Tamanna ChaturvediConsultant

Indian Institute of Foreign Trade

Tamanna ChaturvediConsultant

Indian Institute of Foreign Trade

SPS Issues for Indian Agricultural Exports SPS Issues for Indian Agricultural Exports

%

20091947

?NTBstariffs

Two Way Dilemma

How do you ensure that the country’s consumers are being supplied food safe to eat?

How can you ensure strict health & safety regulations are not being used as an excuse for protecting domestic producers?

WTO Agreement on Sanitary and Phyto Sanitary MeasuresWTO Agreement on Sanitary and Phyto Sanitary Measures

The right to protecthuman, animal or plant life or health

Avoiding unnecessary barriers to trade

SPS stands for Sanitary & Phytosanitary Measures

SPS or TBT ?

human or animal health

from food-borne risks

human health from

animal- or plant-carried

diseases

animals and plants from

pests or diseases

examples:

pesticide residues

food additives

human disease control

(unless it’s food safety)

nutritional claims

food packaging and

quality examples:

labelling (unless

related to food safety)

pesticide handling

seat belts

SPS Measures TBT Measures

Standard-setting organizations

food safetyCODEX

plant healthIPPC

animal healthOIE

Codex = Joint FAO/WHO Codex Alimentarius CommissionOIE = World Organization for Animal HealthIPPC = International Plant Protection Convention (FAO)

HarmonizationArticle 3

Member Countries are encouraged to use International standards.

It allows countries to set their own standards

Scientific JustificationShould be applied only to the extent necessary to protect

Non Discrimination

On what basis??

To what extent???

Equal Treatment??

Key Provisions of SPS Agreement

Key Provisions of SPS Agreement

1. Non-discrimination2. Scientific justification

• harmonization• risk assessment• consistency• least trade-restrictiveness

3. Equivalence4. Regionalization5. Transparency6. Technical assistance/special treatment7. Control, inspection and approval procedures

Members shall ensure

that any SPS

measure is:

Scientific justification Article 2.2

applied only to the extent necessary to protect human, animal or plant life or health (least trade restrictive)

based on scientific principles

not maintained without sufficient scientific evidence

except as provided for in Article 5.7

Scientific Justification Articles 3 & 5

Scientific Justification Articles 3 & 5

OR

Measures must be based on

International StandardsInternational Standards

Risk assessment

How is risk assessment done?How is risk assessment done?

• SPS measures to be based on assessment of risks to human, animal or plant life or health,

taking into account risk assessment techniques developed by international organizations.

available scientific evidences; process and production methods; inspection & sampling methods; prevalence of specified disease or pests; existence of pests/disease-free areas,etc

relevant economic factors & cost effectiveness of alternate approaches

• Avoid arbitrary/unjustifiable distinctions in the levels in different situations if these result in disguised restrictions

Members may provisionally adopt SPS measureswhen relevant scientific information is

insufficienton the basis of available information

In such circumstances, Members shallseeks to obtain additional information to

assess riskreview the measure within a reasonable

period of time

Exception: Provisional measuresArticle 5.7

No unjustifiable discrimination– between Members with similar conditions– between own territory and other

Members

Non-discriminationArticle 2.3

SPS permits Members to impose different sanitary and phytosanitary requirements on food, animal or plant products sources from different countries, provided that they "do not arbitrarily or unjustifiably discriminate between countries where identical or similar conditions prevail".

EquivalenceEquivalence

Members shallAccept SPS measures of other Members as equivalent

If the exporting country objectively demonstrates that its measures achieve the

same ALOP as the importing country

Equivalence of Phytosanitary Measures

Equivalence of Phytosanitary Measures

Examples of Phytosanitary Equivalence

• Alternative treatments of wood packaging material (ISPM Nº 15)

• Phytosanitary measures to mitigate risks of fruit flies (pest free areas, area of low pest prevalence, pest free places of production, treatments, risk mitigation systems, inspection)

Disease free areas Article 6 Disease free areas Article 6

• Adaptation of SPS measures to regional conditions, including pest- or disease- free areas, differing climatic conditions & different pest or diseases or food safety conditions so as to lead to the development/imposition of different SPS requirements

• Exporter to demonstrate (reasonable access to be given for inspection/testing)

TransparencyArticle 7 & Annex BTransparencyArticle 7 & Annex B

Members shallestablish an Enquiry Point

ANDdesignate a Notification Authority

notify other Members of new or changed SPS regulations when

no international standard exists OR

the new regulation is different than the international standard

regulation may have significant effect on trade

AND

When to notify?When to notify?

Emergency measures IMMEDIATELY!!

Regular measures

Allow 60 day comment period!!Allow 60 day comment period!!

When modifications are still possible(draft text)

Transparency timelineTransparency timeline

1. Drafting of the regulation

2. Publication of a notice

3. Notification to other Members

4. Draft text upon request (or website)

5. Receive & discuss comments

7. Adoption of the regulation

8. Publication of the regulation...

Tim

e...

9. Entry into force of the regulationMin. 6 months

Min. 60 days

6. End of comment period

Special & Differential Treatment and Technical Assistance

Articles 9 & 10

Members...

• ...shall take account of the special needs of developing countries

• ...should accord longer time frames for compliance

• ...agree to facilitate provision of Technical Assistance

India’s ConcernIndia’s Concern

 MFN range NTM% NTM Description

Switzerland 0-0  50% Labelling requirement

Japan 0-10 8.60%Product ch.requirement to protect human health

USA 0-6 60%Authorization to protect plant health

Tariff and Non Tariff barriers For Herbal exports

Code Description Major Export Destinations

030613

Frozen Shrimps & Prawn

United States, Japan, United Kingdom,Belgium

030614 Frozen Crabs Japan, USA, UK, Spain

030619 Frozen others USA, Japan, China, Singapore

030379 Fish with bones frozen China, Hongkong,South Korea, Singapore

080132 Shelled Cashewnuts USA, Netherlands,UK, UAE

080121 Brazilnuts in shelled Spain, UK, Italy

080450 Gauava & Mango UAE

080300 Banana UAE, Nepal, Saudi Arabia

160520 Shrimps & Prawn Japan, USA

160540 Other crustaceans China, UAE

200110 Cucumber & gherkins USA, Spain

200190

Vegetable pp by Vinegar UAE, Saudi Arabia

200310 Mushrooms USA, Netherlands

200830 Citrus fruit UK

Our target destinations

Markets with 100% SPS/TBT

Markets with less than 50%

SPS/TBT

Markets with more than 1

SPS/TBT

1.Fish & Fish Preparations

USA, Hong Kong, Singapore, Thailand, Australia, Canada, Switzerland, Japan

Thailand, Malaysia, Japan

USA, Japan

2.Fruits & Vegetables

Australia, Japan, USA, Saudi Arabia, Mexico, Bangladesh, Singapore, Canada, Egypt

- Australia, Japan, Mexico, USA, Singapore

NTM Coverage and Number of NTMs on Indian Exports

Analysis…Analysis…

• Widespread use of SPS/TBT both by developed & developing country markets.

• In major importing countries of Fruits and marine products, NTM coverage is 100%.

• Single product faces number of SPS standards in the same market.e.g. USA& Japan for fish and Australia, Japan, USA, Mexico & Singapore for fruits.

• Single product faces different import standards in different markets.

• Countries have different health standards for imports as against domestic production.

Tariffs and NTMs on Indian ExportsTariffs and NTMs on Indian Exports

(i) Tariffs and NTMs together imposed on Oilseeds in Taiwan Cane Sugar in Bangladesh Bovine meat in Egypt Crustaceans in Thailand Malt extract in USA Bangladesh

(ii) Only NTMs Pepper in Canada Rice in Nigeria Oilseeds in USA, Taiwan Cane sugar in Malaysia, Indonesia Fish products in USA Tea in USA

Understanding Technical regulations

Incidence of product withdrawals

Rapid Alert Notifications from EU FOR Indian Products

Plant Conditions

Any plant of the following genera:

Every such plant shall be grown in Quarantine until the Director isSatisfied that it is free from plant pests and may be released or that it Is diseased and must be destroyed.

Ananas

Citrus

Ipomoea

Musa

Groundnut and any other plant of the genus Arachis

May only be imported as Decorticated seeds.

Rice and any other plant of the genus Oryza intended for propagation

   

Every consignment shall on importation be immediately handed to the Director who shall cause the plant to be grown in quarantine

For one generation.

Complete ban from India

Complexities of buyer’s requirement

Maximum levels for Aflatoxins in spices in various developed countries

GRAPES CODEX U.S.A. EU JAPAN CANADA AUSTRALIA NEW ZEALAND

AZINPHOS-METHYL 1.0 5.0 1.0   5.0 2.0 2.0

ALPHA-CYPERMETHRIN 0.5   0.5 2.0 0.5 0.05  

BENALAXYL 0.2   0.2   0.1 0.5 0.5

CARBARYL 5.0 10.0 3.0 1.0 5.0 5.0 3.0

CHLOROTHALONIL 0.5   3.0 0.5 0.1 10.0 5.0

CHLORPYRIFOS 0.5   0.5 1.0 0.1 1.0 1.0

DIMETHOATE 1.0 1.0 0.02   0.1 5.0 2.0

DITHIANON 3.0       0.1 2.0 2.0

ENDOSULFAN 1.0 2.0 0.5   1.0 2.0 2.0

FENARIMOL 0.3 0.2 0.3 1.0 0.1 0.1 0.1

IPRODIONE 10.0 60.0 10.0 25.0 5.0 20.0 10.0

MALDISON 8.0 8.0 0.5 8.0 8.0 8.0 8.0

METALAXYL 1.0 2.0 1.0   1.0 1.0 2.0

MYCLOBUTANIL 1.0 1.0 1.0 1.0 1.0 1.0 0.2

PERMETHRIN 2.0   0.05 5.0 2.0   0.5

PROCYMIDONE 5.0 5.0 5.0 5.0 1.0 2.0 5.0

TRIADIMENOL 2.0 1.0 2.0 0.5 0.1 0.5  

Comparison of CODEX level with Country standards for Fruits

Better off than CODEX

More stringent than CODEX

Countries varies in their SPS standards-case of Salmonella

Countries varies in their SPS standards-case of Salmonella

Importing Country

Regulations regarding Salmonella

Hong Kong Products may be subjected to lab examination or microbiological contamination & positive testing shipment refused entry

Japan Japanese Min of health reserves the right to test shipments

China No separate Salmonella specific requirements

Canada No separate Salmonella specific requirements for raw products

Korea No separate Salmonella specific requirements

Estonia Mechanically deboned meat is tested for salmonella at port of entry Positive testing denied entry

Salmonella widely present in domestic supply chains in USA however country claims to have has zero tolerance for the pathogen

Importing Country

Regulations regarding Fruits

Australia Strict attention to plant health(fumigation only using methyl bromide)

USA Strong official attention to product cleanliness, labeling for allergens & fumigation banned out.

EU In contrast Fumigation is already banned in EU

v      Spain Importance to testing on pesticide residue

v      Germany

Hardly any consignment tested

v      UK Most pesticide residue testing is undertaken for products at retail level

Customers of South Europe prefer large sizes of tropical fruits (pineapples, papayas & mango) whereas customers in North Europe prefer small fruits.

Different Operative Procedures for Conformity Requirements for Fruits

Traceability Requirements

Different Marketing Standards between countries

• Health control: food law, hygiene, microbiological criteria, contaminants, pesticides

• Plant Health: phytosanitary control• Marketing Standards: generic or specific• Other: food additives, food contact material, food

irradiation, novel foods, GMOs, labeling & organic products

Imports prohibited on the basis of Risk Assessment

Incompatible SPS Standards: case of Milk Production in IndiaIncompatible SPS Standards: case of Milk Production in India

Strict Packaging requirementStrict Packaging requirement

Strict Certification & Import Procedures: example of ChinaStrict Certification & Import Procedures: example of China

• Many regulations and requirements are updated frequently and often without prior notice.

• Possibility of variation in the documentation required for various products in various Chinese ports.

• A new and original phytosanitary certificate must accompany each consignment of fresh fruits, vegetables, or tree nuts.

• A tamper-resistant, bilingual label should be on the outside of each carton.

• The establishment number should be printed on the inner poly liner, poly bag, or vacuum bag.

• Although pre-approval is not mandatory, China’s General Administration of Customs (GAC) can require pre-import analysis if warranted.

Strict Labeling Requirements Strict Labeling Requirements

• A large amount of information has to be provided on the label in both English & Chinese.

• The establishment number should be printed on the inner poly liner, poly bag, or vacuum bag.

• In the case of Alcohol & Pre-packaged food– Labeling should be in Chinese.– Specific font sizes have to be maintained.

• In the case of milk & milk products– Labeling should be in Chinese.– Specific background colors have also been mentioned.

Few examples….

Let’s see what Pakistan has to ask for?

Produce Packing stationExporter

Point of departure

TransportPoint of entry

Importer Retailer

Code of practice EUREP-GAP

quality control by packing

Temperature and humidity

check

Control of compliance with code of

practices

Control of compliance with BRC

Quality control

selection packaging HACCP

Governmental SPS /

Vet control quality control temp check

Governmental SPS /

Vet control quality control

MRL control

Private specifications

/ protocols

Private specifications

/ protocols

Food quality and safety control

Micro costs of EurepGap compliance

Main Products Affected

31 (+ 2) disputes have invoked 31 (+ 2) disputes have invoked the SPS Agreementthe SPS Agreement

Report(s)

Adopted (9)

27% Panel

Established (4)

12%

Consultations - Pending (13)

40%

Agreed Solution (7)

21%

Equivalence Agreements status of IndiaEquivalence Agreements status of India

India is seeking equivalence agreements with the health authorities of major trading partners.

• The EIC has already been designated a competent authority by the European Commission (EC) for marine products and basmati rice and by the U.S. for black pepper.

• Similar recognition awaited from the EC for egg, milk, and poultry products.

• Equivalence agreements with Australia for marine products

• SriLanka for 86 items.

• It is negotiating an agreement in various sectors with Singapore and will soon have an agreement with Italy.

http://www.fao.org/es/esn/food/foodandfood_fruits_en.stmhttp://www.fao.org/es/esn/food/foodandfood_fruits_en.stm

www.ipfsaph.org

1. General

Policies which have no or minimal production or trade distortion effects Should not involve transfers from consumers or provide price support to producers.

2. Government service programmes

research pest and disease control training services extension and advisory servicesinspection services

3. Environmental programmes

Related to fulfillment of specific conditions including production methods or inputs under government programmes. Payment limited to increased costs or income loss due to compliance with the programme

4. Regional assistance

Producers must be in disadvantaged regions Compensate for loss of income or extra costs in undertaking production 

Contract Farming examples:

• Tomato cultivation in Punjab, Haryana and Rajasthan,

Mushrooms in Haryana,

Sunflower in Andhra Pradesh and Karnataka,

Gherkins in Karnataka

Fruits and vegetables in Tamil Nadu, Maharashtra and

Andhra Pradesh.

Other efforts

• Amul & NDDB for milk procurement• Sugarcane cooperatives in Maharashtra, • Green leaf satellite out growers to the South Indian tea

manufacturing industry, • Prawn aqua culture farmers of AP &• Poultry projects in West Bengal, Tamilnadu,

Maharashtra, Andhra Pradesh & Punjab.

Tamanna Chaturvedi

tchaturvedi@iift.ac.in

+91-11-26967558