What is Sanitary and Phytosanitary (SPS) Measures under the WTO Multilateral Agreements.
According to the Agreement on Agriculture (AoA), the Sanitary and Phytosanitary (SPS) measures are any measure taken to:
- Protect plant or animal or health from risks because of the entry, establishment or spread of pests, diseases, disease-carrying or disease-causing organisms with the territory of the country.
- Protect animal or human life or health from risks because of additives, contaminants, toxins or disease causing organisms in foods, beverages or feed-stuffs within the territory of the country.
- Protect human life or health within from risks because of diseases carried by animals, plants or products thereof or from the entry, establishment or spread of pests within the territory of the country.
- Prevent or limit other damage because of the entry, establishment or spread of pests within the territory of the country.
Two basic principles of the agreement are:
- Non-discrimination principle.
- Scientific justification principle.
On food safety, the Sanitary and Phytosanitary (SPS) agreement has adopted some standards, guidelines and recommendations. The measures are considered as non-arbitrary, non-discriminatory and non-protectionist and based on scientific justification.
However, many developed countries are setting their standards at levels higher than the standards as per the agreement. Besides, standards are often adopted without consulting developing countries and without considering their concerns and issues. Since the global standards have been made in conformity with the standards prevailing in the developed nations, compliance of these standards by the developing countries has been difficult restricting the exports from these countries.
These measures thus become trade barriers when:
- The standards in the country are lower than that for imports.
- Countries standard conformity processes vary.
- Countries measures are not recognized by other countries.
For all these, developed countries have kept food safety on top in their political agenda. Food safety is a ‘good’ with a high-income elasticity of demand. It means as income rises, the demand for food products with higher Sanitary and Phytosanitary (SPS) measures also rise. Consumer organizations and NGOs all over the world have also become more assertive in protecting the human, animal and plant life or health from unsafe food items. These factors have led to promoting a negative effect on the prospect of export from developing nations.
The costs that developing countries incur in compliance of the Sanitary and Phytosanitary (SPS) measures can be divided into:
- Production cost.
- Conformity cost.
Production costs include costs of new inputs and technology involved in the production of goods to meet the SPS requirements. The conformity costs comprise the cost of certification and control. Developing countries incur more cost of compliance than the developed countries.
Despite these difficulties in the developing countries, in the long run better SPS standards would result in the lessening of health risks and benefit the consumers. However, the enforcement of these standards has caused three types of problems in the developing countries.
- Institutional Problems: It has been difficult for the countries to decide the point of inspection and conformity and who should provide the scientific basis to settle disputes. Besides, countries lack technical assistance to help exporters to match the requirements.
- Higher Costs of Compliance: Since the SPS standards chancre periodically, scaling-up the levels to be attained, the developing countries incur heavy costs for compliance that standards.
- Discrimination Due to Bilateral Agreements: Even as the AoA encourages multilateral agreements on SPS measures, member countries enter into bilateral agreements favoring imports from some countries over others leading to discrimination against other nations.