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This is certainly an opportune time to talk about the current environment
for global trade and the reasons for adherence to the World Trade Organization's
Agreement on Sanitary and Phytosanitary measures.
We are benefiting from a new era, and by this I am referring to the era of
globalization. This globalization is the result of three simultaneous
democratizations, that of finance, technology and information. These
democratizations also gave birth to a new power source in the world,
the Internet. In the case of sanitary issues the Internet makes the job
for decision-makers much more complicated, as everyone can learn of emerging
situations simultaneously and at times trading partners can learn about these
events before we can educate our decision- and policy-makers. Not only is the
information dissemination global, but the speed of distribution has drastically increased.
However, what is really driving this globalization is the basic human desire for
a better life - a life with more freedom to chose how to prosper, what to eat,
where to live, where to travel, what to import. In order to maximize the benefits
of this globalization, while minimizing the potential health risks resulting from
this expanded trade is that we have the rules of the WTO - SPS Agreement. We need
to continue to challenge those countries who are depriving their citizens of these
opportunities by not adhering to the provisions of the SPS Agreement.
During this new era of globalization, the role of Government matters more, not less.
The challenge to countries today is to improve on the quality while reducing size of
their governments. A truly competitive government today has to strive for a lean,
efficient and transparent civil service. In the case of agricultural trade, it is
the quality and transparency of our animal and plant health infrastructures that
will give us this competitive advantage.
The WTO - SPS Agreement was one of the outcomes of the Uruguay Round negotiations
of the GATT (General Agreement on Tariffs and Trade). Although the GATT has dealt
with trade issues since 1947, it addressed issues dealing with life and health only
in a brief paragraph, Article XXb. As the negotiations on agriculture progressed
with efforts to reduce and eventually eliminate tariffs and quotas, it became
evident that countries were being limited to using health reasons for blocking
trade. Therefore, it was the task of the Uruguay Round negotiators to come up
with clear science-based rules which would allow countries to have sovereign
rights in setting measures for protecting public, animal and plant health, while not
creating unjustified barriers to trade. The SPS Agreement was signed in Marrakesh in
1994 and entered into force in 1995. Simultaneously, the GATT was transformed into
the World Trade Organization (WTO).
The purpose of this paper is to discuss the major provisions of the SPS Agreement
and to analyze progress made thus far in the incorporation of these provisions as
part of our new global trade disciplines. With the signing of the Agreement came
the creation of the SPS Committee with the responsibility for monitoring its
implementation. Since 1995 the Committee completed and adopted its first triennial
review of the operations of the Agreement, which I will use to illustrate current progress.
The SPS Committee developed new transparency procedures and formats for countries to
notify proposed changes in their regulations that would have an impact on trade.
This exercise allows trading parties to comment on scientific merits and trade
impact of proposed rules before entering into force. These new procedures standardized
reporting and made better use of electronic information sharing.
Sanitary measures applied by importing countries, unless directly based on international
standards must be justified through a scientific risk analysis. In the various paragraphs
of Article 5 the Agreement identifies obligations and lists of allowable factors that can
be taken into account during risk management decisions. This is without a doubt one of the
more important provisions of the Agreement, and the one found to be violated by importing
parties in all recent formal dispute cases. Most countries are changing their regulatory
practices by incorporating risk analysis into the process, as is the case of the U.S. when
drafting a rule on regionalization of animal health conditions in exporting countries.
Article 3 encourages international harmonization of SPS measures by basing them on existing
international health standards adopted by the three relevant standard-setting organizations.
The Agreement recognizes the International Office of Epizootics (OIE) for aspects of animal
health and zoonoses, the Codex Alimentarius for food safety and public health, and the
International Plant Health Convention (IPPC) for aspects of plant health. While the
advantages of harmonization are clear for the benefits of trade as well as for consumers,
its application is still infrequent.
Article 4 encourages Members to recognize measures as equivalent, even if these
differ from those applied by others, as long as they meet the desired level of
protection identified by the importer. The main purpose of this provision is
to focus on the desired outcome rather than unjustifiably restricting trade strictly
by focusing on a specific risk management method. Using this provision countries are
also encouraged to reach bilateral and multilateral recognition of their systems, thereby
reducing the need for individual inspections.
With the formation of the WTO, came revised and consistent procedures for dealing with
dispute resolution. Often the simple exposure of a country's actions at the SPS Committee
level, rather than the formal process, has sufficed for an early resolution of the trade
disruption. An additional option has been to use the mediation under Article 12:2,
where both disputing parties voluntarily agree to seek the mediation efforts of the
Committee chair. The various options and outcomes of recent formal cases will be
discussed and analyzed.
While the implementation of the SPS Agreement has certainly facilitated international
trade and has minimized trade disruptions, we will be facing significant challenges
due to the current world environment facing international agricultural trade. Within
the framework of global trade, attention will have to be given to certain issues not
completely covered by the SPS Agreement but which threaten to create major trade
disruptions if not addressed properly. I will be discussing some of the more
important ones, but not limited to biotechnology, animal welfare, the environment,
consumer concerns, morality in trade, compliance with WTO rulings, and the precautionary
principle.
In order to maximize the benefits of the SPS Agreement we need to all work together
in addressing these challenges by forming new partnerships. As I indicated earlier
under globalization, these partnerships have to consider new dimensions, all
stakeholders, consumers, producers as well as officials. We need to consider
the global network, we need to look at our overseas counterparts as partners
rather than adversaries. We must develop strategies as to how to improve the
output of the international standard-setting organizations. We will need to
develop better national strategies as well as stronger collaboration with
countries having similar interests.
There are still many problems to be solved. At times national regulatory processes
are held captive because of selfish domestic political interests, or highly publicized
paranoia on food safety or environmental risks. In conclusion, we must take advantage
of these great opportunities for improving health, consumer choices and increases in
incomes through international trade.
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