WTO BODY DEBATES PUBLIC, PRIVATE FOOD SAFETY STANDARDS

The debate on the pros and cons of private-sector standards related to food safety continues at the WTO. With regard to government standards and schemes, Members recently discussed, among others, Australia's stringent new risk management measures on imported shrimp.

Meeting in both formal and informal settings at the beginning of March, the Committee on Sanitary and Phytosanitary (SPS) Measures continued a debate initiated in 2005 by St. Vincent and the Grenadines on private sector standards. At the time, the small island state highlighted the challenges it faced when trying to access the EU market due to strict standards set by commercial supermarket chains (see BRIDGES Weekly, 6 July 2005).

In the meantime, the proliferation of private standards has continued. The UN Conference on Trade and Development (UNCTAD) estimates their number at around 400. It is not clear whether, and how, WTO rules apply to such standards. Yet, according to a background paper prepared by the WTO Secretariat (G/SPS/GEN/746, available at http://docsonline.wto.org), the distinction between voluntary private standards and official SPS measures is becoming increasingly blurry, as private requirements often become the industry norm, forcing those that do not comply out of business.

Argentina made this point during the meeting of the SPS Committee, noting that in order to be able to continue selling to large buyers, such as major supermarket chains, exporters are obliged to follow the standards these set. Members also discussed how, then, to focus technical assistance, with a number of countries favouring a focus on government requirements rather than branching out too much into private-sector territory.

The EU and Chile spoke in support of private standards, arguing that they help expand trade because exporters that comply have an easy time entering markets. The recent launch of international discussions on the development of standards for biofuels represents an example of an area in which participants hope to boost international trade and production through the development of standards (see BRIDGES Weekly, 7 March 2007).

Other countries, including the Bahamas, Brazil, Cuba and Egypt countered, however, that private standards pose significant challenges to small countries and traders. First, the standards are expensive to comply with; and second, they may conflict with government or international standards. In addition, the numerous standard-setting systems often do not recognise one another as equivalent, meaning exporters may need to prove compliance with several different schemes.

St. Vincent and the Grenadines circulated a new communication (G/SPS/GEN/766), noting the negative effects of private standards on small farmers in particular, and claiming that the standards are "in conflict with the letter and spirit of the SPS Agreement, veritable barriers to trade and having the potential to cause confusion, inequity and lack of transparency." The submission pointed to the compliance costs as well as the arbitrariness and lack of objectivity of the verification system -- something small farmers and economies lack the capacity to tackle. It proposed the creation of a support facility for producers in small and vulnerable economies. The paper also suggested involving producers as well as international standard-setting bodies in the development of private standards, and suggested that the standards should be more flexible, taking into account specific crops and country situations.

Shrimp imports to Australia - a case in point

Discussions at the SPS Committee also focused on measures implemented in Member countries. Among those discussed was Australia's recent push to tighten its quarantine and control requirements on shrimp imports.

The new regulations would affect imports from China and several Southeast Asian countries. Thailand said the measures were overly restrictive, and asked Australia to accept its safety testing and measures. Thai representatives made this plea both at the WTO meeting, and an Association of Southeast Asian Nations (ASEAN) gathering on the same subject.

Under the SPS Agreement, WTO Members are allowed to set a standard of human and plant protection that they consider 'appropriate', but any trade restrictions must be backed by a scientific risk assessment and applied only to the extent necessary to attain the stated goal.

Even within Australia, the new regulations proposed by Biosafety Australia, a government body, have been controversial. Scott Walter of the Australian Prawn Farmers Association (APFA) welcomed the move, saying that "Australia's disease-free status is highly valued and well worth defending in the interests of future food production and preserving native seafood resources for future generation," especially as "Australia is an island nation with a mainland coastline of 36,000km, including the World Heritage-listed Great Barrier Reef, with many species of crustaceans that are vulnerable to exotic disease." Harry Peters, chair of the Seafood Importers Association of Australia, warned, however, of shrimp shortages and rising prices due to "expensive testing and strict rules," which may well "mean the death of the prawn cutlet and cheap sweet and sour prawns."

The US, at a separate meeting of the Trade Policy Review Body examining Australia's trade policies on 5 March, also drew attention to the country's strict SPS measures. The US said "given that Australia is one of the foremost supporters of agricultural liberalisation in the WTO, we would expect it to seriously consider changes that would ensure the health and safety of its agriculture and food supply while minimising negative effects on trade."

ICTSD reporting; "Ban imported prawns, warns industry," THE AUSTRALIAN, 21 February 2007; "Prawn bans on the nose," HERALD SUN, 2 March 2007; "US urges Australia ease food trade health rules," REUTERS, 6 March 2007.