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Sanitary and Phytosanitary Measures and Technical Barriers to Trade Summary

Though technical regulations and industry standards were once considered objective tools for facilitating production and exchange, they have recently become a hotly contested subject in the politics of international trade. In particular, issues of domestic security and public health such as the U.S.'s bioterrorism laws and the E.U.'s food and feed regulations present emotionally charged contexts under which WTO agreements are interpreted.

Why do standards matter for trade?

Government regulations or industry standards for goods can impact trade in at least three ways: they can facilitate exchange by clearly defining product characteristics and improving compatibility and usability; they also advance domestic social goals like public health by establishing minimum standards or prescribing safety requirements; finally, they can hide protectionist policies. During the Uruguay Round of multilateral trade negotiations, member nations established The Agreement on the Application of Sanitary and Phytosanitary (SPS) Measures and the Agreement on Technical Barriers to Trade (TBT) to address the emerging debate over the use of standards in international trade. The SPS and TBT Agreements can be interpreted as an attempt to balance the first two uses of standards and to minimize the third. In other words, these Agreements balance the competing demands for domestic regulatory autonomy and the global harmonization of product standards. At the same time, the agreements attempt to prevent standards from becoming a protectionist device.

The SPS and TBT Agreements

The Sanitary and Phytosanitary Agreement (SPS) allows members to take scientifically based measures to protect public health. The agreement commits members to base these measures on internationally established guidelines and risk assessment procedures. In the case of particularly stringent measures, countries must present scientific justification. When existing scientific evidence is insufficient to determine risk, members may adopt measures on the basis of available information, but must obtain additional information to objectively ground their assessment of risk within a reasonable period of time. Generally speaking, the SPS Agreement is a compromise that permits countries to take measures to protect public health within their borders so long as they do so in a manner that restricts trade as little as possible.

Likewise, the Technical Barriers to Trade Agreement (TBT) strikes a delicate balance between the policy goals of trade facilitation and national autonomy in technical regulations. The agreement attempts to extricate the trade-facilitating aspects of standards from their trade-distorting potential by obligating countries to ensure that technical regulations and product standards do not unnecessarily restrict international trade. The TBT Agreement works toward this end in three ways. The agreement encourages 'standard equivalence' between countries, in other words, the formal acceptance of the standards of other countries through explicit agreements. It also promotes the use of international standards. Lastly, it mandates that countries establish enquiry points and national notification authorities (the two may be the same body) in order to answer questions about SPS regulations and notify other nations of new regulations respectively. Enquiry points compile all available information in that country on product standards and trade regulations and provide it to other members upon request. The national notification authorities report changes in trade policy to the WTO and receive and take comments on these measures.

Current Debate

These measures are criticized by some who claim the agreements are too invasive and deny them sovereignty of domestic regulation. Others assert that the agreements do not go far enough and domestic regulation is often a form of protectionism. Developing countries protest that the standards promoted in the agreements lack their input and are dominated by the interests of developed countries. The inability of developing country governments to adequately fund their delegations to attend SPS meetings is certainly also a concern. [1] Adding their voices to the debate are environmentalists, non-governmental organizations, and local regulatory officials who feel excluded from negotiations of a topic that directly affects them.

Those that have criticized these agreements for restricting democratic control over standards are concerned that international standards will jeopardize public health and welfare. In the highly contentious debate over genetically modified foods, for example, some non-governmental organizations argue that these agreements afford countries inadequate flexibility to manage uncertainty and risks to human health and safety. Others have mounted challenges to the very idea of restricting the national choice of preferred levels of health, risk and security safety by subjecting standards to international consensus.

There is also considerable debate over the extent to which the SPS and TBT Agreements allow trade restrictions based on specifications related to process and production methods. Nations disagree, for example, over the extent to which the TBT Agreement allows nations to differentiate between identical products that were produced in different ways. Can a country treat products differently because the production methods used have different environmental impacts? Such questions have fueled fears among environmentalists and other civil society groups that the Uruguay Round Agreements may threaten environmental quality. They are afraid that international standards will diminish a country's ability to uphold its own environmental or public health principles.

Japan's Apple Restrictions

Japan's restrictions against U.S. apple imports to prevent the introduction of the 'fire blight' plant disease, which affects plants but has no human health consequences, were found to be in violation of the SPS Agreement because of lack of scientific evidence to support such a measure. [2] Japan defended the restrictions saying they were provision and precautionary and argued that their national authorities should be given deference in their interpretation of the scientific evidence. The WTO rejected this defense and ruled that objective assessment of the evidence should be the measure by which compliance with the WTO SPS measures will be determined. Without the deference to interpretation by national authorities, Japan's precautionary were found to be 'clearly disproportionate to the risk.' [3] This dealt only with plant safety rather than the emotionally charged issue of human health safety, yet highlights the WTO dispute settlement body's interpretation that the SPS agreement only allows for standards set on the basis of scientific evidence with no leeway given to national authorities. [4]

Developing Countries

Developing countries take issue with the agreements because they make intensive use of multilaterally established standards that are determined by a process that is both politically and economically skewed. Standard-setting has until recently been the exclusive domain of rich, technologically advanced nations who have dominated the terms of debate in bodies like the International Organization for Standardization (ISO) and the Codex Alimentarius Commission. Thus, implementing the SPS and TBT Agreements often requires developing countries to adhere to standards more appropriate for their industrialized counterparts. The lack of developing country input in the formation of standards translates into what some observers have called techno-imperialism, or the imposition of standards by the rich countries upon the poor ones.

Doha Development Round

The Doha Development Round is striving to address a myriad issues underlying the SPS and TBT Agreements, but the most progress to date has been on the needs of developing countries. In August 2002, the WTO initiated a program to enhance the capacity of developing countries to participate in negotiations and implement standards. The program, called the Standards and Trade Development Facility, joins the efforts of the WTO, World Health Organization (WHO), the Food and Agriculture Organization (FAO), the World Organization for Animal Health (OIE), the Codex Alimentarius, and the World Bank. The principle aims of the Standards and Trade Development Facility are to increase participation of developing countries in forming international standards and facilitate the implementation of existing requirements.

At the April 2003 meeting the SPS committee adopted a principle of applying special and differential treatment for developing countries. This was based on a Canadian proposal whereby members agree to consultations whenever a developing country identifies a problem with an SPS measure. Implementation details had yet to be finalized by March of 2004.

At the March 17-18 2004 meeting, the WTO Committee on Sanitary and Phytosanitary Measures finalized their Decision on Equivalence. [5] Equivalence is the mutual acceptances of another Member's standards that while different in process have the same effect. This decision is aimed at helping developing nations prove that their products are as safe as those in developed nations. The decision aims to speed up recognition of equivalence of SPS measures for products previously traded or those for which information already exists. [6]

Politicizing Health

The WTO has played an important role in ensuring that standards and regulation do not become de facto barriers to trade or hide protectionist policies. The SPS and TBT agreements have attempted to use scientific standards as the objective basis by which regulations should be judged. Nevertheless, people's fears and scientific evidence do not always correlate and so regulation intended to protect human health is often contentious.

Few issues are raising as many concerns about food safety and environmental impact as that of Genetically Modified Organisms (GMO). The UK's GM public debate found that most people were uneasy with GM and the more they learn the more intense their concerns become. [7] The EU has a moratorium on the approvals of new genetically modified organisms, and also had passed laws mandating labeling requirements. On March 4th, 2004, the WTO Director-General appointed a panel in the US, Argentina and Canada complaint against the EU de facto moratorium on the approval of new GMO. [8] The US, Canada and Argentina argue that the moratorium violates provisions of the SPS, TBT and Agreement on Agriculture, since the prohibition of GMO imports is not legally or scientifically justified. [9] The EU responded that market authorization had been granted to numerous GMOs, with applications pending for others.

The SPS and TBT agreements impact on public health brings an emotional side to the debate. These emotions can obscure otherwise clear protectionist policies. To counter this problem the WTO has committed to finding the truth behind the science and evaluating the evidence in an objective fashion.

Last updated April 2004.

[1] http://www.wto.org/english/news_e/news03_e/sps_1_3apr03_e.htm
[2] BRIDGES Monthly Review. February 2004. Pg. 5
[3] BRIDGES Monthly Review. February 2004. Pg. 5
[4] BRIDGES Monthly Review. February 2004. Pg. 6
[5] http://www.ictsd.org/weekly/04-03-24/story2.htm
[6] http://www.ictsd.org/weekly/04-03-24/story2.htm
[7] http://www.gmpublicdebate.org.uk/ut_09/ut_9_6.htm
[8] BRIDGES Weekly Trade News Digest. Volume 8, Number 9. March 10, 2004.
[9] BRIDGES Weekly Trade News Digest. Volume 8, Number 7. February 26, 2004.