Fisheries Economics

7.6.1. Sanitary and Phytosanitary Measures

The Agreement on the Application of Sanitary and Phytosanitary measures (called the SPS Agreement) was reached and signed at the Uruguay Round of Multilateral Trade Negotiations on 15 April 1994. The text of the SPS Agreement was included in the final Act of the Uruguay Negotiations. It came into force on 1.1.1995 with the establishment of the World Trade Organization (WTO). Till then, the General Agreement on Trade and Tariffs (GATT) served as the umbrella organization for all issues relating to the international trade and it was replaced by the WTO in 1995.

The SPS Agreement deals with food safety and animal and plant health regulations. In other words, it enables WTO member nations to specify standards for food safety and animal and plant health on a rational, science-based approach. However, such standards set by one country should not discriminate between countries where similar or identical conditions prevail.

The SPS measures are applied to:

(i) to protect human or animal life from risks arising from additives, contaminants, taxins or disease –causing organisms in their food

(ii) to protect human life from plant or animal-carried diseases;

(iii) to protect animal or plant life from pests diseases or disease-causing organisms;

(iv) to prevent or limit other damage to a country from the entry establishment or spread of pests.

Thus, the SPS Agreement envisages protection of health of humans animal and plant life forms. However, it does not cover issues like environmental protection, consumer interests or animal welfare, etc as there are other WTO provisions such as the TBT Agreement or article XX of the GATT (1994) to deal with them.

The GATT also dealt with the above issues brought under the SPS Agreement. But, many countries feared that such health standards could be used as a protectionist measure to restrict imports from other countries. It is obvious that every nation wants to protect its people and animal and plant life from health hazards by promulgating safety standards. WTO also permits the countries to set their own health standards. But, when such standards restrict import so as to protect domestic producers from outside economic competition then it becomes a protectionist trade barrier.

WTO stipulated that nations should establish “Enquiry Points” to inform other countries on the health standards specified by them so that exporting countries could adhere to it. Further, the WTO has set up the SPS Committee to serve as a forum for exchange of information among member governments on all aspects relating to the implementation of the SPS Agreement. This committee reviews compliance with the agreement, discusses matters with potential trade impacts, and maintains close co-operation with the appropriate technical organizations.

When a dispute arises on the basis of the SPS Agreement between countries, then, the usual WTO dispute settlement procedures are followed besides obtaining opinion from technical exports.