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Standards: Agreements on Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary Measures (SPs)
Chandra Kant Patel
Feb 2003
International and domestic transactions increasingly require adherence to standards on matters such as quality, security, safety, environment and health. By improving information flows between consumers and producers regarding characteristics and quality of products, standards can facilitate market transactions. The number of such standards - both voluntary and mandatory - is growing rapidly. Standards are commonly associated with the specifications and characteristics of particular products (machinery, vehicles etc), services (e.g. minimum accounting qualifications) and materials (e.g. cotton content in fabrics). In addition to products, standards also cover processes that address issues such as quality control in production. Whilst many standards are developed on a voluntary basis through consensus and co-operation, Governments and international organisations now assume an important regulatory role in setting and adopting them. There has been a rise in the use of technical regulations embodied in standards as an instrument of trade and commercial policies. As a result, standards have become important in the arsenal of protectionism.

International disciplines relating to TBT and SPs
Multilateral disciplines have been developed to address concerns that TBT and SPs should not serve as barriers to international trade and consequently distort it. The core objectives of these two related Agreements are to bring about uniformity in respect of product regulations and standards; and to encourage WTO members to adopt international standards wherever these are in place. These were first adopted in the Tokyo Round Code on Technical Barriers to Trade, and together with a new agreement on Sanitary and Phytosanitary Measures, are now part of the Uruguay Round Agreement and binding on all WTO members.
The two agreements overlap in several respects. TBT, for example, also covers measures aimed at protecting human health and safety, and animal or plant life. In order to ascertain whether a specific measure is subject to TBT or to SP provisions, it is necessary to look at the purpose for which it has been adopted. As a general rule, the measure is covered by the SP regime if it is designed to protect human life, animal life, plant life or a country, from the risks arising from the entry and spread of pests. The TBT Agreement covers all technical regulations, standards and procedures, except those defined under the SPs agreement. Thus, for example, whereas labelling requirements related to food safety are usually SP measures, labels related to nutritional characteristics or quality of a product fall under the TBT disciplines.

TBT Agreement
The principal objective of the TBT agreement is to establish international rules and procedures to prevent and avoid the creation of unnecessary barriers to trade, caused by imposition of technical regulations, voluntary standards or procedures for assessment of conformity. Technical regulations are a set of rules, compliance with which is obligatory and which lay down;

a) the characteristics of a product
b) related processes and production methods and
c) applicable administrative provisions.

They also cover terminology, symbols, requirements of packaging, marketing, labelling applicable to a product or processes, and production methods. The standards are not mandatory; their importance, however, lies in the fact that consumers more readily accept products conforming to them as quality products.
The determination of relevant requirements in technical regulations is undertaken by a procedure called Conformity Assessment Procedure. This may include procedures for;

a) sampling, testing and inspection
b) evaluation, verification and assurance of conformity and
c) registration, accreditation and approval.

All products, whether industrial or agricultural, are covered, except those covered by the SPs Agreement and the Agreement on Government Procurement.
The TBT establishes the primacy of international standards and obliges
WTO members to use them as a basis for their own regulations. One difficulty that has arisen in this regard concerns the process of standard-setting. Many small and developing countries are not able to participate in these exercises and in some cases, they do not reflect the concerns of developing countries, or make provisions for their capacities to meet the standards. In addition, implementation of standards often involves large costs, in relation to the development budgets of small and least developed countries. Some of the costs arise from the testing and certification (conformity assessment) procedures, necessary to determine whether a product meets standardised requirements. Often, however, countries and firms are confronted with unnecessary or duplicative testing and certification requirements, which represent significant costs to consumers, producers and the national economy. These costs are also reported to be rising.
The observations above are also relevant for the SPS Agreement.

SPs Agreement
The SPs Agreement was first negotiated during the Uruguay Round and now applies to all WTO members. Its main purpose is to deal with and minimise the negative effects of SPS measures on international trade. Accordingly it has established rules and disciplines to guide the development, adoption and enforcement of SP measures. Annex A to the Agreement defines SPS measures as those applied to protect;

• Human or animal life from risks arising from additives and contaminants in foods
• Human life or health from diseases carried by animals, plants or products thereof and from pests
• Animal or plant life from pests and diseases
• Territory from other damage from related matters.

In order to avoid abuse, SPs spells out in Article 2 the basic rights and obligations of members. The measures must be shown to be necessary, to be based on scientific principles and not be arbitrary or discriminatory in application between members, where identical or similar conditions prevail. In situations where there are no international standards, guidelines or recommendations must be based on an assessment of risks. The Agreement requires that such risk assessment be based on available scientific evidence, relevant production and process methods, relevant inspection, sampling and testing methods, relevant ecological and environmental conditions and existence of pest or disease free areas.
The Agreement also provides for measures to be adopted on a provisional basis when for example, information is not available to apply SPS measures. It also requires notification and publication of SPS measures in order to ensure that members can become acquainted with them. Accordingly, members are required to establish an enquiry point, responsible for providing answers to questions relating to measures. A WTO Committee on SP measures, carries out functions to implement the Agreement, provides a forum for the exchange of views, encourages the use of international standards and maintains close working relations with bodies such as the Codex Alimentarius Commission, a subsidiary body of the FAO.

Developing countries’ concerns regarding TBT and SPs Agreements
A major concern of developing countries is the way in which international standards are developed and approved. Their participation in such exercises has been limited and ineffective. Often, the standards developed are inappropriate as a basis for technical regulations in developing countries and they face additional obstacles in conforming to standards, in importing markets. Developing countries have also expressed concern, regarding variations in procedures for setting standards and have urged the harmonisation of procedures to ensure a more coherent and transparent system of international standardisation. They have also argued that when standards are invoked and later proved to be wrong, or applied contrary to the spirit of the TBT and SPs Agreements, provision should be made for compensation. The experience of Kenya, Uganda and Tanzania and Mozambique, regarding the ban imposed by the EU on their fish exports is instructive in this regard. Ostensibly banned for fear of cholera, the measures were taken without regard to the SPs disciplines and resulted in serious loss of income for fisher-people, as well as of foreign exchange. The ban has since been lifted.
An important step towards rationalising the technical regulations should involve commitments to:

• End discriminatory and arbitrary application of TBT and SP measures
• Discontinue duplicative testing requirements
• Acknowledge that domestic standards may achieve the same level of consumer protection, as foreign standards
• Make the regulations and their application more transparent
• Scale regulations at levels that are not burdensome for consumers and producers
• Implement the Agreements by taking into account the situation of least developed countries in particular.

References.
UNCTAD: A Positive agenda for developing countries: Issues for Future Trade Negotiations. United Nations, Geneva, New York 2000.
Chandra Kant Patel and John Wilson in Development, Trade and WTO: A Handbook. Edited by A.Mattoo and Bernard Hoekman, The World Bank, Washington DC, 2002


            
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