Technical barriers to trade and sanitary and phytosanitary measures

1. Why regulations are trade barriers

Once tariffs fell, regulations became the main obstacle to trade. A State may require that toys contain no lead, that food be free of pests, or that labels be in a particular form. These are legitimate. But differing national rules raise costs for exporters, who must adapt products and prove compliance in each market, and rules can be drafted to favour local producers. GATT Article XX(b) allowed health measures as an exception but gave little guidance. The Tokyo Round Standards Code (1979) was a first attempt; the Uruguay Round produced two agreements in Annex 1A: the Agreement on Technical Barriers to Trade (TBT) and the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS).

2. The dividing line

An SPS measure is defined by its purpose (Annex A, paragraph 1): a measure applied to protect human or animal life or health from risks arising from additives, contaminants, toxins or disease-causing organisms in food, beverages or feedstuffs; to protect human, animal or plant life or health from pests and diseases; or to prevent other damage from pests. All other technical regulations and standards fall under TBT, which expressly excludes SPS measures (TBT Article 1.5). A rule on pesticide residues in grapes is SPS; a rule on the labelling of grape varieties or the safety of electrical appliances is TBT.

3. The TBT Agreement

• Technical regulation (Annex 1.1): a document laying down product characteristics or related processes and production methods, compliance with which is mandatory, including labelling and packaging requirements.
• Standard (Annex 1.2): approved by a recognised body, compliance with which is not mandatory. Standards are governed by the Code of Good Practice in Annex 3.
• Conformity assessment procedures (Annex 1.3): testing, inspection and certification to determine whether requirements are met (Articles 5 to 9).

The obligations for technical regulations are in Article 2:

• Non-discrimination (Article 2.1): treatment no less favourable for imported products than for like domestic products and like products from other countries.
• Necessity (Article 2.2): regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create. Legitimate objectives include national security requirements, the prevention of deceptive practices, protection of human health or safety, animal or plant life or health, and the environment.
• International standards (Article 2.4): where relevant international standards exist, members shall use them as a basis, unless they would be ineffective or inappropriate. Article 2.5 presumes that a regulation in accordance with an international standard does not create an unnecessary obstacle.
• Equivalence (Article 2.7) and performance-based requirements (Article 2.8).
• Transparency: notification of draft regulations and a reasonable interval before entry into force (Articles 2.9 to 2.12); national enquiry points (Article 10).
• Special and differential treatment and technical assistance for developing countries (Articles 11 and 12).

Leading reports: EC – Sardines (Appellate Body, 2002), where an EC regulation allowing only Sardina pilchardus to be sold as “sardines” was inconsistent with Article 2.4 because it did not use the Codex standard as its basis; US – Clove Cigarettes (2012), where a ban on clove cigarettes (mostly Indonesian) while menthol cigarettes (mostly domestic) remained on sale violated Article 2.1; and US – Tuna II (Mexico) (2012), on “dolphin-safe” labelling, which held that a labelling scheme can be a technical regulation and that Article 2.1 is not violated where a detrimental impact stems exclusively from a legitimate regulatory distinction.

4. The SPS Agreement

The preamble affirms that no member should be prevented from adopting measures necessary to protect life or health, provided they are not a means of arbitrary or unjustifiable discrimination or a disguised restriction. The operative rules:

• Basic rights and obligations (Article 2): members may take SPS measures necessary for protection (2.1), but only to the extent necessary, based on scientific principles and not maintained without sufficient scientific evidence (2.2), and without arbitrary or unjustifiable discrimination (2.3). Conforming measures are presumed consistent with GATT, in particular Article XX(b) (2.4).
• Harmonisation (Article 3): members shall base measures on international standards of the Codex Alimentarius Commission (food safety), the World Organisation for Animal Health (animal health) and the International Plant Protection Convention (plant health). They may adopt a higher level of protection if there is scientific justification (3.3).
• Equivalence (Article 4): a member shall accept another's measures as equivalent if the exporter objectively demonstrates they achieve the importer's appropriate level of protection.
• Risk assessment and appropriate level of protection (Article 5): measures must be based on a risk assessment (5.1), taking account of available scientific evidence, processes, ecological conditions and economic factors (5.2, 5.3). Members should minimise trade effects (5.4), avoid arbitrary distinctions in levels of protection in different situations (5.5), and choose measures not more trade-restrictive than required (5.6).
• Provisional measures (Article 5.7): where scientific evidence is insufficient, a member may provisionally adopt measures on available pertinent information, but must seek additional information and review the measure within a reasonable period. This is the Agreement's version of the precautionary principle.
• Regionalisation (Article 6): recognition of pest-free or disease-free areas.
• Transparency (Article 7 and Annex B), control, inspection and approval procedures (Article 8 and Annex C), technical assistance and special and differential treatment (Articles 9 and 10).

Leading reports: EC – Hormones (Appellate Body, 1998), where the EC ban on beef from cattle treated with growth hormones failed because it was not based on a risk assessment; the precautionary principle, the Appellate Body said, does not override Articles 5.1 and 5.2. Australia – Salmon (1998) on risk assessment and arbitrary distinctions; Japan – Apples (2003), where Japan's fire-blight measures were maintained without sufficient scientific evidence and Article 5.7 was unavailable because evidence was not insufficient. India – Agricultural Products (Appellate Body, 2015), brought by the United States, held India's import ban on poultry products on account of avian influenza inconsistent with the SPS Agreement: it was not based on the OIE standard or a risk assessment and did not recognise disease-free areas.

5. The need for SPS measures in international trade

• Food, animals and plants move across borders in huge volumes and can carry disease, pests and contamination: avian influenza, foot-and-mouth disease, fruit flies.
• Consumers are entitled to safe food; States have a sovereign duty to protect health.
• Without discipline, health rules become a cheap form of protection. The SPS Agreement keeps the right to regulate but requires science and transparency, so that exporters, especially developing-country exporters of fish, spices and fruit, can predict and meet requirements.
• Harmonisation on Codex and OIE standards reduces duplicated testing and costs.

6. India

India's SPS regime includes the Food Safety and Standards Act, 2006 (FSSAI standards for imported food), the Plant Quarantine (Regulation of Import into India) Order, 2003, and the Livestock Importation Act, 1898. Its TBT regime is chiefly the Bureau of Indian Standards Act, 2016, under which Quality Control Orders make BIS certification compulsory for listed products. Indian exporters of mangoes, rice, shrimp and spices have faced SPS rejections abroad, often on pesticide residues.

How this is examined

For an SPS essay: definition (Annex A), the need for measures (section 5), the obligations in Articles 2 to 7, and Hormones and India – Agricultural Products. For a TBT short note: the three instruments, the Article 2 obligations with the list of legitimate objectives, and one report (Sardines is the clearest). Always state the dividing line between the two agreements in a sentence.