Lesson 5: International Standards and Organizations
Topic 2: The SPS Agreement and Domestic Interests
The SPS Agreement provides guidance for the application of SPS measures in international trade. In this topic, you will learn how the SPS Agreement helps countries find a balance between domestic and international interests.
Objectives:
- Explain how responsibilities to domestic stakeholders might cause tension with international obligations
- Describe how the SPS Agreement allows countries to protect themselves while reducing trade barriers
- Recognize why it is important to consistently abide by the SPS Agreement in all trading relationships
The SPS Agreement is multilateral, meaning it applies equally to all Members. Every Member has the same rights and obligations when they are trading with other Members. International standard-setting organizations (IPPC, OIE, and Codex) help Members trade with one another by harmonizing measures that reduce trade barriers, while ensuring that trade stays safe. However, Members have many different types of relationships with other countries outside of the WTO framework. In addition, Members have many obligations to diverse domestic stakeholder groups. Is it possible to maintain all of these relationships while remaining consistent with the SPS Agreement? Yes, but it does take work. Provisions outlined in the SPS Agreement were designed to reduce trade barriers while ensuring safe trade. International trading partners are often interested in the reduction of trade barriers, while domestic stakeholders are concerned that trade will threaten their industries through the introduction of pests. Countries may have domestic laws that instruct the government to protect domestic producers from many types of threats beyond those discussed in the SPS Agreement. It is the National Plant Protection Organization’s responsibility to balance these competing interests in a manner that is timely, transparent, and technically justified. It is important to remember that the WTO Dispute Settlement Process is binding and carries the possibility of sanctions or concessions. This is not the case with almost any other type of international agreement.
The difference between voluntary commitments, such as those typically made in bilateral negotiations, and legally binding obligations made under the WTO should not be confused. With regard to relationships exempted from the SPS Agreement, such as Free Trade Areas and Customs Unions, it is important that the application of SPS measures is based on technical justification. Without justification for measures, countries risk losing credibility as responsible members of the international trade community. In addition, ongoing application of unjustified measures can result in the development of unrealistic expectations on the part of domestic producers, which will complicate future efforts to engage in the multilateral trade arena in a manner consistent with the SPS Agreement. While challenging, it is in a country’s best interest over the long term to maintain the balance between the interests of both international and domestic stakeholders.
The SPS agreement is designed to facilitate international trade by helping both importing and exporting countries. Although this policy might seem restrictive to individual countries, when viewed from the international perspective, its benefits are clear.
The following chart highlights the major benefits derived from adherence to the SPS Agreement. Hold your mouse over each obligation box to learn its benefit.
It takes effort to understand and apply the SPS Agreement properly, but the benefits of application and active participation in the international trade community far surpass those of autonomy.
The SPS Agreement provides guidance for the application of SPS measures in international trade. Sometimes the responsibility to protect domestic producers makes it challenging to implement the SPS Agreement. However, there are legally binding potential consequences for a country that does not follow the obligations of the SPS Agreement. The SPS Agreement provides guidance for countries to both reduce trade barriers and ensure safe trade, but it takes work to strike the proper balance between competing domestic and international interests.
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