29–30 June 2005

Private sector standards discussed as SPS Committee adopts two reports

The SPS Committee completed its second review of the operation of the WTO Sanitary and Phytosanitary Measures Agreement and adopted a report on special treatment for developing countries on 29 and 30 June 2005.

The two-day wide-ranging meeting also included the committee’s first ever discussion of how governments should act when standards required by their private sectors are tougher than the government’s own requirements. (The formal meeting followed two days of off-the-record informal meetings.)

And among the recurring themes were two that have become regulars: mad cow disease (BSE or bovine spongiform encephalopathy); and regionalization (the requirement that governments recognize regions within or straddling other countries as being safe sources for imports of food and animal and plant products, instead of basing their measures entirely on national boundaries, Article 6 of the Sanitary and Phytosanitary Measures Agreement).

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Review of the SPS Agreement

North America and the Asia Pacific supplied almost two thirds of all notifications on SPS measures in the first 10 years of the agreement. Africa and the Middle East supplied only 2%. But since 1999 the largest number of SPS technical assistance activities involving the Secretariat has been in Africa (23 out of 89).

Animal health and “zoonoses” (animal diseases that affect humans) have dominated concerns about specific measures raised in the committee over the 10 years — accounting for 40% of concerns, with plant health at 29% and food safety at 27%. And in turn, almost two thirds of concerns related to animal health and diseases, were about mad cow disease (BSE) or foot and mouth disease.

The largest number of concerns raised in the committee were about measures in developed countries (124 out of 223 measures), and developed countries initiated the discussion of the largest number of topics (143 out of 246 issues). (These numbers should be treated as an indication: apparent inconsistencies arise partly because of different ways of counting members when they raise a concern as a group.) Nevertheless, developing countries featured strongly on both sides (as initiators, supporters or subjects of the concerns raised). By contrast, least-developed countries played almost no part — having initiated discussion of only two out of 245 concerns.

In the decade, 30 formal disputes involving SPS measures have been brought to the WTO, the latest in July 2003, with 12 of them referred to panels, seven notified as settled through consultations without a panel ruling.

These are just some of the facts compiled in the report of the second review adopted at this meeting — the first review was in 1999. The report provides a comprehensive roundup of the committee’s work and the operation of the SPS Agreement.

Its 47 pages (in the English version) cover all the main topics that the committee handles:

  • consistency (Article 5.5, which requires members to be consistent in the level of protection their measures are designed to provide)

  • equivalence (Art.4, which says governments should recognize other countries’ measures even if they are different, so long as an equivalent level of protection is provided)

  • transparency (notification of measures and related issues)

  • monitoring the use of international standards

  • technical assistance

  • special and differential treatment for developing countries

  • regionalization (Art.6)

  • specific trade concerns (including countries’ specific measures)

  • use of ad hoc consultations (or “good offices” of the chair to resolve problems)

  • cooperation with the three “sisters” (standards-setting organizations, i.e. Codex, OIE and IPPC)

  • clarification and definition of terms

  • examination of the relationship between certain articles

  • undue delays (in applying certain provisions and measures, such as recognizing equivalence)

  • good regulatory practice

  • Art.8 and Annex C (essentially about who should bear the costs of inspections as requests for inspection visits increase)

The 40 recommendations in the report are compiled into a three-and-a-half page list. The committee has agreed to a programme that includes continued work on many of these headings, with equivalence, transparency, monitoring international standards, technical assistance, special and differential treatment, regionalization and specific trade concerns remaining as permanent agenda items.

The report was the result of several sessions of meetings, including two informal meetings earlier in the week. It will be publicly available shortly as document G/SPS/36.

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Special and differential treatment

The SPS Committee has failed to develop any “clear recommendations” on the five proposals on special treatment for developing countries as assigned by the General Council. The five are part of a larger set being considered by various relevant committees. The 1 August 2004 General Council decision (sometimes called the July 2004 package) calls for “clear recommendations for a decision … no later than July 2005.”

However, after lengthy consultations, the SPS Committee has adopted a 13-page report in which the committee agrees to build on earlier discussions and work toward a decision, starting with “initial elements” that consider five broad issues:

  • how developing countries can be informed promptly about SPS measures that are important for their trade

  • how to help them identify and evaluate the measures that could cause trade problems

  • how to help them make better use of the committee to identify and resolve specific trade concerns

  • how to help them identify and request technical assistance more effectively

  • how to improve technical assistance

The countries that submitted the original five proposals said some could be revised. Currently they envisage increasing the obligations of countries introducing new measures, to ensure that exports from developing countries will not suffer unduly.

For example, this could be achieved by requiring that new standards can only be adopted after the impact on developing and least-developed countries has been assessed, and cannot be adopted until those countries are able to comply with them. Also proposed is a requirement for a country introducing a new measure to ensure that poorer countries have the technology and facilities to comply with the measure, and if required to provide technical assistance or withdraw the measure immediately. And so on.

Some other countries argue that these requirements, in their present form, are unrealistic. They say that the proposals cover all members, meaning that developing countries seeking to introduce new measures would have to provide technical assistance to other developing countries. And they argue that measures designed to save lives cannot be withdrawn in order to wait for other countries to acquire the technology to meet the conditions.

The discussion, and the report itself, combines two approaches:

  • technical assistance to help developing countries meet the animal and plant health and food safety requirements of their import markets, and

  • special treatment for developing countries built into the measures themselves, such as giving these countries more time to adjust

The report looks at the concerns that underlie those two approaches and tries to strike a balance between the two. It includes a discussion of how effective technical assistance has been, the efforts taken by the countries and organizations supplying the assistance to ensure that it responds to real needs, and the opportunities that the committee offers for developing countries to raise their concerns.

The report will be publicly available shortly as document G/SPS/35.

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Specific trade concerns

Private sector standards. This is an issue that has never been discussed in the SPS Committee although it has been raised in the Technical Barriers to Trade (TBT) Committee. St Vincent and the Grenadines complained about requirements for exporting bananas and other products to European supermarkets. The “EurepGap” requirements are “good agricultural practices” (GAP) set by the Euro-Retailer Produce Working Group (Eurep), which the EU described as a consortium representing major retailers.

St Vincent and the Grenadines, supported by Jamaica, Peru, Ecuador, and Argentina, complained that EurepGap’s SPS and TBT requirements are tougher than the governments’ requirements — government rules should apply, they said.

Some called for SPS Article 13 to be clarified. It says:

“Members are fully responsible under this Agreement for the observance of all obligations set forth herein. Members shall formulate and implement positive measures and mechanisms in support of the observance of the provisions of this Agreement by other than central government bodies. Members shall take such reasonable measures as may be available to them to ensure that non-governmental entities within their territories, as well as regional bodies in which relevant entities within their territories are members, comply with the relevant provisions of this Agreement. In addition, Members shall not take measures which have the effect of, directly or indirectly, requiring or encouraging such regional or non-governmental entities, or local governmental bodies, to act in a manner inconsistent with the provisions of this Agreement. Members shall ensure that they rely on the services of non-governmental entities for implementing sanitary or phytosanitary measures only if these entities comply with the provisions of this Agreement.”

Argentina added that this should be resolved somewhere or “20 years of work” would be wasted.

The EU said it is not in a position to intervene because the private sector organizations say they are reflecting consumer demand. Eurep is not the only body setting its standards. If any of these claim the standards are EU standards, then WTO members should take this up with Brussels, the EU said. Otherwise the concerns should be raised with the non-governmental organizations concerned, it said.

Mexico cautioned that this is a complex “systemic” issue, and members should not reach hasty conclusions.

New Zealand apples. New Zealand complained about an 84-year Australian ban on its apples because of a “perceived risk of fire blight”, a disease caused by a bacteria, Erwinia amylovora. Although the disease is serious, scientific evidence, upheld by a recent WTO dispute ruling (see below), shows that it cannot be spread by mature apples, New Zealand argued. In particular, Wellington is concerned about the time Australia is taking to assess the risk after New Zealand first raised the issue bilaterally 19 years ago.

“After six years of promises, extended deadlines, drafts and apparent action, we are now still no clearer as to when a final risk analysis will at last be issued,” New Zealand said.

This was the first time New Zealand raised an SPS issue about an Australian measure. It said it hoped a solution could be found to satisfy both sides. “If this cannot be achieved, however, we regret that further options for resolving this longstanding issue cannot be ruled out.”

The EU, US and Chile said they had similar problems with Australia.

Australia said it recognizes New Zealand’s concern. Part of the delay has been caused by the reorganization of Biosafety Australia, the agency dealing with SPS issues. Canberra will deliver a scientific assessment “as soon as possible”, it said.

Recent dispute ruling. Earlier in the meeting, the US drew attention to the most recent ruling by the WTO panel considering Japan’s restrictions on US apples due to fireblight. The panel ruled (WT/DS245/RW of 23 June 2005) that the revised restrictions imposed by Japan were not justified — Japan imposed revised restrictions after it lost a first challenge by the US.

Kava. Ambassador Ratu Tui Cavuilati of Fiji complained about a UK ban on the use of kava-kava, obtained from a shrub with aromatic roots, in unlicensed medicinal products. Fiji provided a lengthy counter argument to the UK’s assertion that kava-kava is associated with rare cases of liver toxicity — only three cases have emerged out of 450 million pills dispensed worldwide between 1990 and 2000, the ambassador said. He described kava as an alternative to synthetic anxiolytics and tranquillizers, particularly benzodiazepines, for treating non-psychotic anxiety, without the side-effects of benzodiazepines. Kava-kava is also consumed as a beverage.

The EU Commission, which speaks on behalf of its member states, said the UK is currently reviewing the measure.

Other concerns. These included several concerns about BSE restrictions (broadly that some restrictions on some products are unjustified under the latest OIE guidelines), failure to recognize (or delays in recognizing) some regions or zones are free of a disease such as foot and mouth disease and classical swine fever, and failure to notify SPS measures or to give enough time for other members to comment (e.g. US complaints about Indian and Thai measures).

Some concerns were reported settled, including China’s questions to Japan and Canada, following bilateral consultations. See the end of this note for a fuller list of issues.

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(‘Adaptation to regional conditions, including pest- or disease-free areas and areas of low pest or disease prevalence’)

This has become a major issue of concern to some members, particularly the European Union and some Latin American countries, which are keen to see parts of their territories recognized as free from certain diseases or pests even when the disease exists in other parts.

The chairperson reported that consultations showed members differ on how to deal with this. Part of the difference is whether it is possible to distinguish between administrative and technical guidelines.

Some countries (e.g. Chile, Argentina, Peru, Brazil and the EU) want the SPS Committee to establish clear and predictable administrative guidelines as soon as possible, even while the international standard-setting organizations (OIE, which deals with animal health, and IPPC, which deals with plant protection) are preparing technical guidelines.

Some other members (e.g. New Zealand, Canada, the US) argue that the committee should wait for the other organizations to produce their guidelines and then work on any gaps.

Part of the debate is also about whether guidelines should specify some kind of deadline for recognizing that a region is free of a disease or a pest.

Article 6 of the SPS Agreement requires governments to recognize regions within or straddling other countries as being safe sources for imports of food and animal and plant products, instead of basing their measures entirely on national boundaries. The regions concerned can extend beyond a single country’s borders as well as be contained within a country.

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Clarification of provisions

Japan asked for clarification of the new OIE Code on BSE and its relationship to obligations under the SPS Agreement. The question arises from the code’s recommendation that products such as milk, semen, hides and skins, and deboned skeletal muscle meat can be traded without risk even if they originate in areas with BSE provided certain conditions are met (such as not being contaminated). This code uses the phrase “should not require” (“… veterinary administrations should not require any BSE related conditions …”), whereas OIE codes normally use the phrase “should require” (i.e. should require certain conditions).

Japan wanted the OIE to confirm that this would not prevent governments from taking measures resulting in a higher level of protection than the international standard, as is normally permitted under the OIE’s Animal Health Code and the WTO’s SPS Agreement (Art.3.3). The OIE confirmed this.

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Next meeting

26–27 October 2005, with informal meetings on 24-25 October
(The committee has tentatively agreed that next year’s meetings will be in the weeks 27-31 March, 26–30 June and 9–13 October 2006.)

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These are some of the trade concerns raised in the meeting:

  • Australia’s import restrictions on New Zealand apples — concerns of New Zealand

  • EU EUREP/GAP requirements for bananas — concerns of St. Vincent and the Grenadines

  • US import procedures for fruits and vegetables — concerns of the EU

  • Japan’s import restrictions on EU exports of animal and plant products — administrative procedures — concerns of the EU

  • Mexico’s restrictions on US poultry — concerns of the US

  • Chinese Taipei’s BSE-related import restrictions on non-ruminant products — concerns of the us

  • EU’s geographical BSE risk assessment classification of India — concerns of India

  • Japan’s import requirements for Indian mangoes — concerns of India

  • Thailand’s FDA rule 11 — concerns of the US

  • India’s non-notification of food regulations — concerns of the US

  • Panama’s inspection regime — meat products — concerns of Costa Rica

  • Argentina’s import restrictions on semen and bovine embryos due to BSE — concerns of the EU

  • Japan’s restrictions on US beef — concerns of the US

  • Brazil’s lack of recognition of regionalization and disease-free status for classical swine fever — concerns of the EU

  • Australia’s import restrictions on EU pig meat and pig meat products — concerns of the EU

  • Venezuela’s import permit procedures for potatoes, meat and onions — concerns of Canada

  • Australia’s restrictions on table grapes — concerns of Chile

  • EU requirements for wood packaging material — concerns of the US

  • US phytosanitary import restrictions (including schlumbergera and other plants in growing media) — concerns of the EU

  • United Kingdom’s proposed regulations for piper methysticum (kava-kava) — concerns of Fiji

  • Lifting of import restrictions on EU exports of bovine and bovine products — information from the EU (resolved)

  • Bahrain, Oman and Kuwait’s ban on EU exports of pomace olive oil — information from the EU (resolved)

A few others were added under “other business”.

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Find out more …

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Chairperson: Mr Gregg Young, US