The World Trade Organisation and the SPS Agreement
The WTO (World Trade Organisation) has 164 state members, with 20 in the waiting line. Located in Geneva, the WTO is set out to resolve trade disputes and trade policies, as well as review national trade policies.
What does the WTO do?
The WTO recently announced the Doha Development Agenda negotiations to help facilitate trade (e.g. the Trade Facilitation Agreement), expected to reduce global trade costs by 14% and boost trade by $1tn USD which will have the biggest gains in the poorest companies. Another success of the WTO is the decision that took place in Nairobi’s 2015 conference where exporters agreed to eliminate subsidies on agricultural exports, which is a significant success in the sector. The WTO is a committee based organisation where observers discuss policies which are being implemented, and ensuring countries follow the rules that are created by the organisation.
What are the Sanitary and Phytosanitary (SPA) measures?
The WTO has a principal of non-discrimination, meaning that any benefits given to one nation should be given to all other nations. FTAs (Free Trade Agreements) are allowed within the WTO as its aim is to increase farther access to other markets. The National Treatment Principle is set on the basis that you should treat foreign and domestic producers equally. There is an obligation to notify the WTO of any Application of Sanitary and Phytosanitary (SPS) measures, including, establishing new Maximum Residue Levels (MRLs), which is important for exporters and farmers so that adjustments can be made by members in order to comply with when entering those markets. The WTO has recently implemented the Agreement of Agriculture, and the Agreement on Sanitary and Phytosanitary Measures as well as being a key player in agricultural agreements.
An agreement on SPS for the WTO and members, given that $1.75bn USD of agricultural products traded, and $1.49bn of food traded each year. However, issues around aflatoxins, diseases such as Bovine spongiform encephalopathy (BSE), commonly known as mad cow disease, fruit flies and maximum residue limits can result of heavy losses domestically due to the loss of confidence by consumers and the trading partners. As part of the WTO, the objective of the SPS agreement is to recognise that members need to protect human or animal health, or plant life.
One SPS measure is to protect human or animal health, and any risks arising from additives, contaminants, toxins or diseases organisms in food, drink and feedstuff. MRLs and the notification of these before they enter into force are important, such as the notification of aflatoxin limits in nuts.
Another SPS measure is taken to protect animal or plant life from pests, diseases, or diseases causing organisms, such as the measure to avoid swine fever.
SPS agreements should be based on science at an international standard.
The WTO and SPS agreements created a partnership, the Standards and Trade Development Facility, a global partnership that helps developing countries increase their capacity to implement international standards and hence their ability to gain and maintain market access.