CETA and Regulatory Cooperation: SPS and TBT

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CETA and Regulatory Cooperation SPS and TBT

• Crina Viju
• Institute of European, Russian and Eurasian
  Studies
• Carleton University

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Outline

• Non-tariff barriers and their importance
• International regulatory cooperation
• Canada - EU historical regulatory cooperation
• Regulatory approaches
• CETA regulatory cooperation or convergence?

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Non-tariff barriers

• Sanitary and Phytosanitary (SPS) and Technical
  Barriers to Trade (TBT) measures
• Regulations inhibit, restrict and eliminate trade
• Do they have a legitimate purpose?
• Protect population from food safety hazards, from
  fraud (falsely labelled products)
• Uruguay Round (1994) 2 distinct WTO
  sub-agreements
• Agreement on the Application of Sanitary and
  Phytosanitary Measures (SPS) and the Agreement on
  Technical Barriers to Trade (TBT)

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Non-tariff barriers (cont.)

• SPS
• Science as justification for imposition of
  barriers to trade
• Major disagreements between Canada and the EU
• On science itself
• Science should be the sole factor in the
  establishment of SPS import regulations?
• 2 high profile SPS disputes since 1995
• EU import ban on Genetically Modified Organisms
  (GMOs)
• EU import ban on beef produced using growth
  hormones.

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Non-tariff barriers (cont.)

• TBT
• Major contentious area labelling requirements
  for imports
• Increased consumers interest regarding credence
  attributes animal welfare child labour use of
  GMOs environmentally friendly use of
  pesticides
• TBT agreement
• Import labels cannot be required on the basis of
  how a product is produced (except when final
  product is discernibly different)
• Other sectors chemicals (labelling requirements
  and EU REACH programme), car industry,
  pharmaceutical (different approval times).

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International regulatory cooperation

• Three principal forms (Young and Peterson, 2014)
• Approximation
• Align national rules
• Negotiated mutual recognition
• Bilateral specific regulations equivalent in
  effect preserves regulatory autonomy,
  equivalence of regulatory objectives
• Mutual recognition agreements (MRAs)
• Acceptance of differences in national standards
  specified bodies in each party can certify that
  products produced in its territory conform to the
  standards of the other party
• EU
• Move away from negative top-down Commission-led
  regulatory harmonization to mutual recognition
  with positive harmonization of essential safety
  and performance requirement (Single Market).
• Regulatory capacity by late 1990s, regulatory
  leader
• Active role of European standards-making bodies.

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International Regulatory Cooperation (cont.)

• 1996 Market Access Strategy
• the completion of the single market regulatory
  regime now places the Community in a position to
  pursue a more outward looking trade policy in
  this field.
• 2006 Global Europe
• The EU must play a leading role in sharing best
  practice and developing global rules and
  standards.
• making European norms the reference for global
  standards.
• 2007 European Commission new trade agenda, deep
  FTAs with strong regulatory component
• a combination of agreement on common principles,
  regulatory dialogues, and flexible mechanisms to
  facilitate the resolution of specific non-tariff
  barriers, increased regulatory transparency and
  convergence towards EU or international
  standards, at least in selected priority areas.

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International Regulatory Cooperation (cont.)

• Canada (following the US approach)
• Industry driven standards
• Minimal government intervention to assure
  consumer, health and environmental safety
• Science and risk-management based on US standards
  in many areas
• Preferential trade agreements
• Importance placed on mutually accepted standards,
  regulations and conformity assessment process
  equivalence
• Obligation to provide justification if
  equivalence not granted
• Federal structure provinces important regulators.

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Canada-EU Agreements

• 1976
• Bilateral Framework Agreement for Commercial and
  Economic Cooperation Joint Cooperation Committee
• Bilateral agreements for various trade issues,
  sectoral agreements and bilateral consultations
  or dialogues for various sectors
• 1997 cooperation between customs administrators
• 1998 Mutual Recognition Agreement (MRA)
• good manufacturing practices for pharmaceuticals
  and mandatory conformity procedures in the
  following sectors medical devices,
  tele-communications, terminal equipment,
  information technology equipment and radio
  transmitters, electrical safety, electromagnetic
  compatibility and recreational craft.
• 1999 competition agreement (cooperation between
  Competition Bureau Canada and the European
  Commission)
• 1999 Veterinary Agreement
• 2003 Wine and Spirits Agreement
• 2009 Civil Aviation Safety Agreement
• 2009 Comprehensive Air Services Agreement
• 2005 negotiations on a Trade and Investment
  Enhancement Agreement (TIEA)
• Regulatory cooperation, gov. procurement,
  financial services, IPR

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CETA

• October 2008
• Joint study Assessing the Costs and Benefits of
  a Closer EU-Canada Economic Partnership
• Benefits
• 0.08 increase in EU GDP
• 0.77 increase in Canada GDP
• Assumption Doha Round completed and successful.
• March 2009
• Joint Report on the EU-Canada Scoping Exercise
  main areas of negotiations
• Trade in goods and services investment
  government procurement regulatory cooperation
  intellectual property temporary entry of
  business people competition policy labour and
  environment.
• NTB regulatory divergence and technical
  regulation discrepancies (Guerin and Napoli,
  2009)

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Non-tariff barriers

• Import licensing, customs valuation rules,
  pre-shipment inspection, rules of origin,
  investment measures
• Technical Barriers to Trade (TBT) in industrial
  sectors and Sanitary and Phytosanitary (SPS)
  measures in agriculture
• Canadian perceptions packaging, labelling,
  certification (TBT) and health and safety
  standards (SPS)
• European perceptions sanitary approval for
  foodstuffs, regulations on spirits (i.e. SPS),
  labelling and packaging requirements for products
  and differences in technical and safety standards
  (TBTs). (Guerin and Napoli, 2008)

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EU, new FTAs and regulatory cooperation

• EUs new approach to regulatory cooperation
• EU-South Korea (2011) equivalence based on
  international standards (UN Economic Commission
  for Europe) negotiated mutual recognition
  comprehensive only in one sector (motor vehicles
  and parts) deeper obligations for electronics,
  chemicals, pharmaceuticals
• EU-Singapore (2013) far-reaching
  liberalization of services markets commitments
  from Singapore to improve access to public
  procurement, reduce TBT in cars, electronics and
  renewable energy improved protection for GIs
• EU-Japan (gt2013) to address Japanese regulatory
  barriers
• EU-TTIP (gt2013) sectoral negotiated mutual
  recognition (except for agricultural sector).

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CETA What has been achieved?

• Chapter 6 TBT Chapter 7 SPS Chapter 26
  Regulatory Cooperation Chapter 27 Conformity
  Assessment Chapter 29 Dialogues and Bilateral
  Cooperation
• Without limiting the ability of each party to
  carry out its regulatory, legislative and policy
  activities, the Parties commit themselves to
  further developing their regulatory cooperation
  in light of their mutual interest in order to
  (a) prevent and eliminate unnecessary barriers to
  trade and investment (b) enhance the climate for
  competitiveness and innovation, including through
  pursuing regulatory compatibility, recognition of
  equivalence, and convergence and (c) promote
  transparent, efficient and effective regulatory
  processes that better support public policy
  objectives and fulfil the mandates of regulatory
  bodies, including through the promotion of
  information exchange and enhanced use of best
  practices.

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CETA What has been achieved?

• Regulatory cooperation activities on a voluntary
  basis
• recognizing the right of each Party to determine
  their desired level of health, safety,
  environment, and consumer
• Explain why no initiation or withdrawal from
  cooperation
• Ongoing bilateral discussions on regulatory
  governance
• Sharing information, consult, sharing proposed
  regulations that might have an impact on the
  other party at an early stage
• Regulatory Cooperation Forum
• Setting for discussion, assist individual
  regulators, review initiatives, encourage
  bilateral cooperation
• Outside bodies to conduct assessments on product
  standards
• Parties have to accept decisions.

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CETA What has been achieved?

• Cooperation in motor vehicles regulations
• International standards on a voluntary basis
• Cooperation in biotechnology
• Shared objectives
• Exchanging information on policies, regulations
  and risk assessment processes promoting
  science-based approval process low level
  presence of GMOs minimize adverse trade impacts
  of regulatory practices.
• Chapter 24 Trade and Labour
• ILO
• Chapter 25 Trade and Environment.

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CETA and regulatory cooperation

• Not achieving the high level of ambitions
  expressed during the negotiations
• However, can TBT and SPS barriers be removed
  through trade agreements?
• Not really
• CETA results in substantial progress by
  establishing various institutional channels
  through which sector-specific NTBs can be
  addressed over time
• Elimination of small regulatory differences,
  double testing, inspection procedures
• Importance of Canada in the middle between the US
  and the EU plus TTIP negotiations.