Sanitary and phytosanitary measures can render the market access gains derived from tariff concessions meaningless.
Under the SPS Agreement WTO Members can impose measures to protect the life or health of humans, animals and plants within their territories.
Through these measures an importing country can effectively block imports of an agricultural product notwithstanding the fact that all import duties have been eliminated.
SPS measures can be misused to constitute a disguised restriction on trade.
For this reason the SPS Agreement regulates the design and imposition of these measures. It also regulates the procedures for establishing compliance with such measures by the relevant authorities of the importing country.
Whereas the reduction and phasing down of import duties are often carefully calibrated according to formulas, modalities and schedules, the process and the pace by which an importing country must establish compliance with a SPS measure is almost left entirely in the hands of the importing country.
The best that the Agreement can do is to require that the processes for checking and ensuring compliance with a measure be done without undue delay. The Agreement does not, and cannot stipulate what constitutes “undue delay” as the duration of the delay may be a function of several variables, including the nature of the measure at issue and the technical and institutional capacity of the importing country to deal with the issue.
Without informing the meaning of “undue delay” in some way, exporting countries are left at the mercy of the importing country’s willingness and capacity to address the matter.
That is why the recent request for consultations filed by Argentina against the United States under the WTO dispute settlement rules regarding certain measures affecting the importation of lemons is so important.
As part of the request for consultations Argentina claims that they have been waiting on the United States for approval to import lemons for a period of seven years since the approval procedures were initiated. According to Argentina this amounts to an undue delay, which is inconsistent with the rules of the SPS Agreement.
If Argentina and the United States cannot settle the matter through consultations, then Argentina will most likely bring the matter before a WTO dispute settlement panel for resolution.
Clearly, exporters of agricultural products, including many African countries, have a systemic interest in the manner in which a panel will interpret and give meaning to the phrase “undue delay”. Such an interpretation may point to discrepancies not only in their own SPS approval procedures, but also in those of their trading partners under the WTO system. Hopefully the result will be an overall move to instill disciplines on domestic procedures generally.
It may be prudent therefore for these countries to join the panel proceedings, once Argentina has requested the establishment of a panel, as Third Parties.
For more information regarding this dispute or the WTO dispute settlement mechanism in general, please contact us.