Geneva (Uruguay Round) Tariffs 26 Tariffs and anti-dumping measures Tariffs, NTBs, framework agreements Tariffs, NTBs, rules, services, IP, DSU, textiles, agriculture, creation of WTO, etc Geneva (DDA) (the above) + environment, +? Source: WTO

16 SPS Agreement Agreement on the Application of Sanitary and Phytosanitary Measures 1995

17 Outline Introduction to WTO Use of Non-Tariff Measures (NTMs) Why the SPS Agreement? Why is it relevant for agricultural trade? What is its objective? What does it cover? 17

18 Why an Agreement on SPS matters? World food and agriculture trade: In 2012, US$ 1657 billion of agricultural products traded US$ 1375 billion food traded (2012) But, on the other hand...

19 Bird Flu BSE Plant Pests SARS MRL

20 Which may lead to... Heavy economic losses for producers and exporters Loss of confidence between trading partners Trade bans followed by more severe import controls Loss of consumers confidence!!!

21 What is the objective of the SPS Agreement? Recognizing the right to protect human, animal, plant life or health Avoiding unnecessary barriers to trade 21

22 SPS Agreement - Coverage Article 2.1 Members have the right to take sanitary and phytosanitary measures necessary for the protection of human, animal or plant life or health, provided that such measures are not inconsistent with the provisions of this Agreement 22

23 What is the purpose of the SPS Agreement? establishes a multilateral framework of rules and disciplines to guide development, adoption, and enforcement of sanitary and phytosanitary measures applies to SPS measures which may, directly or indirectly, affect international trade 23

24 Scientific Justification Articles 3 & 5 Measures must be based on: International standards OR Risk assessment 24

25 A measure taken to protect: What are SPS Measures? Definition - Annex A Human or animal health Human life Animal or plant life Territory of Member from from from from risks arising from additives, contaminants, toxins or disease organisms in food, drink, feedstuff plant- or animal-carried diseases pests, diseases, disease-causing organisms other damage caused by entry, establishment or spread of pests 25

26 All types of measures with these purposes, including: product criteria quarantine measures processing methods certification inspection testing packaging, labelling (food safety) It is not the type of measure that counts, nor the products involved, but rather its objective! 26

27 We have looked at Intro to WTO Use of Non-Tariff Measures (NTMs) Why the SPS Agreement matters? Why is it relevant for agricultural trade? What is its objective? What does it cover? So what are the basic provisions of the SPS Agreement?... 27

28 Key Principles of the SPS Agreement? Group Card Exercise

29 Key Provisions: SPS Agreement 1. Non-discrimination 2. Scientific justification harmonization risk assessment consistency least trade-restrictiveness 3. Equivalence 4. Regionalization 5. Transparency 6. Technical assistance/special treatment 7. Control, inspection and approval procedures

30 Exercise: Basic Principles of the SPS Agreement Each group receives a set of 20 cards Each card has a recto and a verso side containing two options referring to a provision referenced in the SPS Agreement Each group must discuss and choose which side of the card it believes contains the correct provision as referenced in the SPS Agreement Please choose the correct side of the card, i.e the right SPS provision for all 20 cards. Refer to the specific Article of the SPS Agreement (where applicable)

31 Review: Basic Provisions of the SPS Agreement?

32 Card 1 : What is the objective of the SPS Agreement? Recognizing the right to protect human, animal, plant life or health Avoiding unnecessary barriers to trade 32

33 Card 1 : SPS Agreement - Coverage Article 2.1 1A Members have the right to take sanitary and phytosanitary measures necessary for the protection of human, animal or plant life or health, provided that such measures are not inconsistent with the provisions of this Agreement 33

34 Card 2: Scientific Justification Article 2.2 Members shall ensure that any SPS measure is: based on scientific principles applied only to the extent necessary to protect human, animal or plant life or health not maintained without sufficient scientific evidence 2A except as provided for in Article

35 Card 3: Non-discrimination Article 2.3 3B No unjustifiable differentiation between national and foreign sources of supply 35

36 Card 4: Non-discrimination Article 2.3 4B No unjustifiable discrimination between Members with similar conditions 36

37 Card 5: Harmonization Annex A, Para. 3 Standard-setting organizations 5B food safety Codex animal health OIE plant health IPPC Codex = Joint FAO/WHO Codex Alimentarius Commission OIE = World Organization for Animal Health IPPC = International Plant Protection Convention (FAO) 37

38 Card 6: Scientific Justification Article 3.2 Article 3.2: Measures that conform to international standards shall be deemed to be necessary to protect human, animal or plant life or health, and presumed to be consistent with the relevant provisions of this Agreement... 6A 38

39 Card 7: Equivalence Article 4.1 If the exporting Member objectively demonstrates that its measures achieve the ALOP of the importing country 7A Members shall accept SPS measures of other Members as equivalent Committee Guidelines (G/SPS/19/Rev.2) 39

40 Disease or pest risk: Card 8 - Risk assessment Definition, Annex A, Para 4 Evaluation of likelihood of entry, establishment or spread of a pest or disease according to the SPS measures which might be applied and of associated potential biological and economic consequences 40

41 Card 8 - Risk assessment Definition, Annex A, Para 4 Food safety: Potential for adverse effects on human or animal health Arising from the presence of additives, contaminants, toxins or disease-causing organisms in food, beverages or feedstuffs. 41

42 Card 8 - Risk assessment Definition, Annex A, Para 4 Disease or pest risk: Evaluation of likelihood of entry, establishment or spread of a pest or disease according to the SPS measures which might be applied and of associated potential biological and economic consequences 8B 42

43 Card 9 ALOP Article 5.3; Annex A, Para 5 In assessing the risk to animal or plant life or health, Members shall apply measures to achieve the appropriate level of protection (ALOP) from such risk, which is sometimes called the acceptable level of risk. 9B 43

44 Card 10: Risk assessment - exception Provisional Measures, Article 5.7 Members may provisionally adopt SPS measures: when relevant scientific information is insufficient on the basis of available information In such circumstances, Members shall: seeks to obtain additional information to assess risk review the measure within a reasonable period of time 10B 44

45 Card 11 - Regionalization Article 6 Adapt SPS measures to characteristics of area (all or part of a country, all or parts of several countries) taking into account prevalence of diseases or pests existence of eradication or control programmes criteria/guidelines developed by sisters Recognize concept of pest- or disease-free areas Exporters=>proof (Article 6.3) 11A 45

46 Card 12: When to Notify? Annex B, Para. 5 12A Regular measures When modifications are still possible (draft text) Allow 60 day comment period!! Emergency measures IMMEDIATELY!! 46

47 Card 13: TBT Agreement Coverage Annex A, para.1 It applies to all: technical regulations (mandatory) standards (voluntary) conformity assessment procedures 13B TBT SPS But: its provisions do not apply to SPS measures 47

48 A measure taken to protect: SPS Measures Definition - Annex A Human or animal health Human life Animal or plant life Territory of Member from from from from risks arising from additives, contaminants, toxins or disease organisms in food, drink, feedstuff plant- or animal-carried diseases pests, diseases, disease-causing organisms other damage caused by entry, establishment or spread of pests 48

49 Card 14: Translations of Notified Regulations? - Annex B, para 8 Upon request, developed countries to provide regulation or its summary in English, French, or Spanish 14B Members encouraged to share unofficial translations with each other supplement format 49

50 Card 15: Transparency Article 7 & Annex B, para.3(a) 15B Enquiry Point Provides answers and documentation to all reasonable questions from interested Members regarding any SPS regulation adopted or proposed within its territory. NB//The Enquiry point can be the same as the NNA. 50

51 Card 15: Transparency Article 7 & Annex B National Notification Authority Notifies other Members through WTO at an early stage (or immediately for emergency measures) to allow for comments/amendments Provides copies of proposed regulations upon request Ensures that comments are handled correctly 51

52 Card 15: Transparency Article 7 & Annex B Members shall establish an Enquiry Point AND designate a Notification Authority notify other Members of new or changed SPS regulations when no international standard exists OR the new regulation is different than the international standard AND regulation may have significant effect on trade 52

53 Notification of draft SPS regulations: New recommendations G/SPS/7/Rev.3 - operational as of 1 December 2008 Notify measures based on international standards Default choice 60 day comment period Identify date of publication Date of entry into force 6 months after date of publication 53

54 Online Submission of SPS Notifications Now possible to submit SPS notifications online (with the SPS Notification Submission System) https://nss.wto.org) The SPS National Notification Authority of each Member can request access to the system by sending an to 54

55 Card 16: Control, Inspection & Approval Procedures Article 8 & Annex C. para.1(f) 16A Any fees imposed for the procedures on imported products are equitable in relation to any fees charged on like domestic products or products originating in any other Member and should be no higher than the actual cost of the service. 55

56 Card 17: Technical Assistance Article 9.1 Members agree to facilitate provision of TA help countries comply with SPS measures technology, research, infrastructure advice, credits, donations, grants technical expertise, training, equipment help countries maintain and expand market access 17A 56

57 Card 18: Decision-making in the SPS Committee Article 12.1 All decisions in the SPS Committee are taken by consensus. A consensus is defined on the basis that no WTO member present at the time a decision is taken voices an objection. 18B 57

58 Card 19: SPS Committee The SPS Committee has developed guidance for the implementation of provisions as follows: o Decision on Equivalence (G/SPS/19/Rev.2) o Guidelines on Consistency (G/SPS/15) o Guidelines on Regionalization (G/SPS/48) o Recommended procedures on transparency (G/SPS/7/Rev.3) 19B 58

59 Card 20: Decisions & Guidelines of the SPS Committee The decisions and guidelines adopted by the SPS Committee cannot add to or detract from the legal obligations of WTO Members. 20B 59

60 Key Provisions: SPS Agreement 1. Non-discrimination 2. Scientific justification harmonization risk assessment consistency least trade-restrictiveness 3. Equivalence 4. Regionalization 5. Transparency 6. Technical assistance/special treatment 7. Control, inspection and approval procedures

61 THANK YOU! Agriculture and Commodities Division SPS gateway

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