SPS ISSUES IN THE NAFTA REGION

1
SPS ISSUES IN THE NAFTA REGION

• Paul Haddow
• Executive Director, International Affairs
• Canadian Food Inspection Agency
• Policy Disputes Information Consortium Mexico,
  March 6, 2002

2
Organization

• International Regulatory Framework
• Experience to Date in Avoiding/Resolving Disputes
• Future Challenges

3
The International Framework

• Trade Rules WTO, NAFTA
• International Standards Codex, OIE, IPPC/NAPPO
• Environmental Agreements Cartagena Protocol

4
Basic WTO Disciplines

• General obligations under the GATT
• Dont discriminate against imports (Art.III)
• Dont discriminate between exporting countries
  (Art. I)
• Tariffs only measure of protection (Art. II)
• not permitted in Free Trade Areas

5
Basic WTO Exception

• There are situations in which countries may
  discriminate against imports/between countries,
  under WTO rules
• before 1994/5 GATT Art. XX, including XX(b) -
  measures to protect human, animal and plant life
  or health
• after 1994/5 NAFTA WTO SPS agreements as
  elaborations of Art. XX(b) exception

6
Scope of SPS Agreements - WTO NAFTA

• Measures with objective of protecting human,
  animal or plant life or health
• from food/feed-borne risks pest or disease
  related risks and
• where measure affects international trade
• Risk-based not product-based

7
Essential SPS Rules

• Countries have the right
• to regulate for food safety, animal plant
  health
• chose own level of protection
• Countries have the obligation
• be transparent
• be consistent in cases of similar risks
• base regulation on scientific risk assessment
• use least trade restrictive option

8
SPS Agreements - other aspects

• Temporary measures
• insufficient scientific evidence
• obligation to seek evidence required review
  measure
• Equivalence other approaches to meet
  Appropriate Level of Protection
• Regionalize

9
International Standards

• National measures conforming to relevant
  international standards, guidelines or
  recommendations are deemed necessary and presumed
  to be consistent
• Relevant standards - a positive list
• for food safety -- Codex Alimentarius
• for animal health -- International Office of
  Epizootics
• for plant health -- International Plant
  Protection Convention

10
Implications

• 1995 marked the full intersection between
  international trade rules and Codex/OIE/IPPC
  texts
• on the up side, new authority for international
  standard setting bodies
• on the down side, new vulnerabilities to being
  used as back door to obtain relief from WTO/NAFTA
  disciplines

11
Whats Special About NAFTA?

• Provisional measures
• Equivalence
• Scientific expert groups
• Respondent chooses forum -- WTO or NAFTA
• Positive list of environmental agreements

12
Cartagena Protocol

• Environmental agreement to regulate international
  movement of living genetically modified organisms
  - not yet in force
• U.S. Canada two of largest exporters
• Canada signed April 2001
• U.S. not party to underlying convention
• Mexico center of diversity
• Mexico signed May 2000

13
The Framework Summed Up

• Science-based, rules-based, transparent, mutually
  reinforcing elements
• Provides a sound framework within which three
  governments manage/resolve SPS issues

14
Experience to Date in Avoiding/Resolving Disputes

• In WTO
• 3 panels
• EU Hormones risk assessment
• Australia Salmon risk assessment consistency
• Japanese Varietals risk assessment least trade
  restrictive transparency provisional measures
• SPS Committee
• Over 85 issues resolved
• transparency is key

15
NAFTA SPS

• No dispute settlement panels yet
• Dispute provisions have been used though
  (Canada-USA potato wart issue)
• Committee on SPS Measures
• Technical Working Groups report to Committee -
  Food Packaging, Labelling and Food Standards TWG
  being created

16
NAFTA - Unique Features

• Dispute Resolution Corporation
• Referral to group of experts possible at each
  stage Committee, Trade Commission, formal
  consultations and legal panel
• NAFTA Free Trade Commission (Trade Ministers) is
  unique

17
NAFTA TWGs

• Pesticides Animal Health Plant Health
  (NAPPO) Dairy, Fruit, Vegetable and Processed
  Food Meat, Poultry and Egg Inspection Food
  Additives and Contaminants Fish and Fish
  Products Veterinary Drugs and Feeds Food
  Packaging, Labelling and Food Standards (new)
• Some very active, others less so
• TWGs are engaged in cooperative initiatives,
  harmonization, information exchange

18
Day to Day Cooperation

• Hundreds of issues handled routinely between
  regulatory agencies
• Canada has always worked closely with U.S. - now
  even closer with U.S. and building with Mexico
• Tripartite preparedness exercises on FMD good
  example - also cooperation on BSE
• Use of formal dispute settlement therefore not
  good indicator of success in resolving disputes

19
Future Challenges

• There will always be some disputes
• Multilaterally
• Regulatory challenges from new diseases and
  technologies
• Potential weakening of science-based regulatory
  system
• animal welfare
• processed-based (not product-based) labelling
• precaution
• Capacity of developing countries to participate
  in developing and implementing obligations/rights

20
Challenges Continued.

• In the Hemisphere
• Revisit line-up of TWGs and SPS Committee
  priorities
• In FTAA, Canadian proposal for a SPS consultative
  mechanism pending end of negotiations in 2005