SPS CTTE CONSIDERS PRIVATE SECTOR STANDARDS; STRUGGLES CONTINUE WITH S&D

WTO Members examined for the first time the role of private sector standards in restricting trade during the 29-30 meeting of the Committee on Sanitary and Phytosanitary (SPS) Measures. The discussion, prompted by a complaint by St Vincent and the Grenadines regarding EU supermarkets' requirements for bananas, centered on the need to clarify SPS Agreement rules pertaining to government responsibilities for private sector standards.

Delegations continued to struggle to address demands for improved special and differential treatment (S&D). Although they adopted a report on the issue to be presented to the General Council for consideration in July, Members were unable to agree on provisions to make S&D more "precise, effective and operational" as mandated by Paragraph 44 of the Doha Declaration. Similarly, they could not agree on how best to recognise exporting regions within and across national borders as being disease and/or pest-free for the purpose of SPS measures.

Private sector standards at stake

St Vincent and the Grenadines, supported by Jamaica, Peru, Ecuador, and Argentina, complained that 'EurepGAP' SPS standards imposed by the Euro-Retailer Produce Working Group, composed primarily of food retailers, were more strict than EU governments' requirements. Referring to Article 13 of the SPS Agreement, which says that Member governments "shall take such reasonable measures as may be available to them to ensure that non-governmental entities within their territories... comply with the relevant provisions of this agreement," these countries argue that the EU rules should apply to private sector. Argentina said that this matter needed to be resolved or "twenty years of work" would be wasted.

The EU countered that it is not responsible unless the private sector organisations claim that their standards are EU standards, and that any claims should be brought up directly with the relevant company. Given that the private sector standards are driven by consumer demand, they said, the EU is not in a position to intervene.

S&D report adopted, but old divisions continue

Members continued their consideration of five S&D proposals in the hopes of delivering a report by the end of July "with clear recommendations for a decision" on new provisions, as mandated by the 2004 July Package (WT/7/579). However, divergences persist between the proponents of the proposals, including Kenya, India and Egypt, and providers of technical assistance including the US and the EU. The former want provisions to make it mandatory for countries that are adopting new standards to provide technical assistance to facilitate their implementation in developing countries.

The five proposals include demands to introduce binding language that would allow developing countries to be temporarily exempt from SPS measures; make mandatory the provision of technical assistance to developing countries; require developed countries to undertake consultations with developing countries on SPS measures should the latter request them; and make it a duty for developed countries to encourage and facilitate the active participation of developing country Members in international standard-setting organisations such as Codex Alimentarius. A highly controversial African Group submission proposes conditions for SPS measures that adversely affect developing countries or are difficult for them to comply with: Members would be required to either withdraw such measures or provide developing countries the technical and financial resources necessary for compliance.

A number of developed country Members challenged the proposal, arguing that measures designed to save lives cannot be withdrawn while waiting for other countries to acquire the technology to meet their criteria.

In addition, the five proposals were mentioned in the final report on S&D to be submitted to General Council later this month. The report that was adopted (G/SPS/35) sets out a framework for how S&D can be provided in the SPS context. It specifies the need to provide both technical assistance to developing countries in order to help them implement the SPS measures required in their export markets, and to build provisions for special treatment into the measures themselves, such as longer implementation times or more lenient requirements. While it notes that S&D concerns will be considered at the next meeting of the SPS Committee in October, sources indicate that the proponents have agreed participate in informal consultations in coming months.

Regionalism discussion continues

Continuing the debate from the March meeting of the committee (see BRIDGES Weekly, 5 March 2005), Members discussed Article 6 of the SPS Agreement, which requires Members to adapt their SPS measures to specific geographic areas rather than to national borders. Spurred by poor implementation of this article, some countries, including Chile, Argentina, Peru, Brazil and the EU, wanted the SPS Committee to draft administrative guidelines on the topic. Others, including New Zealand, Canada and the US, would prefer to wait until two of the international standards organisations recognised by the SPS Agreement, the International Plant Protection Convention (IPPC) and the World Animal Health Organization (OIE), complete their own technical guidelines on the issue. Members debated whether it is possible to distinguish between administrative and technical guidelines and whether guidelines should specify a deadline for recognising disease and pest-free regions. Chair Gregg Young of the US decided not to start work on a draft text on regionalisation yet. Members will instead consider the issue again at the next meeting.

Members also adopted a report on the second review on the SPS Agreement (G/SPS/36) which was based upon negotiations at earlier sessions and informal negotiations held on 27-28 June. The next meeting of the SPS Committee will be held on 26-27 October 2005.

WTO World Trade Report focuses on standards

In related news, the WTO 2005 World Trade Report said that mutual recognition arrangements (MRAs) between WTO Members, in which countries validate other countries' standards as equivalent to their own, could have substantial trade-enhancing effects. The report acknowledges that environmental, technical, safety and SPS standards can have both positive and negative effects. It notes that SPS standards often impose high welfare costs on the exporting country and, for some regulatory regimes, "the presumed health risks or losses from the introduction of pests through imports need to be extraordinarily high" to justify the measures in place. Rather than urging international regulatory harmonisation, which especially in the case of safety and environmental standards "may not be a desirable objective", the WTO suggests "it may be preferable to have separate policy instruments for each country rather than one single policy instrument in these cases." As such, it urges countries to adopt more MRAs.

The WTO Trade Report is available at http://www.wto.org/english/news_e/pres05_e/pr411_e.htm

ICTSD reporting.