Christiane Wolff Agriculture and Commodities Division

World Trade OrganizationChristiane.Wolff@wto.org

WCO Regional Workshop on Strategic Initiatives for Trade Facilitation - Mercator

Programme

Trade facilitation in the context of the SPS Agreement

Outline

• Brief overview of SPS Agreement

• Relationship between SPS and TF Agreements

• Relevant work of Standards and Trade Development Facility (STDF)

3

• a multilateral framework of rules and disciplines to guide development, adoption, and enforcement of sanitary and phytosanitary (SPS) measures

• applies to SPS measures which may, directly or indirectly, affect international trade

SPS Agreement

4

SPS measures include:

All types of measures

end product criteria

processing methods

quarantine measures

certification

inspection

testing

sampling …

some also covered under TFA

Measures with these objectives:

Food safety

Animal health protection

Plant health protection

Protection from invasive species

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Recognizing the right to protect human, animal, plant life or health

Avoiding unnecessary barriers to trade

What is the objective of the SPS Agreement?

Facilitating safe trade

Development/adoption of SPS measures

• SPS measures should be:

– non-discriminatory

– science-based (risk assessment)

– not more trade-restrictive than necessary to achieve ALOP

– Transparent

• Article 3: Members are encouraged to “harmonize” or base national measures on international standards, guidelines and recommendations (Codex, IPPC and OIE)

SPS Agreement: International standards

Risk assessmentOR

SPS Measures must be based on:

International standards

Standard-setting organizations

food safetyCODEX

plant healthIPPC

animal healthOIE

standards, guidelines, recommendations including on inspection, sampling, testing…

link to TFA Articles 5 and 10.3

SPS Agreement: International standards

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Enforcement/implementation of SPS measures

•Members required to avoid unnecessary trade disruption andtransaction costs for traders when performing control,inspection and approval procedures (Article 8 and Annex C)

•no undue delays; information requirements limited to what isnecessary; non-discriminatory fees (not higher than actual costof service), non-discrimination in siting of facilities and selectionof samples; procedure to review complaints, take correctiveaction, etc.

Annex C closely linked to TF

SPS Agreement International standards

For example, relevant Codex standards include:

• Principles for Food Import and Export Inspection and Certification (CAC/GL 20-1995)

• Guidelines for the Exchange of Information between Countries on Rejections of Imported Foods (CAC/GL 25-1997)

• General Guidelines on Sampling (CAC/GL 50-2004)

• Recommended Methods of Sampling for the Determination of Pesticide Residues for Compliance with MRLs (CAC/GL 33-1999)

Important to involve standard-setting bodies in TF work

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Examples of specific trade concerns (STCs) raised in SPS Committee

• Japan – Pesticide maximum residue level (MRL) enforcement system - raised by China, US

• Indonesia's port closures – raised by China, NZ, EU, US

• EU, Greece - Inspection and testing procedures for imported wheat - raised by Canada

TF issues already discussed in SPS Committee

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Relationship between SPS and TF Agreements

“nothing in this Agreement shall be construed asdiminishing the rights and obligations of Membersunder the TBT and SPS Agreements.”

BUT…..

some of the provisions in the TF Agreement may beconsidered as "SPS-plus", possibly resulting inobligations going beyond those contained in the SPSAgreement

Final provisions, para. 6 TF

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“SPS-plus”

Provide advance rulings besides

tariff classification and origin

(TF Art. 3)

Publish wide range of information related to

import/export requirements and

procedures

(TF Art. 1)

Border Agency Cooperation

(TF Art. 8)

Inform on detention of goods and facilitate test

procedures

(TF Art. 5) Allow pre-arrival processing /

Publish average release times

(TF Art. 7)

Freedom of transit: Limit formalities and

documentation requirements

(TF Art. 11)

Review and publish fees and charges

(TF Art. 6)

Review and reduce import/export transit

formalities

(TF Art. 10)

Considerations for implementation

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• awareness of SPS/customs officials regarding rights/obligations under all relevant WTO Agreements; need for coordinated approaches, systems

• involvement of SPS officials in TF needs assessments; opportunity for SPS entities to benefit from increased funding opportunities

• national SPS and TF committees/bodies, Enquiry Points need to communicate, have contact points in each other’s structures

• TA providers in SPS/TF need to have familiarity with both areas

Global partnership in SPS technical cooperation

Partners: FAO, OIE, WHO, World Bank, WTO (includes participation Codex/IPPC Secretariats)

• Coordination mechanism among providers of SPS technical cooperation to strengthen coherence, avoid duplication and enhance results

• Knowledge platform for sharing experiences, identification and dissemination of good practice, discussion of cross-cutting topics

• Funding for development and implementation of projects that support compliance with international SPS requirements to gain and maintain market access

Research in Southeast Asia and Southern Africa

• How are SPS measures implemented in specific countries and for specific products? Focus on Article 8/Annex C

• Can we reduce SPS transaction costs (and increase competitiveness) while maintaining/strengthening health objectives? Any good practices?

• No direct link to TF Agreement – but opportunity to enhance dialogue and leverage additional Aid for Trade resources to improve SPS border management capacity

Context

• Outdated border clearance procedures and excessive red tape are greater barrier to trade than tariffs (WB, 2011)

• Performance gap between health/SPS agencies and others

• Lower performing countries:

• Much more physical inspection

• Longer import / export lead times

0%

5%

10%

15%

20%

25%

30%

2010 2012 2014

Private sector % rate of satisfaction with selected border agencies

(bottom quintile respondents)*

Customs

Quality and Standards

Health/SPS

Source: World Bank Logistics Performance Index

Findings from SE Asia Study: SPS-related procedural obstacles to trade*

For instance: • Complex and lengthy procedures

• Excessive document requirements (registration, licences, fees)

• Formal / informal fees

• Limited information (transparency)

• No complaints / appeal procedures

• Arbitrariness and unpredictability

Kees van der Meer. 2014. Implementing SPS Measures to facilitate safe trade: Principles and Practice in Cambodia, Lao PDR, The Philippines and Thailand: http://www.standardsfacility.org/facilitating-safe-trade

Consequences

• More controls than justifiable

• Longer than necessary waiting times

• Uncertainty

• Increased costs for traders, sometimes also for government

Findings from SE Asia Study*

…before the border? …at the border?

Do the procedural obstacles occur…

• Duplicative document requirements by importing/exporting countries

• No distinction between mandatoryand voluntary standards

• Overlapping jurisdiction between government agencies

• (Multiple) inspections, tests and sampling

• Repeated document checks

• Long waiting times

• Lack of coordination between border agencies (e.g. opening hours)

Kees van der Meer. 2014. Implementing SPS Measures to facilitate safe trade: Principles and Practice in Cambodia, Lao PDR, The Philippines and Thailand: http://www.standardsfacility.org/facilitating-safe-trade

Conclusions from SE Asia Study

• SPS measures may result in justifiable transaction costs based on the need to protect health

• Sometimes, ineffective and inefficient SPS measures result in

poor health protection – and disrupt trade more than necessary

• Opportunities to enhance health protection and reduce costs

through better implementation of the SPS Agreement, e.g.:

• Increased harmonization with international (Codex, IPPC, OIE) standards

• Improved transparency

• Use of a risk-based approach

Various practical solutions exist

Where to start?

• Improve transparency

• Reduce document requirements

• Reduce waiting times

• Reduce possibilities for rent-seeking

• Coordinate with trading partners

• Implement a risk-based approach (inspections)

Advanced solutions

• Single windows

• Single electronic windows

• One-stop border posts

Other STDF work relevant to TF

• Study on national SPS coordination mechanisms (2012)

– Many countries have SPS coordination mechanism, with varying degrees of effectiveness. Only some include customs.

– Recommendations: raise awareness, ensure high-level buy-in, clarify organizational mandate, build on existing mechanisms, engage all stakeholders, communication strategies, take pro-active approach to sustainability…

Importance of linkages between National SPS and

TF Committees

Projects

• Close to 140 SPS projects developed / implemented with focus on market access

• Examples relevant to TF:

• Azerbaijan – Strengthening phytosanitary inspection and diagnostic services at borders

• COMESA – Breaking barriers, facilitating trade (i.e. focus on improving development/adoption of SPS measures)

• IPPC – e-phyto - pipeline

For more information

• WTO website

– www.wto.org/sps

– WTO Secretariat informal note on the relationship between TF and SPS Agreements

• STDF website

– www.standardsfacility.org

– thematic topics, projects, virtual library