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2018/SCSC/WKSP4/004 Session: 3

Equivalence Recognition in Free Trade Agreements in the Asia-Pacific Region

Submitted by: ASEAN

Workshop on Trade Facilitation Through the Recognition of Food Safety Systems

EquivalenceLima, Peru

21-22 June 2018

ARIFIN TASRIF, Ph.D Director of Center for Quarantine Compliance, Cooperation, and Information

Indonesia Agricultural Quarantine Agency (IAQA),

Ministry of Agriculture, Republic of Indonesia

Website : http//www.barantan.go.id

Email :arifintasrif@kementan.go.id

Email: arifintasrif@yahoo.co.uk

HP/WA: +62.81290810111

EQUIVALENCE RECOGNITION IN FREE

TRADE AGREEMENTS IN THE ASIA-PACIFIC REGION

Outline :

1. Background

2. NTM’s Implementation in Regional Trade

Agreement

3. Equivalence Recognition Implementation

in APEC Region

4. Challenges and Opportunities of Equivalence

Recognition In APEC Region

1.Background

Why Equivalence Recognition ?

1. Equivalence assessment and acceptance is an

alternative way of facilitating trade;

2. The equivalence concept is based on the fact that

regulatory goals, in relation to health (animal, plant

and food safety), may be fulfilled by the use of

different kinds of measures.

3. Equivalence recognition can lead to the same results

as harmonization.

4. Encourage the use of equivalence to facilitate trade.

The Objective of SPS (Equivalence recognition)

measures in trade facilitations among APEC region is :

1. To minimise effects of regulations on trade by

encouraging the Parties regulators to work together;

2. To respect legitimate goals to protect human, animal

an plant health;

3. To remove unnecessary trade barriers; and

4. To improve transparancy and provide clear timelines

for approving imports or new products between the

countries.

Outline : 2. NTM’s Implementation in Regional Trade

Agreement

6

Example of NTMs

Non-Tariff Measures (NTMs):

Non-tariff measures (NTMs) are policy measures — other than

ordinary customs tariffs — that can potentially have an economic

effect on international trade in goods, changing quantities trade,

or prices or both (UNTAC).

1. Sanitary and Phytosanitary Measures (SPS):

Measures that are applied to protect human or animal life from risks arising

from: additives, contaminants, toxins or disease-causing organisms in food.

2. Technical Barriers to Trade (TBT) :

Measures referring to technical regulations, and procedures for assessment of

conformity with technical regulations and standards.

3. Contingent Trade-Protective Measures:

Measures implemented to counter act particular adverse effects of imports in

the market of the importing country contingent upon the fulfilment of certain

procedural and substantive requirements

Regional Trade Countries

CEPA/EPA/FTA Market Access (Trade in Goods)

Tariff

MFN Preferential

Tariff

Non Tariff

TBT

SPS

Others

Recognition of Equivalence and MRA

Agricultural

Products

Manufactured

Products

Cooperation /

CCB

9

No. Country Measures

SPS TBT ADP CV SG SSG QR TRQ XS

1 Brunei

Darussalam

3 2 - - - - - - -

2 Cambodia - 3 - - - - - - -

3 Indonesia 122 118 47 - 3 - - 2 1

4 Lao PDR 2 1 - - - - 12 - -

5 Malaysia 40 236 25 - 3 - - 13 -

6 Myanmar - 2 - - - - - - -

7 Philippines 403 256 2 - 3 7 21 14 -

8 Singapore 59 57 - - - - 143 - -

9 Thailand 240 609 51 - 2 - 112 23 -

10 Vietnam 94 114 7 - 4 - - 2 -

Table 1 : Non-Tariff Measures (NTMs) in ASEAN Region

10

No. Country Measures

SPS TBT ADP CV SG SSG QR TRQ XS

1 Australia 442 205 80 12 - - 178 2 6

2 Brunei Darussalam 3 2 - - - - - - -

3 Cambodia - 3 - - - - - - -

4 China (RRC) 1201 1230 105 6 2 - 42 10 -

5 Indonesia 122 118 47 - 3 - - 2 1

6 India 200 117 352 2 3 - 59 3 -

7 Japan 545 805 9 - - 57 85 18 -

8 Korea, Republic of 587 839 34 - - 39 92 67 -

9 Lao PDR 2 1 - - - - 12 - -

10 Malaysia 40 236 25 - 3 - - 13 -

11 Myanmar - 2 - - - - - - -

12 New Zealand 561 108 6 - - - 83 3 1

13 Philippines 403 256 2 - 3 7 21 14 -

14 Singapore 59 57 - - - - 143 - -

15 Thailand 240 609 51 - 2 - 112 23 -

16 Vietnam 94 114 7 - 4 - - 2 -

Table 2 : Non Tariff Measures (NTMs) in RCEP Region

11

No. Countries Measures

SPS TBT ADP CV SG SSG QR TRQ XS

1 Australia 442 205 80 12 - - 178 2 6

2 Brunei

Darussalam

3 2 - - - - - - -

3 Canada 1149 669 78 26 - - 48 21 11

4 Chile 563 499 4 - - - - 1 -

5 Japan 545 805 9 - - 57 85 18 -

6 Malaysia 40 236 25 - 3 - - 13 -

7 Mexico 326 566 71 3 - - 57 11 5

8 New Zealand 561 108 6 - - - 83 3 1

9 Peru 730 99 8 3 - - 6 - -

10 Singapore 59 57 - - - - 143 - -

11 Vietnam 94 114 7 - 4 - - 2 -

Table 3: Non Tariff Measures (NTMs) in TPP Region

12

No. Countries Measures

SPS TBT ADP CV SG SSG QR TRQ XS

1 Australia 442 205 80 12 - - 178 2 6

2 Brunei Darussalam 3 2 - - - - - - -

3 Canada 1149 669 78 26 - - 48 21 11

4 Chile 563 499 4 - - - - 1 -

5 China (RRC) 1201 1230 105 6 2 - 42 10 -

6 Hong Kong (China) 41 79 - - - - 142 - -

7 Indonesia 122 118 47 - 3 - - 2 1

8 Japan 545 805 9 - - 57 85 18 -

9 Korea, Republic of 587 839 34 - - 39 92 67 -

10 Malaysia 40 236 25 - 3 - - 13 -

11 Mexico 326 566 71 3 - - 57 11 5

12 New Zealand 561 108 6 - - - 83 3 1

13 Papua New Guinea - 1 - - - - - - -

14 Peru 730 99 8 3 - - 6 - -

15 Philippines 403 256 2 - 3 7 21 14 -

16 Russian Federation 145 85 20 - - - 93 4 -

17 Singapore 59 57 - - - - 143 - -

18 Taiwan (Chinese Taipei) 448 312 14 - - 20 44 22 -

19 Thailand 240 609 51 - 2 - 112 23 -

20 United State of America 2970 1523 355 109 2 173 59 52 13

21 Vietnam 94 114 7 - 4 - - 2 -

Table 4: Non Tariff Measures (NTMs) in APEC Region

Measures: Anti Dumping (ADP), Countervailing (CV), Quantitative Restrictions (QR), Safeguards (SG), Sanitary and

Phytosanitary (SPS), Special Safeguards(SSG), Technical Barriers to Trade(TBT), Tariff-rate Quotas (TRQ), and Export

Subsidies (XS)

Outline :

3. Equivalence Recognition Implementation

in APEC Region

14

Members shall

Accept SPS measures of other Members as

equivalent

If the exporting country objectively demonstrates that

its measures achieve the same Appropriate Level of

Protection (ALOP )as the importing country

G/SPS/19/REV.2

EQUIVALENCE :

15

Standard-setting organizations

food safety

CODEX plant health

IPPC animal health

OIE

EQUIVALENCE

Booster Trade Facilitation on APEC Region

1. FOOD SAFETY

2. ANIMAL HEALTH

3. PLANT HEALTH

IRA RISK MANAGEMENT

OPTION EQUIVALENCE

RECOGNITION

1. Single Product

2. Group of Products

3. Wide System Base

EQUIVALENCE RECOGNITION

MECHANISMS

Reff:

1. CODEX : CAC/GL 34-1999; CAC/GL 53-2003;

2. IPPC : ISPM 24-2017; Book Publ. By Megan Quinlan, 2016);

3. OIE : OIE-ATHC, (Chapter 1.7.3., 2003);

Issues:

EQUIVALENCE

RECOGNITION

FUTURE IMPLEMENTATION OF

RECOGNITION OF EQUIVALENCE IN REGIONAL

TRADE PARTNERSHIP AGREEMENTS

TPP

RCEP

ASEAN

APEC

USA

CANADA

NEW ZEALAND

AUSTRALIA

JAPAN

SOUTH

AFRICA

ARGENTINE

FRANCE

Indonesia experience on the implementation of

Recognition of Equivalence in Food Safety Systems

( Group of Products and wide system bases)

19

AGRICULTURE STANDARDIZATION

PRACTICES (National Regulation For Best Agriculture Practices)

Production Input

Agriculture

Production Handling Packaging Distribution Market Consumer

ASEAN cooperation related to SPS

No ASEAN cooperation related to SPS 1. ASEAN Trade In Goods (ATIGA):

• ASEAN SPS Contact Points;

• ASEAN Committee on SPS;

2. ASEAN Single Window (ASW)

3. SPS COOPERATION IN ASEAN:

• ASEAN Food Security Information Systems (AFSIS);

• ASEAN General Guidelines on the Pre-peration and Handling on Halal Food;

• ASEAN Integrated Food Security (AIFS)/Strategic Plan of Action on Food Security in The ASEAN

Region (SPA-FS);

4. SPS Cooperation in SPS:

• ASEAN Plant Health Cooperation Network (APHCN);

• ASEAN Regional Diagnostic Initiative (ARDI);

• ASEAN Maximum Residue Limits (ASEAN MRL’s);

• ASEAN Good Agriculture Practices (ASEAN GAP);

• ASEAN Food Safety Network (ASEAN FSN);

• ASEAN Standard for live Infectious Bronchitis Vaccine and Inactivated Infectious Bronchitis

Vaccine;

• Regional Framework for Control and Eradication of HPAI;

• ASEAN Animal Health Trust Fund (AHTF);

• ASEAN Phytosanitary Cooperation Network;

• ASEAN Network of Fisheries Post-Harvest technology Center / ASEAN Fisheries Development

Center (SEAFDEC);

• ASEAN Shrimp Alliance (ASA);

• ASEAN Network on Aquatic Animal Health Center (ANAAHC).

• ASEAN Network on Pest Risk Analysis (ASEAN-PRA);

Outline :

4. Challenges and Opportunities of Equivalence

Recognition In APEC Region

“SPS-plus”

(EQUIVALENCE)

Inform on

detention of goods and

facilitate test procedures

(TF Art.5)

Review and publish

fees and charges

(TF Art.6)

Allow pre-arrival

processing/publish average

release times

(TF Art.7)

Border Agency

Cooperation

(TF Art.8)

Review and reduce

import/export transit

formalities

(TF Art.10)

Freedom of transit:

Limit formalities and

Documentation

Requirements

(TF Art.11)

Publish wide range of

information related to

import/export

requirements and

procedures

(TF Art.1)

Provide advance

ruling besides

tariff classification

and origin

(TF Art.3)

CHALLENGES EQUIVALENCY COOPERATION IN ADDRESSING

FREE TRADE AGREEMENT

Challenges of an Equivalence Acceptance

Conditions for Success

1. Cost-benefit analysis.

before entering into negotiation involving equivalence assessments of

regulatory systems, the Party has to analyse the associated costs and

benefits. Establishing equivalence is both complicated and time-consuming.

The Party should thus consider carefully whether they should spend the

efforts to entering into negotiation for trade facilitation.

2. Compatibility of regulatory systems.

A certain degree of symmetry between the parties regulatory systems should

exist before starting negotiations for trade facilitation. For instance, sound

and effective regulatory infrastructure calls for three basic elements :

Law and accompanying regulations (i.e legislative and administrative base).

3. Resources availability

Qualifies trained staff to deal with programmes, and performance provisions

and well equipped analytical laboratories and other facilities.

Challenges applied an Equivalence

Acceptance Conditions for Success (cont’)

3. Resources availability

Quality trained staff to deal with programmes, and performance provisions

and well equipped analytical laboratories and other facilities;

4. Learning from experience

The gradual process of establishing equivalence under a general trade

framework gives regulatory agencies useful experience in dealing with

complicated discrepancies between national systems. Regulatory agencies

to search for information on how such trade arrangement work for other

products and other countries.

Challenges applied an Equivalence

Acceptance Conditions for Success (cont’)

5. Scope of the equivalence agreement

Negotiating an umbrella arrangement that lays down the general principles

that can be used to guide subsequent sectoral agreements on specific product

or product groups. Equivalence (of measures of conformity assessment

procedures) can thus established on case-to-case basis.

6. Building capacity and trust

a. Regulatory convergence between the parties is a process over time that

requires information exchange, mutual learning, training and trust building.

b. Confidence between the parties is thus an important conditions for making it

possible to establish and maintain equivalence. This is particular important

with regard to the conformity assessment systems.

c. The negotiating parties should thus start the process with information sharing

and visits to each other’s facilities.

d. parties can assist each other in building capacity into the systems, making

the system of the exporting country capable of performing assessment

requires by the importing country

Challenges applied an Equivalence

Acceptance Conditions for Success

5. Scope of the equivalence agreement

Negotiating an umbrella arrangement that lays down the general principles

that can be used to guide subsequent sectoral agreements on specific product

or product groups. Equivalence (of measures of conformity assessment

procedures) can thus established on case-to-case basis.

6. Building capacity and trust

a. Regulatory convergence between the parties is a process over time that

requires information exchange, mutual learning, training and trust building.

b. Confidence between the parties is thus an important conditions for making it

possible to establish and maintain equivalence. This is particular important

with regard to the conformity assessment systems.

c. The negotiating parties should thus start the process with information sharing

and visits to each other’s facilities.

d. parties can assist each other in building capacity into the systems, making

the system of the exporting country capable of performing assessment

requires by the importing country

aa

Oppurtunities applied Equivalence Recognition in

APEC Region

Implementation of Equivalence in APEC Region Covered:

1. The parties will recognize export certificates issued by the participating

agencies, thus minimizing the requirements for further inspections and

analysis. The Certificates will ensure that exporter meets the importing

country requirements.

2. The agreements leaves inspection with the exporting country without any

Additional inspection and analysis on arrival.

3. The parties thus mutually accept each others health (animal, plant, food

safety) control and inspection systems as equivalent in order to ensure

compliance with applicable regulation and standards.

4. The agreement thus combines a required compliance of the judgment of

equivalence of conformity assessment procedures.

The Need APEC’s Trade Facilitation Approach

1. Analyse why are rejected at borders and publish in Trade Standard

Compliance Reports (TSCRs) which identify and address the bottlenecks

in order to furher facilitate trade;

2. Support the development of a sound country risk management systems

through assisting stakeholders to comply with technical regulatoions in

in order to enhance the transparancy of trade procedures;

3. Assiss testing, inspection and accreditation entities to achieve internationally

recognised accreditation thus enabling them to effer their services to clients

competetive prices. This results in a cut production costs of local companies

and reduce delays at the border;

4. Boost existing WTO SPS/TBT Enquiry Points active throughout developing

regions by feeding in new information on TFA requirements and providing

those involved in trading with access to an accurate and up to date

information base;

5. Support Small and Medium Enterprice (SMEs) to overcome SPS and TBT

related issues (eg. booster Equivalence/MRA), this minimizes the economic

distance travelled by good in order to reach their market.

THANK YOU VERY MUCH GRASIAS

TERIMA KASIH