Trade facilitation in the context of the SPS Agreement WCO Regional Workshop on Strategic Initiatives for Trade Facilitation - Mercator Programme Christiane Wolff Agriculture and Commodities Division World Trade Organization Christiane.Wolff@wto.org
Outline Brief overview of SPS Agreement Relationship between SPS and TF Agreements Relevant work of Standards and Trade Development Facility (STDF)
SPS Agreement 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 3
SPS measures include: Measures with these objectives: Food safety Animal health protection Plant health protection Protection from invasive species All types of measures end product criteria processing methods quarantine measures certification inspection testing sampling some also covered under TFA 4
What is the objective of the SPS Agreement? Recognizing the right to protect human, animal, plant life or health Avoiding unnecessary barriers to trade Facilitating safe trade 5
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 SPS Measures must be based on: International standards OR Risk assessment
SPS Agreement: International standards Standard-setting organizations food safety CODEX animal health OIE plant health IPPC standards, guidelines, recommendations including on inspection, sampling, testing link to TFA Articles 5 and 10.3
Enforcement/implementation of SPS measures Members required to avoid unnecessary trade disruption and transaction costs for traders when performing control, inspection and approval procedures (Article 8 and Annex C) no undue delays; information requirements limited to what is necessary; non-discriminatory fees (not higher than actual cost of service), non-discrimination in siting of facilities and selection of samples; procedure to review complaints, take corrective action, etc. Annex C closely linked to TF 9
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
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 11
Relationship between SPS and TF Agreements nothing in this Agreement shall be construed as diminishing the rights and obligations of Members under the TBT and SPS Agreements. BUT.. Final provisions, para. 6 TF some of the provisions in the TF Agreement may be considered as "SPS-plus", possibly resulting in obligations going beyond those contained in the SPS Agreement 12
Provide advance rulings besides tariff classification and origin (TF Art. 3) 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) Publish wide range of information related to import/export requirements and procedures (TF Art. 1) Freedom of transit: Limit formalities and documentation requirements (TF Art. 11) SPSplus Border Agency Cooperation (TF Art. 8) Review and reduce import/export transit formalities (TF Art. 10) 13
Considerations for implementation 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 14
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 30% 25% 20% 15% 10% 5% 0% Private sector % rate of satisfaction with selected border agencies (bottom quintile respondents)* 2010 2012 2014 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 Consequences More controls than justifiable Longer than necessary waiting times Uncertainty Increased costs for traders, sometimes also for government 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
Findings from SE Asia Study* Do the procedural obstacles occur before the border? Duplicative document requirements by importing/exporting countries No distinction between mandatory and voluntary standards Overlapping jurisdiction between government agencies at the border? (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 highlevel 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