WTO jurisprudence on TBT and SPS Agreements, Agreement on Sanitary and Phytosanitary Measures

The first step is to understand what a SPS measure is and what a TB (technical barrier) is. Annex 1 of the TBT agreement tells us that TBs can be technical regulations, standards or conformity assessment procedures. A technical regulation is a “document which lays down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labeling requirements as they apply to a product, process or production method”. A standard is a “document approved by a recognized body that provides, for common and repeated use, rules, guidelines or characteristics for products or related processes and production methods, with which compliance is not mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labeling requirements as they apply to a product, process or production method”. Although international usage sometimes differs, a technical regulation is therefore mandatory, while a standard is voluntary. Finally, a conformity assessment procedure is “any procedure used, directly or indirectly, to determine that relevant requirements in technical regulations or standards are fulfilled”.

The point to note is that agricultural products can also be subject to the TBT agreement. So can some elements of human, animal or plant health, such as labeling or packaging. However, SPS measures defined in Annex A of the SPS agreement are outside the purview of TBT. This definition lists, “Any measure applied:

(a) To protect animal or plant life or health within the territory of the Member from risks arising from the entry, establishment or spread of pests, diseases, disease-carrying organisms or disease-causing organisms

(b) To protect human or animal life or health within the territory of the Member from risks arising from additives, contaminants, toxins or disease-causing organisms in foods, beverages or feedstuffs

(c) To protect human life or health within the territory of the Member from risks arising from diseases carried by animals, plants or products thereof, or from the entry, establishment or spread of pests

(d) To prevent or limit other damage within the territory of the Member from the entry, establishment or spread of pests.” Hence, there is a difference in focus across the SPS and TBT agreements. The intention behind the measure is the determinant of a SPS measure, whereas the type of measure is the determinant of a TB measure. Also, general measures for protecting the environment, consumer interests or animal welfare are outside the purview of the SPS agreement, except to the extent that they are covered in the quote above. Indeed, part of the problem with environmental issues and consequent unilateral measures is that there is no WTO agreement on environmental measures, apart from Article XX of GATT mentioned above. This is not very different from SPS issues before 1995 or TBT issues before 1979.

The TBT agreement is simpler. It has 15 Articles and 3 Annexes, apart from a Preamble. The more important Articles are now highlighted. Article 1 has general provisions and through Annex 1, defines technical regulations, standards and conformity assessment procedures. What is noteworthy is that unlike the 1979 Code, technical regulations now include process and production methods (PPMs), in addition to products, provided these methods affect characteristics of the product, that is, provided they are incorporated or product-related PPMs. Article 2.1 states the MFN and national treatment principles and this should be borne in mind when reacting to Article 2.3 of the SPS agreement, which permits such deviations. Article 2.2 accepts environmental protection as a legitimate objective for imposition of technical regulations. Article 2.4 requires adherence to international standards, but also permits deviations. “Where technical regulations are required and relevant international standards exist or their completion is imminent, Members shall use them, or the relevant parts of them, as a basis for their technical regulations except when such international standards or relevant parts would be an ineffective or inappropriate means for the fulfillment of the legitimate objectives pursued, for instance because of fundamental climatic or geographical factors or fundamental technological problems.” Article 2.7 states that equivalent technical regulations of other countries must be accepted, even if those are different. The problem with implementing this, is in deciding what is a “like product”. And when adopted technical regulations differ from international standards, Article 2.9 has a system of notification. Through Annex 3, Article 4 requires government standardizing bodies to comply with a Code of Good Practice. Article 11 provides for technical assistance to developing countries, while Article 12 provides for special and differential treatment for developing countries. There is indeed some ambiguity in the present TBT agreement, for instance in areas of non-product-related or unincorporated PPMs or non-mandatory standards, as opposed to mandatory technical regulations. It is unreasonable to expect that a legal agreement will never have ambiguity or shades of grey. Had that been the case, there would have been no disputes and no case law. However, there haven’t been too many dispute resolution cases under the TBT agreement. There are just four.

Other than the Preamble, the SPS agreement has 14 Articles and 3 Annexes. It is necessary to highlight and quote some of the more important Articles. Article 2.2 states, “Members shall ensure that any sanitary or phytosanitary measure is applied only to the extent necessary to protect human, animal or plant life or health, is based on scientific principles and is not maintained without sufficient scientific evidence, except as provided for in paragraph 7 of Article 5.” And in Article 2.3 we have, “Members shall ensure that their sanitary and phytosanitary measures do not arbitrarily or unjustifiably discriminate between Members where identical or similar conditions prevail, including between their own territory and that of other Members. Sanitary and phytosanitary measures shall not be applied in a manner which would constitute a disguised restriction on international trade.” This thus is a sanctioned deviation from the MFN and national treatment principles. However, the quote also makes it clear that this cannot be uncontrolled deviation from MFN and national treatment. Article 3 requires harmonization and Article 3.2 mentions adherence to international standards. However, there is also a sanctioned deviation from international standards in Article 3.3, provided there is scientific justification. “Members may introduce or maintain sanitary or phytosanitary measures which result in a higher level of sanitary or phytosanitary protection than would be achieved by measures based on the relevant international standards, guidelines or recommendations, if there is a scientific justification, or as a consequence of the level of sanitary or phytosanitary protection a Member determines to be appropriate in accordance with the relevant provisions of paragraphs 1 through 8 of Article 5. Notwithstanding the above, all measures which result in a level of sanitary or phytosanitary protection different from that which would be achieved by measures based on international standards, guidelines or recommendations shall not be inconsistent with any other provision of this Agreement.” In cases of deviation from international standards, there is a notification system. Article 4 requires acceptance of equivalent standards used in other countries, subject to the TBT kind of problem about identifying an identical or like product. Article 5 requires risk assessment and choice of an appropriate level of SPS measures. Article 5.7 deserves to be flagged, because it incorporates the precautionary principle. “In cases where relevant scientific evidence is insufficient, a Member may provisionally adopt sanitary or phytosanitary measures on the basis of available pertinent information, including that from the relevant international organizations as well as from sanitary or phytosanitary measures applied by other Members. In such circumstances, Members shall seek to obtain the additional information necessary for a more objective assessment of risk and review the sanitary or phytosanitary measure accordingly within a reasonable period of time.” Article 9 has technical assistance for developing countries, while Article 10 has provisions on special and differential treatment.

Like the TBT agreement, there have been four cases involving the SPS agreement and none of these involve India.6 The case law under the SPS agreement is however more important than the case law under the TBT agreement. For instance, there is the precautionary principle and the WTO is yet to take a position on the precautionary principle. There are also grey areas in risk assessment, as distinct from risk management. Rather interestingly, most panels seem to have ruled in favour of the complainant. 4140 SPS notifications have been submitted since 1995, 137 WTO member countries have established and identified enquiry points to respond to requests and 111 have identified national notification authorities.