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  • Vrinda Gaur

The Plight of the Developing World Under the Sanitary and Phytosanitary Agreement

This article is authored by Vrinda Gaur a 2nd Year Student of Law at Dr. Ram Manohar Lohiya National Law University, Lucknow.


Introduction

The first time national food safety and animal and plant health measures were put forth on the negotiation table was during the deliberation of the GATT Agreement 1947. With the establishment of the World Trade Organisation on 1st January 1995, a new Agreement on Sanitary and Phytosanitary (SPS) Measures as a part of the GATT Agreement came into force, superseding the old principles of human, animal and plant health protection measures as enumerated in the GATT Agreement.


The Sanitary and Phytosanitary (“SPS”) Agreement is a part of the World Trade Organization (WTO) agreements that aims to protect human, animal, and plant life, or health from risks arising from the introduction of pests, diseases, or contaminants in trade. The factors behind the demand for the evolution of an SPS Agreement were poor dispute settlement mechanism of the Standard Code and the expansion of trade tariffs and quotas to agricultural goods. While the agreement seeks to promote free trade while protecting human, animal, and plant health, there are concerns that it may disproportionately impact the interests of the Least Developed Countries (“LDCs”). Furthermore, although parties reached a consensus during the Uruguay Round that the agreement would cater for a mechanism that would open international markets for developing nations, it was also a foreseen risk that it could be used as a protectionist device by the developed countries.


To add to the dilemma, only a few developing nations were a part of the negotiation table for the agreement making it more a product of the developed world. Although both the developed and developing nations acknowledge the requirement of such an agreement for equitable facilitation of international trade, a paucity of technical, financial and human resources further added to the list of issues for the convenient implementation of the Agreement. This piece aims to critically analyse the shortcomings of the SPS instrument from the perspective of developing or LDCs.


Major Concerns of the Developing Nations

Implementing the SPS Agreement centres around two crucial propositions: non-discrimination and scientific justification. All provisions of the agreement ranging from harmonisation (Article 3), equivalence (Article 4), risk assessment ( Article 5) etc., function based on the above two propositions. As a result of noncompliance with the principles of non-discrimination, and enforcement of a measure not backed by sufficient scientific evidence, the SPS Agreement has turned into a protectionist tool in the hands of the developed nations to promote their interests, as well as protect their local producers and products.


Furthermore, a major concern of the developing nations is the harmonisation issue. Harmonisation requires a member nation to base its sanitary measures on international standards and guidelines. The agreement further recommends the standards and policies set by three major organisations: (i) Codex Alimentarius Commission, (ii) the International Office of Epizootics, and the International and Regional Organisations operating within the framework of the (iii) International Plant Protection Convention to be looked up to, while looking for a suitable sanitary measure. As easy as it may seem, a direct correlation exists between the likelihood of a country being part of the organisations mentioned above and their per capita incomes. Owing to their low level of per capita income, developing counties are unable to voice their appropriate level of protection to be considered by these organisations for formulating standards, rules and guidelines. Hence, the rules, standards and guidelines of such organisations usually follow the paradigm enumerated by the developed nations due to lack of representation of the developing nations and the LDCs.


A second essential provision of the agreement pertains to equivalence (Article 4). “Equivalence” refers to the principle that countries can use different measures to achieve the same level of human, animal, or plant life or health protection without creating unnecessary trade barriers. It means that if a country has different regulations or standards for a particular product, they provide an equivalent level of protection to the rules or standards of another country. This essentially entails that the product be considered equal and not subject to additional trade barriers. The issue here is that the developing nations call for stricter implementation of this provision. The developed nations, on the other hand, want the measure to be similar to ‘their’ standards in terms of outcome and implementation. The essence of the agreement requires an analogous measure, whereas the developed nations demand a facsimile. The reason behind such a demand on the part of the developed nation is the need for more trust in the food safety system of the developing countries. However, expecting developing nations to implement an exact measure would go against the interests of such nations, considering their economic and human resources limitations.


Next in line is the issue of transparency. Transparency under the SPS Agreement refers to the principle that countries must provide clear and timely information about their SPS measures to other WTO members to ensure that they are based on science, and do not create unnecessary trade barriers. The main concern here is that SPS measures vary from country to country; are often very intricate to understand, and subject to frequent changes, thus leaving exporters in a state of ambiguity about the sanitary legislation in their export markets. Members must also formulate enquiry and notification points to provide smooth access to information about their market conditions to nations who wish to trade with it. Though formulating such points has been easy for the developed countries, developing nations need to catch up due to the lack of efficient tools to gather such information promptly. Furthermore, while developed nations have played a prompt role in notifying such market changes through legislation, developing countries have often complained that their inputs and recommendations are often neglected and ignored. Developing countries experience many problems with transparency related to the lack of financial and human resources that are necessary to follow, understand and comment upon developments in the regulatory frameworks of their trading partners. Setting up a mechanism that would help collect and disseminate information to the country that appeals to the forum for such information was a collective suggestion of the developing nations. However, affirmative actions still await.


Concerning the special and differential treatment issue covered under Article 10 of the Agreement, developing nations are dissatisfied with the non-acknowledgement of this provision by the developed countries. Developing countries have requested a more extended period for commenting upon new measures introduced by the developed nations in addition to an increase in compliance with such measures. All this stems from the lack of economic and human resources, as seen previously. Developing nations have requested a period of 12 months between the publication of a measure and its actual enforcement. They have further asked for the implementation in specific time frames in particular areas and issues. However, more voices should be given to their legitimate concern.


Another concern of the developing nations is the dispute settlement mechanism of the SPS agreement. The dispute settlement mechanism is quite lackadaisical and provides a long way out. Resource-wise, mainly financially, it is quite draining. The settlement process takes around two to three years before a favourable decision of the panel or the appellate body will bring about any regulatory changes. One such instance is the delay in the decision of the Appellatte Body in the US-COOL case between USA and Canada. Initially the issue came up in 2008, however the decision was delivered no earlier than 2011. In such a long period of ambiguity, exporters usually look for alternative channels for trade, as awaiting the ruling of such bodies would cause severe economic losses. Moreover, the cost of proceeding with the complaint is quite hefty. Hence, developing nations often partner with a developed nation to divide the cost. However, the result of such a partnership is often harassment of the developing country by the developed county.


Conclusion

The limitations in own country’s administrative arrangements for SPS requirements, lack of knowledge of SPS requirements among government officials; incompatibility of SPS requirements with domestic production or marketing methods; poor access to financial resources; insufficient time permitted for compliance, and all of the aforementioned difficulties can be summed up as challenges faced by the developing world.


One possible solution that could assist in dealing with most of the above issues is to provide representation to the developing and the LDCs in organisations such as the Codex Alimentarius Commission and the International Office of Epizootics that are responsible for formulating health safety guidelines, rules and standards of international trade. Such representation would ensure maintenance of the requisite standards and appropriate level of protection for the developing countries, as well as ensure harmonising them with those of the developed nations, making the compliance procedure less onerous than before.


Moreover, greater cooperation among the developing countries in SPS issues is also fundamental. Co-operation could be in the forms of joint national efforts at conducting risk assessments for SPS measures; everyday R&D activities in food production; co-operative efforts in technical assistance; training in administrative and production processes; exchange of information, and new initiatives on SPS matters, both of WTO origin and private standard. Creation of a financial pool that would alleviate the economic burden of the developing nations, while instituting complaints and disputes before the dispute settlement body is also an excellent measure, to begin with. The focus should be on addressing short-term issues. The redressal of these core issues will make way for settling the unaddressed long-term concerns.

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