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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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