Sanitary and Phytosanitary (SPS) and Related Non-Tariff Barriers to Agricultural Trade
Released: 2014-03-31T00:00:00

Sanitary and phytosanitary (SPS) measures are laws, regulations, standards, and procedures that governments employ as "necessary to protect human, animal or plant life or health" from the risks associated with the spread of pests, diseases, or disease-carrying and causing organisms, or from additives, toxins, or contaminants in food, beverages, or feedstuffs. SPS measures are designed to protect animals and plants from diseases and pests, and to protect humans from animal- and plant-borne diseases and pests, and foodborne risks. Examples include specific product or processing standards, requirements for products to be produced in disease-free areas, quarantine and inspection procedures, sampling and testing requirements, residue limits for pesticides and drugs in foods, and prohibitions on certain food additives.

Technical barriers to trade (TBTs) cover both food and non-food traded products. TBTs in agriculture include SPS measures, but also include other types of measures related to health and quality standards, testing, registration, and certification requirements, as well as packaging and labeling regulations. TBT measures address technical characteristics of products, such as process and product standards, technical regulations, product environmental regulations, and voluntary procedures relating to health, sanitary, and animal welfare, but also inspection procedures, product specifications, and approval and marketing of biotechnology.

This report broadly refers to SPS and other types of technical requirements, including TBTs in food production, as "SPS/TBT measures." SPS/TBT measures span several broad categories (see text box below), and may vary widely depending on the commodity and importing country. Overall, SPS/TBT measures comprise a group of widely divergent standards and standards-based measures that countries use to regulate markets, protect their consumers, and preserve natural resources, but that can also be used to discriminate against imports in favor of domestic products. Specific examples in agriculture include meat and poultry processing standards to reduce pathogens, residue limits for pesticides in foods, fumigation requirements for grains and wood packaging materials to kill pests, labeling and marketing standards, food safety protocols, and regulation of agricultural biotechnology. This has resulted in a variety of formal trade disputes as well as ongoing trade concerns between the United States and its trading partners.

The United States has initiated several formal trade disputes regarding SPS/TBT measures that have been elevated for review and dispute resolution within the World Trade Organization (WTO). Some high-profile trade disputes include U.S. concerns about the European Union's (EU's) ban on U.S. meats from livestock treated with growth-promoting hormones, the EU's restrictions on chemicals used to treat U.S. poultry, and the EU's moratorium on approvals of biotechnology products. Other disputes have involved U.S. complaints about testing and inspection requirements, among other SPS/TBT measures, applied in other countries. Foreign countries also have objected to various U.S. trade measures. This report describes formal challenges involving SPS/TBT that the United States has brought against some U.S. trading partners, which have resulted in trade disputes that have been, or continue to be, reviewed by the WTO.

Not all U.S. trade concerns regarding SPS/TBT measures rise to the level of a formal WTO trade dispute. A full summary of ongoing SPS/TBT trade concerns based on the most recent annual compilation by the Office of the U.S. Trade Representative (USTR) is provided in Appendix A at the end of this report.

SPS/TBT Measures and International Trade Rules

Multilateral Trade Agreements

SPS/TBT measures regarding food safety and related public health protection are addressed in various multilateral trade agreements and are regularly notified to and debated within the WTO. International trade rules recognize the rights and obligations of governments to adopt and enforce such requirements. (Present multilateral rules date back to the development and signing of the General Agreement on Tariffs and Trade (GATT) in 1947, which were followed by a number of subsequent negotiating rounds leading up to the establishment of the WTO on January 1, 1995.) These rules are spelled out primarily in two WTO agreements dealing with food safety and animal (sanitary) and plant (phytosanitary) health and safety and with other types of technical product standards in general:

The Agreement on Sanitary and Phytosanitary Measures (or "SPS Agreement"), which resulted from the Uruguay Round of the General Agreement on Tariffs and Trade (GATT). The Agreement on Technical Barriers to Trade ("TBT Agreement"), which also resulted from the Uruguay Round of GATT negotiations as a revision of the agreement of the same name that emerged from negotiations during the Tokyo Round that concluded in 1979.

Both agreements were entered into force on January 1, 1995, as part of the establishment of the WTO, following the Uruguay Round of multilateral negotiations. These agreements establish rules regarding the use of certain human, animal, and plant health protection measures, as well as the technical requirements, standards and procedures intended to ensure such protections are met, for a range of traded goods. These agreements apply only to governmental measures that may directly or indirectly affect international trade.

Although both the SPS and TBT Agreements explicitly recognize the rights of each country to set their own standards, these standards must be science-based and applied only to the extent necessary to protect human, animal or plant health. These standards cannot be arbitrary or used to unjustifiably discriminate domestically or between trading partners. Member countries also are encouraged to observe established and recognized international standards. Improper use of SPS and TBT measures can create substantial, if not complete, barriers to trade when they are disguised protectionist barriers, are not supported by science, or are otherwise unwarranted.

SPS/TBT measures are considered types of non-tariff measures or barriers, and refer to trade policies such as quotas, import licensing systems, sanitary regulations, and other types of prohibitions—other than import tariffs—that may restrict trade. In general, as import tariffs have been reduced to relatively low levels in most countries following multilateral trade negotiations as well as bilateral and regional free trade agreements, non-tariff measures have emerged, in some cases, as significant barriers to international trade.

Other types of recognized non-tariff measures outside of SPS/TBT measures (and therefore not covered in this report) include quantitative restrictions; non-tariff charges and related policies affecting imports; government participation in trade, restrictive practices, and more general government policies; and customs procedures and administrative practices. These types of potential trade barriers are addressed in other WTO agreements and/or processes.

The rules and procedures governing settlement of trade disputes involving SPS/TBT measures within the WTO are spelled out in the WTO's Understanding on Rules and Procedures Governing the Settlement of Disputes. (For more information see " Formal SPS/TBT Trade Disputes Involving the United States .")

WTO Agreement on Sanitary and Phytosanitary (SPS) Measures

The SPS Agreement addresses the rights and obligations of WTO member nations regarding health protection measures related to humans, animals, and plants. SPS measures are defined as any measure that a WTO Member applies to:

protect animal or plant life or health from risks arising from the entry, establishment or spread of pests, diseases, disease-carrying organisms, or disease-causing organisms; protect human or animal life or health from risks arising from additives, contaminants, toxins, or disease-causing organisms in foods, beverages, or feedstuffs; protect human life or health from risks arising from plant- or animal-carried diseases (zoonoses), and from animal or plant life pests, diseases, or disease-causing organisms, or from the entry, establishment, or spread of pests; or prevent or limit other damage caused by the entry, establishment, or spread of pests.

In general, s anitary regulations apply to animal based products such as meats, poultry, and dairy products to ensure that they meet or exceed specified sanitary standards. Phytosanitary regulations apply to fruits, vegetables, bulk commodities, and other plant based products.

The SPS Agreement establishes general requirements and procedures to ensure that governments adopt and apply SPS measures that protect against risks to human, animal, or plant life or health—including food safety regulations and measures to protect domestic crops, livestock, and poultry. The SPS Agreement also explicitly recognizes the rights of governments to adopt regulations and establish the levels of protection from risk they deem appropriate, provided such measures do not unnecessarily restrict trade. Accordingly, the SPS Agreement reaffirms that no WTO member country should be:

prevented from adopting or enforcing measures necessary to protect human, animal or plant life or health, subject to the requirement that these measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between Members where the same conditions prevail or a disguised restriction on international trade... to improve the human health, animal health and phytosanitary situation in all Members... and noting that sanitary and phytosanitary measures are often applied on the basis of bilateral agreements or protocols.

The SPS Agreement encourages harmonization of SPS measures among WTO member nations, where appropriate.

Under the SPS Agreement member nations are obligated to notify and allow for comments on proposed standards affecting trade, among other obligations relevant to regulations affecting imported foods. The SPS Agreement applies only to SPS measures that may directly or indirectly affect international trade, and does not apply to measures that have no trade effect or are imposed by a private company or trade association.

The Office of the U.S. Trade Representative (USTR) identifies most SPS measures to include:

all relevant laws, decrees, regulations, requirements, and procedures including, among others: end product criteria; processes and production methods; testing, inspection, certification, and approval procedures; quarantine treatments, including relevant requirements associated with the transport of animals or plants, or with the materials necessary for their survival during transport; provisions on relevant statistical methods, sampling procedures, and methods of risk assessment; and packaging and labeling requirements directly related to food safety.

Key principles and provisions of the SPS Agreement are described in Appendix B .

The SPS Agreement established a Committee on Sanitary and Phytosanitary Measures ("SPS committee" ) that provides for a periodic review of the agreement's operation and implementation. The first review was conducted in 1999, with subsequent reviews in 2005 and 2010. During these reviews, the committee discussed at length the range of SPS issues and proposals, from equivalence, transparency, and harmonization in standards among countries to technical assistance and special and differential treatment for development countries and dispute resolution. The reports include recommendations on each of these topics. Also discussed at the second review were specific trade-related SPS concerns raised by WTO members, cooperation within the three standard-setting bodies (Codex, OIE, and IPPC, see section "

International Standard Setting Organizations "), and clarification of terms and SPS provisions, among other topics. Within other articles of the agreement are provisions that permit developing countries to delay compliance with SPS measures affecting imports.

At the time of the second review, the committee reported that some WTO members were "still in the process of adjusting to and implementing the new disciplines." The committee review stated that the SPS Agreement "is serving its purpose to the benefit of both importing and exporting [member countries]" and that no member country "has proposed changes to the basic provisions of the SPS Agreement, or questioned its science-based requirements, the encouragement of harmonization with international standards, or the obligations for transparency." Other information related to the committee's periodic reviews is in section " SPS/TBT Trade Concerns Raised at the WTO ."

WTO Agreement on Technical Barriers to Trade

The TBT Agreement addresses the rights and obligations of WTO member nations regarding "standards-related measures" intended to protect against human, animal, or plant life and the environment, and to ensure the quality of traded goods and prevent deceptive practices. At the same time, the TBT Agreement recognizes that:

no country should be prevented from taking measures necessary to ensure the quality of its exports, or for the protection of human, animal or plant life or health, of the environment, or for the prevention of deceptive practices, at the levels it considers appropriate, subject to the requirement that they are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail or a disguised restriction on international trade.

Under the agreement, "standards-related measures" include standards, technical regulations, and conformity assessment procedures, and apply with respect to products and related processes and production methods. Technical regulations and standards establish a product's specific characteristics—such as its size, shape, design, functions, and performance, or the way it is labelled or packaged before it is available for sale. Standards are approved by a recognized organization and generally are voluntary, whereas technical regulations are mandatory. Conformity assessment procedures refer to certain technical procedures—such as testing, verification, inspection, and certification—which confirm that a product meets the requirements of the regulations and standards.

The TBT Agreement covers "all technical requirements, voluntary standards and the procedures to ensure that these are met ... , except when these are SPS measures as defined by the SPS Agreement." TBTs also include related health and quality standards, testing, registration, and certification requirements; safety and industrial standards and regulations; conformity assessments; and packaging and labeling regulations, including trademarks; quarantines; and advertising and media regulations.

The TBT Agreement establishes rules on "developing, adopting, and applying voluntary product standards and mandatory technical regulations as well as conformity assessment procedures (such as testing or certification) used to determine whether a particular product meets such standards or regulations," thus helping to distinguish "legitimate standards-related measures from protectionist measures, and ensure that testing and other conformity assessment procedures are fair and reasonable."

Under the TBT Agreement member nations are obligated to notify and allow for comments on proposed standards affecting trade, among other obligations relevant to regulations affecting imported foods (such as developing standards-related measures through transparent processes, and to base these measures on relevant international standards where effective and appropriate). The agreement contains a so-called "Code of Good Practice for the Preparation, Adoption, and Application of Standards," which applies to voluntary standards.

TBTs are widely divergent measures that countries use to regulate markets, protect their consumers, and preserve natural resources, but which can also discriminate against imports in favor of domestic products.

The TBT Agreement also established a committee for members to consult on matters regarding the agreement, which has also conducted a series of reviews of the TBT Agreement. Key principles and provisions of the TBT Agreement are described in Appendix C .

U.S. Free Trade Agreements

Bilateral and regional free trade agreements (FTAs) between the United States and other countries also address SPS and TBT matters. In general, such provisions in previously enacted FTAs have not been as extensive as those in the WTO SPS and TBT Agreements. Table 1 lists some of the SPS-specific provisions in U.S. free trade agreements. These FTAs also include provisions that address TBTs as well. More recently, the United States has entered into free trade negotiations that could go beyond provisions in existing FTAs with regard to SPS and TBT matters.

North American Free Trade Agreement (NAFTA)

The North American Free Trade Agreement (NAFTA) between the United States, Canada, and Mexico (NAFTA) entered into force on January 1, 1994, and contains both SPS and TBT provisions that are nearly as extensive as those in the SPS and TBT agreements.

NAFTA text relating to SPS matters is contained within Chapter Seven (Agriculture and Sanitary and Phytosanitary Measures). NAFTA's SPS agreement imposes disciplines on the development, adoption, and enforcement of SPS measures to protect human, animal, or plant life or health from risks arising from animal or plant pests or diseases, food additives, or contaminants. NAFTA affirms the right of each country to establish the level of SPS protections that it considers appropriate and provides that a NAFTA country may achieve that level of protection through SPS measures that are based on scientific principles and a risk assessment; are applied only to the extent necessary to provide a country's chosen level of protections; and do not result in unfair discrimination or disguised restrictions on trade (Article 712). NAFTA also established a Committee on Sanitary and Phytosanitary Measures to facilitate the enhancement of food safety and SPS conditions as well as activities relating to international standards and equivalence, and to provide for technical cooperation and consultation on specific bilateral issues (Article 722).

NAFTA text relating to TBT matters is contained within Chapter Nine (Standards-Related Measures). The agreement's TBT provisions apply to standards-related measures under the TBT Agreement and all other international agreements, including environmental and conservation agreements, other than those covered by SPS provisions. NAFTA affirms the right of each country to "adopt, maintain or apply any standards-related measure, including any such measure relating to safety, the protection of human, animal or plant life or health, the environment or consumers, and any measure to ensure its enforcement or implementation," as long as such measures are non-discriminatory and do not result in unnecessary obstacles to trade (Article 904). NAFTA also established a Committee on Standards-Related Measures (Article 913).

Other Existing FTAs

Since NAFTA entered into force in 1994, the United States has successfully negotiated several FTAs (with Jordon, Singapore, Chile, Australia, Morocco, El Salvador, Honduras, Nicaragua, Guatemala, Dominican Republic, Costa Rica, Bahrain, Oman, Peru, Colombia, Panama, and South Korea; see Table 1 ). Each of these FTAs address SPS and TBT matters in some way. However, compared to NAFTA, subsequent FTAs do not address SPS and TBT matters as extensively and also do not address any specific SPS or TBT disputes or issues. Instead, subsequent FTAs generally reference each party's rights and obligations under the WTO SPS Agreement and TBT Agreement, and some FTAs establish standing committees to consult on and resolve problems on an ongoing basis. These FTAs also do not establish any dispute settlement procedures to address disputes related to SPS and TBT measures. In some cases, U.S. negotiators have taken advantage of the negotiating sessions leading up to an agreement, or the subsequent ratification and implementation period, to raise and attempt to resolve certain outstanding issues.

For example, in the U.S.-Australia FTA, in addition to language reaffirming the parties' commitments to their SPS and TBT obligations, the FTA contains a separate chapter on SPS Measures (Chapter 7 of the FTA) establishing an SPS Committee and also a standing technical working group on animal and plant health (Article 7.4; Annex 7-A). The working group is intended to provide a forum to resolve specific bilateral animal and plant health matters to facilitate trade, and engage in risk assessment and regulatory processes, among other matters. During the U.S.-Australia FTA negotiations, U.S. officials also secured a commitment from Australia that it would work to ease inspection procedures that have impeded U.S. imports of pork, citrus, apples, and stone fruit. The FTA also includes side letters where the United States and Australia agree to cooperate on securing science-based international standards on bovine spongiform encephalopathy (BSE, or "mad cow" disease). Similar side letters have accompanied recent FTAs with Latin American countries.

Ongoing FTA Negotiations

In an effort to resolve perceived obstacles in trade regarding SPS and TBT matters, many in U.S. agriculture and the food industry are supporting efforts by U.S. negotiators to build on and "go beyond" the rules, rights, and obligations in the WTO SPS Agreement and TBT Agreement, as well as beyond commitments in existing U.S. FTAs. These efforts are referred to as "WTO-Plus" rules, or alternatively, as "SPS-Plus" and "TBT-Plus" rules. The U.S. meat and poultry industry initially proposed efforts to adopt tougher WTO rules for animal health regulations as part of the Trans-Pacific Partnership (TPP) negotiations. These concepts were later reinforced by recommendations from U.S. and EU trade officials involved in the Transatlantic Trade and Investment Partnership (TTIP) negotiations.

Trans-Pacific Partnership

The Trans-Pacific Partnership (TPP) is a proposed regional FTA being negotiated among the United States and several countries of the Asia-Pacific region—Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

A major item in the TPP negotiations on agricultural goods is how to address SPS matters. In a May 2012 white paper, the American Meat Institute and National Chicken Council called for including a "'WTO‐Plus' SPS chapter ... , an agreement that strengthens and reinforces the rules and disciplines" of the WTO SPS Agreement "and underscores the importance of science‐based regulation." To address concerns such as "unnecessarily trade‐restrictive measures that are not science‐based" and new measures that "do not conform to science‐based international standards" or are based on the use of "questionable testing methods to enforce standards," among other concerns, the May 2012 white paper makes several recommendations. It recommends that the TPP agreement strengthen requirements regarding risk assessment and risk management; reinforce the WTO rule that requires regulators to select the least‐trade‐restrictive of available risk management options; promote trade‐facilitating measures such as equivalence, recognition of inspection systems, and harmonization of export certificates; require parties to provide an adequate grace period before implementing new, nonemergency measures; enhance transparency; and strengthen the role of science‐based international standards and promote the harmonization of standards, among other recommendations. "Most importantly, these WTO‐plus provisions must be fully enforceable under the agreement." Several Members of Congress have called for the inclusion of "effective and enforceable rules" to strengthen the role of science in resolving trade differences.

Supported by other U.S. agriculture and food groups, U.S. negotiators proposed an SPS chapter that lays out more detailed commitments relating to human health and animal and plant safety issues in ways that go beyond rules in the WTO SPS Agreement. Reports indicate that USTR has tabled legal text (to be resolved by higher-level officials towards the conclusion of the negotiations) that would establish both a "consultative mechanism" to address SPS disputes that arise and a "rapid-response mechanism" designed to quickly resolve SPS barriers that block shipments of perishable products. Other U.S. proposals have included calls for increased transparency, establishing a timeline for carrying out science-based risk assessment, requiring risk assessments be based on relevant scientific data, and consistency with international guidelines, among other proposals. Many in the U.S. agriculture industry have criticized the Administration's efforts to address SPS matters in the TPP negotiations as insufficient.

Some TPP countries that are major agricultural exporters appear to favor a dispute settlement process for SPS obligations. Others have expressed criticism of certain U.S. policies, such as country of origin labeling requirements. Recent reports indicate that the United States may be backing off its earlier position of opposing dispute settlement for SPS rules.

Transatlantic Trade and Investment Partnership (TTIP)

Current negotiations between the United States and EU would establish a free trade area as part of the Transatlantic Trade and Investment Partnership (TTIP). However, given major regulatory differences and non-tariff barriers between the United States and the EU, particularly regarding SPS matters, some have expressed concern about whether the TTIP would be able to address such concerns, or whether the agreement might exclude agriculture products altogether. Some Members of Congress expect the TTIP negotiations to resolve long-standing trade disputes regarding SPS rules between the two trading blocs, as well as enhance disciplines to address SPS issues and other non-tariff barriers. Major concerns revolve around meat and poultry production and processing methods, specifically involving the U.S. use of beef hormones and ractopamine, pathogen reduction and other treatment technologies, BSE-related regulations, and other plant processing regulations. Other SPS concerns between the U.S. and EU involve the use of biotechnology (genetically modified organisms, or GMOs) and pesticide regulations.

At the same time, U.S.-EU negotiators are working to resolve existing SPS disputes, and both parties have made changes to some aspects of their regulatory regimes in an attempt to facilitate some SPS that are viewed as an obstacle to a U.S.-EU trade agreement. Still, some Members of Congress have expressed concern that U.S. companies will become subject to the EU's regulatory requirements on food and agricultural products, in addition to U.S. requirements. USTR has expressed concerns that the EU is openly promoting its own "production values" and is strategizing to "act as a global standard setter to enhance the competitiveness of European industry." Other groups, as well as some Members of Congress, have expressed concern that a U.S.-EU trade deal and harmonization of regulatory standards could result in overall lower health and environmental standards, particularly SPS/TBT measures, by making them enforceable through a dispute settlement process.

As part of the Administration's formal notification to Congress in March 2013 launching the U.S.-EU trade talks, USTR stated that among its specific objectives in negotiating the TTIP is "to eliminate or reduce non-tariff barriers that decrease market opportunities for U.S. exports, provide a competitive advantage to products of the EU, or otherwise distort trade," such as SPS measures "that are not based on science" as well as "unjustified" TBT measures and "other 'behind-the-border' barriers, including restrictive administration of tariff-rate quotas and permit and licensing barriers, that impose unnecessary costs and limit competitive opportunities for U.S. exports." USTR later stated that differences in the U.S. and EU regulatory and standards approaches have resulted in "unnecessary barriers, raising costs, deterring trade and investment, and negatively impacting our competitiveness and our consumers," and also called on EU regulators to adopt a U.S. rulemaking process based on transparency, participation, and accountability.

Similar to the TPP, many in the U.S. agriculture and food industry who are advocating for TTIP agriculture negotiations are hoping to go beyond current WTO rules on SPS and TBT matters as well as address certain perceived concerns regarding science-based decision-making in trade disputes. For example, a final report submitted by U.S. and EU trade officials as part of the so-called U.S.-EU High Level Working Group on Jobs and Growth (HLWG) to advise TTIP negotiations recommended that the United States and EU seek to negotiate both an "ambitious 'SPS-plus' chapter" and an "ambitious 'TBT-plus' chapter" under TTIP.

The HLWG recommendations call for:

1. an "ambitious 'SPS-plus' chapter, including establishing an on-going mechanism for improved dialogue and cooperation" to address bilateral SPS issues by building on key principles of WTO SPS Agreement, including "requirements that each side's SPS measures be based on science and on international standards or scientific risk assessments, applied only to the extent necessary to protect human, animal, or plant life or health, and developed in a transparent manner, without undue delay." 2. an "ambitious 'TBT-plus' chapter, building on horizontal disciplines in the WTO [TBT Agreement], including establishing an ongoing mechanism for improved dialogue and cooperation for addressing bilateral TBT issues," including the goals of "greater openness, transparency, and convergence in regulatory approaches and requirements and related standards-development processes ... , to reduce redundant and burdensome testing and certification requirements, promote confidence in our respective conformity assessment bodies, and enhance cooperation on conformity assessment and standardization issues globally."

The "SPS Plus" and "TBT Plus" concept generally means building on and going beyond the rights and obligations of all WTO members through the WTO's SPS and TBT Agreements. For example, this could mean that the EU and United States would provide for greater transparency and more timely SPS and TBT notifications than required by the WTO, along with—albeit more challenging—some form of "rapid response mechanism" for resolving stoppages of agricultural products at the border and enforcement mechanisms or dispute settlement process.

U.S. agriculture and food groups continue to express concern that ongoing trade negotiations might not adequately address SPS concerns and cover "all significant barriers in a single comprehensive agreement." The U.S. Chamber of Commerce has also expressed the need for "the inclusion of ambitious regulatory provisions" covering "a complete package of all three areas—TBT, SPS, and regulatory cooperation" as part of any agreement. Additionally, several Members of Congress have called for "effective rules and enforceable rules to strengthen the role of science in the marketplace" to resolve international trade differences in the TPP and TTIP.

Working within the framework of the SPS and TBT Agreements, and principles and disciplines of the WTO, among the stated U.S. objectives regarding non-tariff barriers and regulatory issues are:

greater compatibility of U.S. and EU regulations and related standards development processes, with the objective of reducing costs associated with unnecessary regulatory differences and facilitating trade, inter alia by promoting transparency in the development and implementation of regulations and good regulatory practices, establishing mechanisms for future progress, and pursuing regulatory cooperation initiatives where appropriate

These objectives are alternatively expressed as the need for harmonized standards or convergence in regulatory approaches; regulatory coherence; improved openness; and fewer redundant and/or burdensome testing and certification requirements. Similarly, among the EU's stated objectives of the SPS chapter are to establish regulatory and technical cooperation; improve transparency and discrimination to the adoption and application of SPS measures; and eliminate unnecessary barriers to trade while safeguarding human, animal, and plant health.

Some in the U.S. agriculture and food industry are urging the TTIP agriculture negotiations to address the use and application of the so-called "precautionary principle," which is central to the EU's risk management policy regarding food safety and animal and plant health, as well as the EU's practice of taking a generally more risk adverse approach to risk management. Some contend that the EU's use of the precautionary principle contributes to its practice of taking a generally "more risk-averse approach to risk management" and "allows EU regulators to put in place restrictions on products or processes when they believe that scientific evidence on their potential impact on human health or the environment is inconclusive." Many in the United States claim that "science-based decision making and not the precautionary principle must be the defining principle in setting up mechanisms and systems" to address SPS concerns. Other TTIP objectives for some U.S. agricultural and food groups include calls for changes to the EU's approach for approving and labeling biotechnology products.

Many in the EU continue to defend the application of the precautionary principle to a range of agricultural issues, and U.S. agriculture and food groups have expressed concern that "a resolution regarding the TTIP passed by the European Parliament on April 24 [2013] strongly expresses the intent of the EU to maintain the precautionary principle, which would undermine sound science and ultimately the agreement itself." Additional background on the use and application of the precautionary principle in international trade is provided in the section of this report titled " Application and Use of "Precautionary Principle" ."

In addition, some U.S. groups are calling for changes to EU food and beverage designations that derive from production in a specific geographical location, or so-called geographical indications or GIs. (For more information, see text box). These discussions are not part of the SPS chapter, but are being negotiated as part of the TTIP's intellectual property rights (IPR) chapter.

International Standard Setting Organizations

The SPS Agreement and the TBT Agreement both encourage the international harmonization of food standards. Specifically, the SPS Agreement recognizes three international standard setting organizations for "facilitating international trade and protecting public health." These include the Codex Alimentarius Commission (Codex); the World Organisation for Animal Health (OIE); and the International Plant Protection Convention (IPPC). These organizations are often referred to as the "Three Sister" organizations of the WTO. Each of these organizations is directly recognized in the SPS Agreement as the primary "relevant" (or reference) organizations for developing international standards, guidelines, and recommendations on animal health, food safety, and plant health. As stated in the SPS Agreement (Article 3):

To harmonize sanitary and phytosanitary measures on as wide a basis as possible, Members shall base their sanitary or phytosanitary measures on international standards, guidelines or recommendations, where they exist,.... Members shall play a full part, within the limits of their resources, in the relevant international organizations and their subsidiary bodies, in particular the Codex Alimentarius Commission, the International Office of Epizootics, and the international and regional organizations operating within the framework of the International Plant Protection Convention, to promote within these organizations the development and periodic review of standards, guidelines and recommendations with respect to all aspects of sanitary and phytosanitary measures.

As such, Codex, IPPC, and OIE directly and actively participate in and contribute to discussions of the SPS committee. The TBT Agreement further encourages members to participate in the work of international bodies for the preparation of standards and other procedural guidelines (Articles 2.6 and 5.5).

Prior to the creation of the WTO and negotiation of the SPS and TBT Agreements, the United Nations General Assembly stated as part of a 1985 resolution, Guidelines for Consumer Protection : "Governments should take into account the need of all consumers for food security and should support and, as far as possible, adopt standards from the Food and Agriculture Organization of the United Nations and the World Health Organization Codex Alimentarius or, in their absence, other generally accepted international food standards." Arguably, however, there is no single and categorical obligation for WTO member governments to adopt internationally recognized standards, guidelines, or recommendations.

The United States is a member of the WTO and also a member of Codex, OIE, and IPPC. U.S. government scientists participate actively in these organizations, which meet periodically to discuss current and anticipated threats to human and agricultural health, evaluate SPS-related disputes, and develop common, scientifically based SPS standards. Such standards are voluntary and are intended to provide guidance for countries in formulating their own national SPS measures and, ultimately, to help resolve trade disputes.

Codex Alimentarius Commission

Codex Alimentarius Commission (Codex) is the international food safety organization that develops internationally adopted food standards, guidelines, and codes of practice. Codex operates as part of a United Nations program jointly funded by the Food and Agriculture Organization (FAO) and the World Health Organization (WHO), known as the Joint FAO/WHO Food Standards Programme. Codex was created in 1963 to develop food standards, guidelines, and codes of practice intended to ensure food safety and hygiene, as well as facilitate international food trade. Codex provides a forum for countries to formulate and harmonize food standards on a global scale. Nearly all countries are members of Codex.

The SPS Agreement identified Codex as the relevant international standard setting organization for food safety. Regarding food safety, Codex sets Maximum Residue Levels (MRLs) for pesticide residues in plant-based foods and for animal drug residues in meat products, and has standards for a range of veterinary drugs.

Codex standards, guidelines, and recommendations are generally regarded as the benchmarks against which "national food measures and regulations are evaluated within the legal parameters" of the WTO agreements, thus giving Codex a key role in helping to resolve some types of trade disputes. Codex standards, guidelines, and recommendations are advisory, not mandatory. However, measures that conform to Codex are generally recognized, under the SPS Agreement, as necessary to protect public health based on available scientific evidence and risk analysis.

Through international negotiations, Codex has formulated standards for specific food commodities, and has also addressed broader areas of concern including pesticide and drug residues, food contaminants and additives, labeling, and food safety. Overall, Codex has developed more than 200 standards covering processed, semi-processed, or unprocessed foods; developed more than 40 hygienic and technological codes of practice; evaluated more than 1,000 food additives and more than 50 veterinary drugs; set more than 3,000 maximum levels for pesticide residues; and specified over 30 guidelines for contaminants. All Codex standards, guidelines, codes of practice, and advisory texts are publicly available at its website.

World Organization for Animal Health

The World Organization for Animal Health (OIE) is responsible for improving animal health worldwide. OIE is not part of the United Nations, but is a separate intergovernmental organization that was founded in 1924 under an international agreement. The SPS Agreement named OIE as the relevant international standard setting organization for animal health, and states that "to harmonize sanitary and phytosanitary measures on as wide a basis as possible, Members shall base their sanitary or phytosanitary measures on international standards, guidelines or recommendations."

OIE's objectives include developing international standards "to promulgate health standards for the safety of international trade in animals and animal products and animal disease surveillance (within its WTO mandate)" as well as "contribute to food safety and food security and to promote animal welfare, through a science-based approach." Historically its mandate has been to "prevent animal diseases from spreading around the world." Among its major functions, OIE collects and disseminates information on the distribution and control of animal diseases, coordinates research on contagious animal diseases, and develops international standards for the safe movement of animals and animal products in international trade.

OIE's codes and manuals are intended as reference documents to help countries establish health regulations for the import and export of live animals and animal products, and avoid the spread of diseases to other animals and humans. OIE also helps develop general principles relating to risk analysis methodology, including import risk assessments, veterinary services assessments, zoning and regionalization guidelines, and surveillance and monitoring tools, such as animal identification and traceability.

International Plant Protection Convention

The International Plant Protection Convention (IPPC) is an international treaty for international cooperation in plant protection, intended to "protect cultivated and wild plants by preventing the introduction and spread of pests." IPPC was established in 1952 and is administered by FAO. The SPS Agreement named IPPC as the relevant international standard setting organization for plant health. IPPC allows for the application of measures by governments intended to protect their plant resources from harmful pests (referred to as "phytosanitary" measures) that may be introduced through international trade. IPPC's major functions apply mostly to quarantine pests in international trade, and its standards and policies are aimed to prevent the spread and introduction of pests to plants and plant products. Other IPPC work includes establishing standards on pest risk analysis and developing requirements for the establishment of pest-free areas.

Application and Use of "Precautionary Principle"

The "precautionary principle" (or precautionary approach) allows a country to take "protective action"—including restricting trade of products or processes—if they believe that scientific evidence is inconclusive regarding their potential impacts on human health and the environment.

No universally agreed upon definition of the precautionary principle exists, and many differently worded or conflicting definitions can be found in international law. WTO rules state:

Member countries are encouraged to use international standards, guidelines and recommendations where they exist. When they do, they are unlikely to be challenged legally in a WTO dispute. However, members may use measures which result in higher standards if there is scientific justification. They can also set higher standards based on appropriate assessment of risks so long as the approach is consistent, not arbitrary. And they can to some extent apply the "precautionary principle", a kind of "safety first" approach to deal with scientific uncertainty.

More specifically, the precautionary principle suggests that if scientific evidence is insufficient or inconclusive regarding potential dangers to human, environmental, animal, or plant health of a product or practice, that product or practice should be prohibited if reasonable grounds for concern exist.

The WTO acknowledges that "the need to take precautionary actions in the face of scientific uncertainty has long been widely accepted," particularly in the fields of food safety, and plant and animal health protection. Examples might include a sudden outbreak of an animal disease that is suspected of being linked to imports, which may require a country to impose certain trade restrictions while further information about the source and extent of the outbreak is assessed. The WTO also acknowledges that the SPS Agreement allows countries to use different standards and methods of inspecting products. (For other information see text box below.)

The precautionary principle remains central to the EU's risk management policy regarding food safety and animal and plant health, among other concerns. It was reportedly referenced as part of the 1992 treaty establishing the EU, and its use was further outlined in a 2000 communication and then formally established in EU food legislation in 2002 (Regulation EC No 178/2002). The EU's regulatory definition (Article 7) states:

In specific circumstances where, following an assessment of available information, the possibility of harmful effects on health is identified but scientific uncertainty persists, provisional risk management measures necessary to ensure the high level of health protection chosen in the Community may be adopted, pending further scientific information for a more comprehensive risk assessment.

The EU's 2000 communication outlines guidelines for applying the precautionary principle, including implementation, the basis for triggering a decision to invoke the precautionary principle, and the general principles of application.

In international trade, under EU law, application of the precautionary principle provides for "rapid response" to address "possible danger to human, animal, or plant health, or to protect the environment" and can be used to "stop distribution or order withdrawal from the market of products likely to be hazardous." Although its application may not be used as a pretext for protectionist measures, many countries have challenged as "protectionist" some EU actions that have invoked the precautionary principle.

Several U.S. agricultural and manufacturing groups oppose the EU's application of the principle and argue it allows EU regulations to disregard scientific evidence demonstrating that certain food products and processes are safe, based on evidence from available scientific risk assessments, allowing the EU and other importing countries to engage in disguised protectionism. On the other hand, some advocates believe that the SPS agreement too severely limits use of the principle.

Application of the precautionary principle by some countries remains an ongoing source of contention in international trade, particularly by the United States, and is often cited as a reason why some countries may restrict imports of some food products and processes. A 2013 paper authored by researchers at several U.S. land grant universities and USDA cites the following criticisms of the precautionary principle: (1) the ambiguity and lack of definition of the precautionary principle; (2) the arbitrariness in its use and unprincipled ways in which the precautionary principle has been applied; and (3) application of the precautionary principle is biased against new technologies, such as biotechnology and nanotechnology. The authors conclude that the precautionary principle has become "unworkable and counterproductive." Many U.S. agricultural and food organizations contend the precautionary principle undermines "sound science" and results in "unjustifiable restrictions" on U.S. exports. The stated policy of the U.S. Chamber of Commerce also is to support a "science-based approach to risk management, where risk is assessed based on scientifically sound and technically rigorous standards," and "oppose the domestic and international adoption of the precautionary principle as a basis for regulatory decision making." Its strategy aims to "educate consumers, businesses, and federal policymakers about the implications of the precautionary principle."

A 2005 study by the United Nations University recognizes that despite "fundamental differences in perception as to the appropriate role of science and technology in society, ... there must be a mutually acceptable, rational basis for concern that is based on available information when invoking precaution." The report further states: "While science has an important role to play in assessing risk and in informing decision makers on possible approaches to health and environmental concerns, the management of the risks involved invariably falls into the realm of political choice, where determining an acceptable level of risk must take into account a multitude of different considerations."

The study encourages the need for increased bilateral, regional, and multilateral discussion, and notes that unilateral measures adopted by countries without the support of "international standards, multilateral agreements or rigorous risk assessment" are both "economically damaging" and "create skepticism" for other actions where precaution may be truly warranted.

SPS/TBT Trade Concerns Raised at the WTO

SPS Measures

The WTO reports that member countries submitted 344 complaints about trade concerns associated with SPS requirements between 1995 and 2012 ( Figure 1 ). The United States, among other developed countries, raised many of the concerns reviewed by the SPS committee.

About 40% of SPS-specific trade concerns involved animal health and zoonotic diseases ( Figure 2 ). Another 30% of trade concerns involved food safety, followed by 24% on plant health and 6% concerning other issues such as certification requirements or translation. Within the animal health and zoonoses category, complaints involved foot-and-mouth disease (24%), transmissible spongiform encephalopathy (33%), and avian influenza (9%), among other animal health concerns (34%). About one-third (101) of all SPS-specific trade concerns were reported by the committee to have been resolved, while the remaining issues often required ongoing attention.

In the United States, federal agencies continue to review an increasing number of foreign SPS measures notified to the WTO. USDA reports that the number of SPS measures reviewed by U.S. government agencies rose from under 200 notified measures in 1995 to a total of 7,240 notified measures as of 2009, followed by an additional 950 notifications for 2010. More recent data are not available. (Similar information is not available for TBT measures, but would likely also cover other non-food traded goods.) Of these, USDA reports that combined SPS measures by Brazil, China, and other Asian nations account for a large share of total number of SPS notifications ( Figure 3 ).

TBT Measures

Trade concerns involving TBT requirements also have been increasing. The WTO reports that member countries submitted 278 new complaints from 1995 to 2012, in addition to the roughly 30-60 complaints per year that had been previously raised to the TBT committee ( Figure 4 ). The United States, among other developed countries, raised many of the concerns reviewed by the TBT committee. As the TBT Agreement addresses both food and nonfood traded goods, not all of these trade concerns have involved food products, and data are not available to distinguish foods only. However, of these, "protection of human health and food safety" was the most often single stated objective for the use of TBT measures, accounting for about 30% of all TBT-specific concerns ( Figure 5 ).

U.S. Concerns Involving SPS/TBT Measures

The United States has several formal trade disputes regarding SPS/TBT measures with the EU. These include concerns regarding the EU's ban on U.S. meats treated with growth-promoting hormones, the EU's restrictions on chemical treatments ("pathogen reduction treatments" or "PRTs") on U.S. poultry, and the EU's moratorium on approvals of biotechnology products. Other formal complaints have involved U.S. concerns about Korean testing and inspection requirements on U.S. agricultural products, Japan's varietal testing requirement of certain fruits and nuts to control for certain pests, and India's restrictions on poultry products related to concerns about avian influenza. (The United States has also expressed concerns about the expanded use of other types of potential trade barriers, including GIs and intellectual property protections involving agricultural products, as well as wine and spirits.)

Other types of trade concerns with other countries have not risen to the level of a formal WTO dispute. These disputes have involved U.S. concerns over foreign rules and requirements regarding the use and approval of agricultural biotechnology in other WTO member countries, Russia's restrictions on antimicrobial residues and the use of chlorine rinses on U.S. meat and poultry exports, and also ongoing prohibitions against some U.S. livestock products due to concerns about bovine spongiform encephalopathy (BSE, or "mad cow" disease), which was detected in the United States in 2003.

Foreign countries also have objected to various U.S. trade measures as well, including our country of origin labeling (COOL) and "dolphin‑safe" labeling standards, as well as U.S. restrictions on poultry product imports from China, among others. Concerns about U.S. standards and procedures involve issues regarding the U.S. plant and animal health approval process, and differences between the United States and EU regarding their respective final approval procedures for products derived using biotechnology as well as labeling requirements for such products, among other types of concerns.

SPS/TBT Trade Concerns Reported by USTR

Annual reports by USTR detail numerous ongoing trade concerns involving U.S. agricultural products and processes under both the SPS and TBT Agreements. Many of these trade concerns have not been formally brought to the WTO, but are addressed on an ongoing basis by U.S. government agencies in an attempt to resolve these issues, perhaps before they become part of a formal complaint or WTO trade dispute.

In 2013, USTR reported about 150 ongoing trade concerns in more than 50 countries or trade regions involving agricultural products under both the SPS and TBT Agreements. A full summary of these ongoing SPS/TBT trade concerns based on the most recent annual report is provided in Appendix A at the end of this report. (The information in the tables generally excludes most non-agricultural products, but may include some non-food items such as textiles and fibers, cosmetics and body care products, tobacco products, and reformulated fuels. Cases involving wine are included, but most other alcoholic beverages, such as distilled spirits, are excluded.)

The United States continues to actively pursue the removal of SPS-specific trade barriers on an ongoing and increasing basis. For example, USDA's most recent publicly available report indicates that the U.S. government made the following requests in 2009:

removal of certain tolerances on food additives, pesticides, and contaminants, tolerances deemed by USDA to be "unscientifically-based" (468 instances); submission of risk assessments for actions taken by some U.S. trading partners on certain agricultural products (134 instances); adoption of international standards by some U.S. trading partners for certain agricultural products (117 instances); adoption of U.S. standards by some U.S. trading partners for certain agricultural products (78 instances); and changes to quarantine and inspection requirements by some U.S. trading partners for certain agricultural products (18 instances).

Nearly one-half of the comments pertained to measures regarding processed products; one-third addressed requirements for live animals and fish (and their products, including dairy products); and almost one-quarter were for measures that introduced new standards or entry requirements for plants, bulk commodities (including those made with biotechnology), and horticultural products. The leading countries of U.S. comments were China (82 U.S. comments), South Korea (19 comments), Brazil (18 comments), and Taiwan (15 comments). Moreover, the total number of U.S. comments on foreign SPS measures has been increasing, rising from fewer than 30 comments in 1995 to more than 230 comments in 2009 ( Figure 6 ).

Overall, USDA reports that in 2009 the U.S. government commented on about one-third of all foreign SPS notifications submitted to WTO, an increase from previous years when the United States commented on about 10% of all foreign SPS notifications. This rise in U.S. comments on foreign SPS notifications is one indication that SPS measures may increasingly be affecting U.S. agricultural exporters in some international markets. (Similar information is not available for TBT measures, but would likely also cover other non-food traded goods.)

Formal SPS/TBT Trade Disputes Involving the United States

Although not all trade concerns about the use of SPS and TBT measures rise to the level of a formal complaint to the WTO, some trade concerns involving SPS/TBT measures have the potential to develop into a formal trade dispute, requiring WTO dispute resolution between the U.S. and its trading partners in some cases.

As of March 2014, in the WTO, 40 cases have cited the SPS Agreement and 49 cases have cited the TBT Agreement (the latter including non-food related disputes). Roughly half of all cases under both agreements have involved the United States as either "complainant" ( Table 2 ) or "respondent" ( Table 3 ). Many of these cases continue to be debated. These listings include formal cases involving agricultural and fisheries products and processes under the SPS Agreement and TBT Agreement, but exclude nonfood traded goods as well as some other products such as distilled spirits and textiles.

A trade dispute arises when a member government believes another member government is violating a WTO agreement. The complaining member must submit a "request for consultations" identifying the agreements it believes are being violated. Governments can, and often do, resolve SPS and TBT (among other trade) disagreements informally through bilateral and multilateral discussions, usually among technical experts (e.g., scientists, or health professionals) and, if necessary, higher-level trade officials. If such methods are not successful in resolving a particular concern, the countries involved may conclude that a bilaterally agreed approach is not possible. If the trading partner is a WTO Member, and if the United States considers that measure is inconsistent with WTO rules, the United States may decide to assert its rights under the SPS or TBT Agreements through the WTO's dispute settlement system. Disputes that cannot be resolved through bilateral and multilateral discussions may be elevated to formally established dispute procedures. Within the WTO, these procedures are spelled out in the WTO's Understanding on Rules and Procedures Governing the Settlement of Disputes.

If a WTO dispute settlement panel ultimately determines that a country's SPS or TBT measure, for example, is inconsistent with a member's WTO obligations, and WTO members adopt the panel and/or any appellate body report, the defending country is expected to withdraw the measure. Compensation and retaliation are available as temporary remedies. If compensation is not provided to the complaining country by the defending country, and the two still fail to reach a mutually acceptable solution, the WTO panel can authorize trade retaliation if the complaining country so requests. Such retaliation generally takes the form of higher tariffs against a portion of the defending country's exports to the complaining country.

Potential Effects on International Agricultural Trade

The intended purpose of most SPS/TBT measures is to protect the safety and the integrity of the domestic and imported food supply. However, there are concerns that SPS/TBT measures have the potential to restrict international trade. In some cases, this may be an unintentional outcome by an importing country in its efforts to ensure food safety. In other cases, SPS/TBT measures may be used as a form of disguised protectionism by an importing country. The potential of SPS/TBT measures to become non-tariff barriers to trade has increased as monetary tariffs on traded goods have been reduced under multilateral trade agreements and various free trade agreements.

In some cases, SPS barriers and agriculture-related TBTs can impose significant economic costs on agricultural and food exporters, by forcing them to make often costly changes in production or marketing in order to comply. A foreign SPS or TBT action can halt all imports of a product, resulting in market or other types of economic losses for the exporting industry. Alternatively, the imposition of technical standards and guidelines may result in certain economic and societal benefits and offset other types of unaccounted for welfare costs that may be associated with trade, such as protection against public health risks from food safety outbreaks or foodborne illness, and also protection against plant and animal pests and disease, and/or degradation of environmental and natural resources. Given the importance of agricultural trade to the U.S. economy, the United States is pursuing ways to reduce and/or remove both tariff and nontariff barriers through multilateral and bilateral negotiations.

Importance of U.S. Agricultural Exports

The United States is a net exporter of agricultural products. Over the past few years, there has been a growing trade surplus in U.S. agricultural trade. Over the 2009-2013 time period, U.S. agricultural exports have averaged $124 billion per year, while imports have averaged about $91 billion per year. This gap between exports and imports has resulted in a U.S. trade surplus of more than $30 billion ( Figure 7 ).

USDA's Economic Research Service estimates that each $1 billion in U.S. agricultural exports supports approximately 6,800 jobs throughout the economy, and each $1 of agricultural exports stimulated another $1.29 in business activity (based on 2011 data). Accordingly, ERS reports that U.S. agricultural exports supported nearly 923,000 full-time American jobs both on and off-farm, and also resulted in a total economic output of more than $300 billion in 2011.

Estimated Economic Losses to U.S. Export Markets

Despite the stated policy goals of an importing country for imposing non-tariff measures such as SPS and TBT—namely, to protect public health and the environment—the WTO acknowledges that such measures are often deliberately for protectionist purposes and might impose economic losses on some exporting countries. However, quantifying the potential economic losses from non-tariff measures is not always straightforward.

Previous USDA Analysis (1996 Data)

As a follow-up to the Uruguay Round negotiations in the mid-1990s, USDA published a widely cited report of the aggregate estimated value of lost export revenue to U.S. agricultural exports from foreign technical trade barriers, including barriers due to SPS and TBT measures. The study identified agricultural products and import country regions of concern to U.S. exporters. The study reported the presence of "questionable technical barriers" in more than 60 countries affecting trade in more than 300 agricultural products, valued at an estimated $5.0 billion of U.S. agricultural, forestry, and fishery exports (using 1996 data), accounting for about 7% of total agricultural exports during that year: "Questionable technical barriers were reported for 62 countries. Over 300 market restrictions were identified that threatened, constrained, or blocked an estimated $5.0 billion of U.S. agricultural, forestry, and fishery exports, 7.1% of the $69.7 billion total exported in 1996."

SPS measures accounted for 90% of the estimated revenue losses in USDA's study, with the remainder from revenue losses attributable to TBT measures and other types of trade measures.

The underlying ERS survey data provide more information on these estimated trade effects. Although based on trade data from 1996, the reported underlying relationships may still be useful for understanding how trade may be affected from foreign technical trade barriers.

The ERS study reported that, by regulatory goal, two types of "risk-reducing" measures accounted for most of the total estimated export revenue losses: commercial plant and animal health issues (52% of the estimated export revenue losses) and food safety measures (39% of estimated losses), followed by other goals such as product quality and other concerns ( Figure 8 ). By policy instrument, process standards (55%) and product standards (24%) accounted for most estimated trade effects ( Figure 9 ), as well as full and partial bans (12%) and other requirements.

The ERS survey data identified a range of agricultural products affected by technical trade barriers ( Figure 10 ). By product category, four commodity groups accounted for most of the total estimated export revenue losses: further processed products (26% of estimated losses), grains and oilseeds (24%), animal products (17%), and horticultural products (13%), among other products including cotton, seeds, nuts, fish, and forestry products. Within the meat and produce categories, the bulk of the estimated trade effects was associated with beef products and also fruits. By geographic region, technical barriers affecting U.S. agricultural exports were most prevalent in East Asia, accounting for nearly one-half of all reported trade effects, followed by the Americas with about one-fourth of the estimated loss ( Figure 11 ).

Other Available Estimates

More recent comprehensive analyses of the aggregate costs to U.S. agricultural exports associated with foreign SPS/TBT measures are not available. Efforts to inventory and quantify agricultural non-tariff barriers such as SPS/TBT measures are complicated by the very nature of such measures, given that they often involve complex regulatory schemes and may lack transparency in how these requirements are applied and in the scientific justification supporting their use. It is also difficult to tease out the cost effects of private voluntary standards from government-imposed SPS/TBT measures, and, in some cases, private standards may have more influence on market access into a country than public mandatory standards.

Some studies do provide cost estimates, but often these estimates reflect total costs from all types of nontariff barriers—including prohibitions, and import quotas and licenses, as well as SPS or agricultural TBTs, and may span trade in both food and nonfood merchandise. Other studies instead focus their estimates more narrowly, for example, estimating the economic costs for a specific agricultural product or trade involving regulations between certain countries only, and do not provide aggregate estimates for all product exports globally.

Although more recent formal estimates of U.S. agricultural trade effects are not readily available, USTR continues to assert: "SPS trade barriers prevent U.S. producers from shipping hundreds of millions of dollars worth of goods, hurting farms and small businesses" and states that "elimination of unwarranted SPS foreign trade barriers is a high priority of the U.S. Government." Available estimates indicate that annual trade effects might cost U.S. agricultural exporters well over $1 billion annually. For example, USDA reports that in 2012 the agency's ongoing efforts to "eliminate barriers, open new markets, secure the release of U.S. shipments detained at foreign ports, and ensure the safe movement of agricultural products in a manner consistent with science and international standards" resulted in the agency preserving agricultural exports valued at an estimated $4 billion. Previous estimates by USDA reported that its efforts to resolve SPS barriers in FY2007, for example, allowed U.S. exports with a market value of approximately $1.3 billion to occur. Estimates associated with the ongoing TTIP negotiations indicate that the current regulatory regime and non-tariff trade barriers between the United States and the European Union may have added an estimated $20.2 billion in combined trade costs to U.S.-EU trade in food and beverages in 2011.

In the absence of more precise cost estimates, many U.S. agricultural groups and trade associations continue to actively pursue ways to resolve trade disputes involving SPS and TBT measures, and recognize the increasingly important role that non-tariff measures play in U.S. agricultural export markets.

Other available studies do provide an indication of the potential scale of market and economic implications from non-tariff barriers, including SPS/TBT measures. For example, a 2007 survey showed that among SPS and TBT measures affecting trade in 690 agricultural products exported worldwide, only four products did not face barriers in any importing country. In addition, among the 154 countries reviewed in the study, only 92 notified measures under the SPS and TBT Agreements. Studies also show that SPS and TBT measures may negatively affect exports from other countries, especially developing countries. A 2008 study shows that agricultural exports from Africa and the Caribbean and Pacific nations are often negatively and significantly influenced by SPS and TBT measures in certain import markets for a range of tropical and diversified products such as fruit, nut, and vegetable products and preparation, cereals, oil seed, and also cocoa and cocoa preparations. Researchers at the Organization for Economic Co-operation and Development (OECD) also note that "food regulation compliance costs have a relatively higher overall economic impact in low income countries than in high-income countries."

A 2009 study suggests that nontariff barriers restrict agricultural trade, and may be more restrictive to trade than import tariffs. The study shows that not only are average levels of ad valorem equivalents (AVEs) higher for agriculture than for manufacturing goods (27% versus 10%), but overall levels of protection—including calculated AVEs of nontariff barriers and import tariffs—are also much higher. Agricultural goods are estimated to have a higher overall average AVE (44%), compared to manufacturing goods (19%). The overall median AVE estimate is also higher: 20% for agriculture and 6% for manufacturing. Similarly, in 2012, the WTO concluded from a literature review of the estimated trade effects of both tariff and non-tariff measures that non-tariff measures may restrict trade far more than tariffs, and that SPS/TBT measures have a negative effect on agricultural trade, especially export market diversification. Another 2009 study looked at the extent to which certain nontariff barriers may result in higher retail prices for some foods, and concluded that nontariff barriers may substantially raise prices for fruits and vegetables, meat products, and also processed foods. The study also concluded that nontariff measures are generally more restrictive in the European Union, United States, and some South East Asian countries, and less restrictive in some African, Eastern European, and Middle Eastern countries.

Finally, other available studies have attempted to estimate the economic impact to specific agricultural products from regulations in certain countries. For example, one study estimated the potential gain in Washington State apple exports to selected countries, including China—where it is believed that if SPS barriers were reduced then U.S. apple exports would be greater. The study concluded that apple exports to China could increase by more than 20% if the tariff equivalent of SPS measures imposed in China were to be reduced, which could translate into possible income gains for Washington State apple exporters.

U.S. Strategy for Addressing SPS/TBT Concerns

Overview of U.S. Process

The United States maintains ongoing interagency processes and mechanisms to identify, review, analyze, and address foreign government standards-related measures that can act as barriers to U.S. exports. These activities are coordinated through the Trade Policy Staff Committee (TPSC), which is chaired by USTR and comprised of representatives from federal agencies with an interest in foreign standards-related measures. Representatives meet formally a few times per year and also maintain ongoing informal consultation and coordination on SPS and TBT issues throughout the year. Representatives of the subcommittee include officials from USDA, the Department of Commerce, and the Department of State, and also officials from the Office of Management and Budget (OMB) and federal regulatory agencies, such as the HHS Department's Food and Drug Administration (FDA) and the Environmental Protection Agency (EPA). More broadly, USTR chairs an interagency group (i.e., both USDA and non-USDA agencies with SPS and TBT responsibilities) that meets regularly on WTO SPS issues. As part of this ongoing interagency process, the United States regularly reviews SPS and TBT measures involving globally traded goods that are notified to the WTO, as required under the SPS and TBT Agreements.

Ongoing Interagency Efforts

Regarding agricultural products, the U.S. process for identifying and dealing with SPS and TBT issues is coordinated, at least in the initial stages, by staff of USDA's Foreign Agricultural Service (FAS), the lead USDA trade agency. An FAS office is the designated WTO "enquiry" point for communicating with other countries on SPS measures, and shares information with and from industry groups and exporters, USTR, FAS's overseas posts, and various regulatory agencies such as USDA's Animal and Plant Health Inspection Service (APHIS) and Food Safety and Inspection Service (FSIS), EPA, and FDA. FAS staff maintain a database on foreign SPS and agriculture-related TBT measures with a potential impact on trade, even those which may comply with WTO or other international trade agreement provisions. FAS chairs regular meetings of USDA technical staff from various USDA agencies to discuss the status of emerging and ongoing SPS/TBT issues, including options for resolving a potential dispute.

As SPS and agriculture-related TBT concerns arise, technical staff and other government officials usually initiate at least informal dialogue with countries concerning the measure in question. They also communicate with affected industries in the private sector. Oftentimes an SPS or TBT issue is most likely to be resolved when USDA or other government experts discuss its scientific aspects with their foreign counterparts. These staff-level discussions often help the importing and exporting parties to clarify their differences, and to determine mutually acceptable conditions for importing the affected product that will not compromise the importing party's safeguards. However, not all problems can be solved in this manner. Eventually, bilateral consultations with the foreign country over an outstanding SPS or TBT issue might be pursued by USTR, with USDA's assistance. USTR also can decide at any point to elevate the issue via a complaint to the WTO or, if a Canadian or Mexican measure, the North American Free Trade Agreement (NAFTA), triggering formal dispute resolution procedures. (Other FTAs generally defer dispute settlement to the WTO procedures.)

Regarding SPS measures, USTR reports that in 2012, the interagency group reviewed 908 SPS notifications by 50 WTO Members and provided comments to these trading partners on 119 proposed or in-force SPS measures.

U.S. Reporting Systems

USTR is required to submit to the President, the Senate Finance Committee, and appropriate committees in the House of Representatives, an annual report on significant foreign trade barriers, the National Trade Estimate Report on Foreign Trade Barriers (or NTE report). The NTE report covers significant barriers—including tariffs and various nontariff barriers, including those that are consistent and also inconsistent with international trading rules. The report categorizes, describes, and in some cases quantifies these barriers on a country-by-country basis.

As part of its NTE Report and its other two accompanying reports on SPS and TBT barriers to U.S. trade, USTR reports that SPS and TBT trade barriers continue to threaten, constrain, or block U.S. agricultural exports. These reports address concerns within more than 60 major U.S. trading partners. Recent reports have identified significant SPS-related trade barriers facing U.S. agricultural exporters in several countries. USTR also identified significant standards-related trade barriers to U.S. exports in several countries. A summary of the reported SPS/TBT-related trade concerns is presented in Appendix A . Each of these reports is available at USTR's publications website.

Among the types of reported measures that potentially cause concern for U.S. exporters are import policies targeting disease and pest transmission, chemical and pesticide residues, treatment and mitigation requirements, restrictive import and administrative procedures, import bans on products from specific producing areas and bans on certain production inputs, product and/or processing specifications, and perceived health risks. Aside from various standards-related TBT measures, USTR reports that the most significant SPS barriers impeding U.S. exports to multiple foreign markets are "restrictions related to export certifications, biotechnology, bovine spongiform encephalopathy (BSE), avian influenza (AI), and maximum residue limits (MRLs) for pesticides."

Responsibility of U.S. Government Agencies

The United States, like other countries, has in place an extensive, often intersecting, system to protect consumers from unsafe food and agricultural products and to protect its animal and plant resources from foreign pests and diseases. A variety of statutes and implementing regulations, directives, and administrative procedures underpin this system. These essentially constitute the nation's SPS measures. Major authorities are briefly described below.

At the same time, U.S. officials work cooperatively with other governments, frequently within international scientific bodies, to develop commonly recognized guidelines for SPS measures (and TBTs) that will promote balanced but safe trade in plants, animals, agricultural, and food products.

Trade Policy and Negotiations

The Office of the United States Trade Representative (USTR), an agency within the Executive Office of the President, is responsible for developing and coordinating U.S. international trade policy and overseeing negotiations with other countries, including with respect to foreign SPS and TBT measures. USTR meets with governments, business groups, legislators, public interest groups, and other interested parties to gather input on SPS and TBT issues and to discuss trade policy and negotiating positions. USTR coordinates U.S. trade policy through an interagency structure, and also serves as the lead U.S. agency in negotiating bilateral, regional, and multilateral trade agreements and lead U.S. counsel in all WTO disputes.

USTR consults with other government agencies on trade policy matters through the Trade Policy Review Group (TPRG) and the Trade Policy Staff Committee (TPSC), and coordinates processes regarding the specialized subgroups addressing SPS and TBT issues.

Food and Agricultural Products

Within the Department of Health and Human Services, the Food and Drug Administration (FDA) oversees the safety of most human and animal foods and drugs, primarily under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. §301 et seq. ). The primary exceptions are meat and poultry and their products, which are regulated by USDA's Food Safety and Inspection Service (FSIS) under the Federal Meat Inspection Act (21 U.S.C. §601 et seq. ) and the Poultry Products Inspection Act (21 U.S.C. §451 et seq. ). USDA's Animal and Plant Health Inspection Service (APHIS) has lead responsibility for animal and plant health under the Animal Health Protection Act (7 U.S.C. §8301 et seq. ) and the Federal Plant Protection Act (7 U.S.C. §7701 et seq. ). Pesticides are regulated by the independent Environmental Protection Agency (EPA) under the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §136 et seq .).

Each of the responsible agencies has promulgated an extensive body of regulations to implement these laws, all of which apply to imports as well as domestic products. For example, plants, animals, and their products require an APHIS import permit. Whether a product can be imported and the conditions for entry are dependent upon an APHIS risk assessment of a product and where it originated, taking into account internationally recognized scientific guidelines—that is, for animal health, the Office of International Epizootics (OIE), and for plant health, the International Plant Protection Convention (IPPC). The risk assessment usually culminates with formal rules in the Federal Register . FSIS evaluates foreign meat and poultry programs to ensure their equivalency with U.S. requirements and reinspects samples at the border. FDA requires imports to comply with the same safety and labeling standards that apply to domestic foods.

Biotechnology

The basic federal guidance for regulating biotechnology products is the Coordinated Framework for Regulation of Biotechnology (51 Fed. Reg. 23302), published in 1986 by the White House Office of Science and Technology Policy (OSTP). A key principle is that genetically engineered products should continue to be regulated according to their characteristics and unique features, not their production method—that is, whether or not they were created through biotechnology. The framework relies on existing statutory authority (such as those noted above) and regulations to ensure the safety of biotechnology research and products, including food and agricultural products.

Homeland Security

After the 2001 terrorist attacks, Congress created the Department of Homeland Security, whose agents now play a major role in inspections of imports, including food and agricultural products. Most of APHIS's border inspection functions and personnel were moved into the new department. Congress also passed the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (the "Bioterrorism Act," P.L. 107-188 ), which requires all foreign as well as domestic food manufacturing and related companies to register with the FDA, and requires that the FDA receive prior notifications of all food imports into the United States.

Other Relevant Programs

In addition to these major authorities, numerous other laws provide the basis for U.S. SPS measures and TBTs. The Agricultural Marketing Agreement Act of 1937 (7 U.S.C. 601 et seq. ) is an example of a TBT-related law. This law, among other things, provides the authority for requiring imported commodities to meet the same or similar grade, size, or other quality requirements as domestic products if they are regulated by a federal marketing order. Within the U.S. Department of Commerce, the National Oceanic and Atmospheric Administration enforces provisions of the Marine Mammal Protection Act and the Endangered Species Act that require certain fishing techniques to protect, respectively, dolphins and sea turtles.

Considerations for Congress

U.S. government and WTO reports and press releases frequently cite the benefits of the SPS and TBT agreements and progress made, under these agreements, in resolving disputes and facilitating trade between countries. However, some, among them food safety and environmental advocacy organizations, and groups that have more broadly opposed efforts toward globalization and harmonization of world trading rules, have long expressed skepticism. They have argued that implementation of the agreements can result in "downward harmonization" rather than upgraded health and safety standards. This can happen when, for example, a WTO dispute settlement panel questions the scientific underpinnings of a U.S. safeguard, and/or the United States agrees to an effectively lower standard to bring negotiations with another country to a successful conclusion.

Others counter that the current trade agreements explicitly recognize the right of individual nations, as well as states and localities, to enact stronger protections than international guidelines if they believe they are appropriate. The United States is especially well-positioned against challenges, because its health and safety policies are scientifically defensible, U.S. officials have argued. Many believe that the SPS and TBT agreements provide the foundation for developing transparent, science-based trade guidelines, as well as an effective framework for resolving disputes in these areas. Others have argued that ongoing free trade agreements, such as the TPP and TTIP, should revisit aspects of these agreements more closely. The effectiveness and flexibility of the SPS and TBT rules also continues to be tested by rapidly emerging changes in food production technology, such as biotechnology and nanotechnology, which were not imminent concerns when the agreements were finalized in 1994.

Many Members of Congress are following closely a number of ongoing SPS-related trade disputes that, they believe, have negatively affected agricultural producers in their states and districts. The most recent farm bill (Agricultural Act of 2014, P.L. 113-79 ) reauthorized the Technical Assistance for Specialty Crops (TASC) to address SPS and technical barriers to U.S. exports, and also established an agency position to coordinate SPS matters and address agricultural non-tariff trade barriers across agencies.

The U.S. Congress has held a number of hearings to discuss the ongoing FTA negotiations, and some of these have addressed regulatory matters including SPS and TBT. For example, at a House Ways and Means Trade Subcommittee hearing on TTIP in May 2013, Chairman Devin Nunes stated that any agreement must be "ambitious and comprehensive" and should "identify and eliminate unnecessary regulatory barriers, including sanitary and phytosanitary barriers to U.S. agriculture exports." A July 2013 hearing on TTIP by the House Energy and Commerce Committee's Subcommittee on Commerce, Manufacturing, and Trade discussed in broader terms existing regulatory barriers and the need "greater openness, transparency and convergence in regulatory approaches and standards while reducing unnecessarily redundant requirements."

Previous introduced legislation regarding SPS issues in agricultural trade has included H.R. 2707 (112 th Congress) by Representative Devin Nunes. H.R. 2707 sought to establish trade negotiating objectives of the United States with respect to the application of SPS measures to agricultural products to facilitate trade in agriculture.

Some lawmakers also have expressed concern that as additional FTAs further lower agricultural tariffs, countries may turn more and more to SPS and TBT measures to protect their farmers from import competition. These Members have stated that SPS matters will be among the factors they will consider in voting for new FTAs. The President must submit all FTAs to Congress, which in turn must pass implementing legislation if the United States is to participate.

Meanwhile, international SPS and TBT rights and obligations could come into play if the U.S. Congress considers legislation placing new restrictions and requirements on food imports. As noted, such bills are being proposed in the wake of a number of highly publicized adulteration incidents related to food and agricultural imports. Any new measures are likely to be closely scrutinized by U.S. trading partners for their adherence to international trade rules.

Appendix A. USTR-Reported Concerns Involving SPS/TBT Measures, 2013

Appendix B. Key Principles and Provisions of the SPS Agreement

Basic Rights and Obligations : (Articles 1 and 2, Annex A) Members have the right to take SPS measures "necessary for the protection of human, animal, or plant life or health," as long as they are not inconsistent with the language of the SPS Agreement, are "based on scientific principles," "not maintained without sufficient scientific evidence," "do not arbitrarily or unjustifiably discriminate ... ," and are "not applied in a manner which would constitute a disguised restriction on international trade" (excerpts from Article 2). Members could have SPS measures that result in a higher level of protection than relevant international standards, but only if based on scientific justification (Article 3.3) or a risk assessment (Articles 2.3 and 5).

Harmonization : (Article 3) To facilitate trade, countries are encouraged (but not required) to use relevant international standards and work toward harmonization—that is, the adoption of common SPS measures. To promote harmonization, the agreement cites, as sources of scientific expertise and globally recognized standards including Codex Alimentarius Commission for food safety; World Organization for Animal Health (OIE) for animal health and diseases; and International Plant Protection Convention (IPPC) for plant health.

Equivalence : (Article 4) Equivalence means that each importing country must accept the SPS measures of another country as equivalent to its own (even if they are not exactly the same), as long as the exporting country objectively demonstrates to the importing country that its measures achieve the same level of protection.

Risk Assessment : (Articles 2 and 5) SPS measures must be based on a risk assessment taking into account internationally recognized risk assessment techniques, scientific principles and sufficient scientific evidence, while also minimizing trade distortions. SPS measures must be no more trade restrictive than necessary to achieve a country's appropriate level of SPS protection, and "shall avoid arbitrary or unjustifiable distinctions in the levels" considered to be appropriate, if such distinctions result in "discrimination or a disguised restriction on international trade." Countries may adopt a provisional measure to avoid risk, but must seek information and conduct a risk assessment to justify permanent use of a measure that might restrict trade.

Notification and Transparency : (Article 7, Annex B) Requires countries to publish its regulations related to SPS controls and to notify its trading partners in advance about measures that could affect trade. Countries must also provide an "Enquiry Point" to respond to questions about, and provide comments on, new or existing SPS measures. Member governments must report trade measures to the relevant WTO body if the measures might have an effect on other members.

Within the WTO, the SPS Information Management System (SPS IMS, http://spsims.wto.org/ ) provides access to documents and records relevant under the SPS Agreement, and allows users to track: information on SPS measures that member governments have notified to the WTO; specific trade concerns raised in the SPS Committee; SPS-related documents circulated at the WTO; member governments' SPS Enquiry Points and Notification Authorities; and the membership of the WTO, Codex, IPPC, and the OIE.

Regionalization : (Article 6) Provides for adaptation to regional conditions, including pest or disease free areas and areas of low pest or disease prevalence. Previously, a country tended to ban an entire country's exports (of a product) from entry, if that product was associated with an unwanted pest or disease in the exporting country.

Dispute Settlement : (Article 11) Provides for formal consultations and the settlement of disputes involving scientific or technical issues, as well as adjudication by a WTO dispute settlement panel, if required. When a dispute arises, a panel seeks advice from experts, an advisory technical experts group, or relevant international organizations, at the request of either party to the dispute or on its own initiative. Decisions by a WTO panel may be appealed to the WTO Appellate Body.

Implementation and Oversight : (Articles 12 and 13, Annex C) Establishes a Committee on Sanitary and Phytosanitary Measures to provide a regular forum for consultations and information exchange, to periodically review implementation of the agreement and governments' compliance with it, to monitor progress in global harmonization of standards, and to work closely with the appropriate technical organizations on SPS matters. The SPS committee meets 3-4 times per year to discuss trade disputes related to SPS measures on an ongoing basis.

Appendix C. Key Principles and Provisions of the TBT Agreement

Non-discrimination and Avoiding Unnecessary Obstacles to Trade : (Articles 2, 5.1, and 5.2) Products imported from a Member country shall "be accorded treatment no less favorable than that accorded to like products of national origin and to like products originating in any other country." (Article 2.1) Members must ensure that "conformity assessment procedures are prepared, adopted and applied so as to grant access for suppliers of like products originating in the territories of other Members under conditions no less favorable than those accorded to suppliers of like products of national origin or originating in any other country, in a comparable situation" (Article 5.1.1). Related fees must be equitable (Article 5.2.5) and also respect the confidentiality of information about the results of conformity assessment procedures for imported products in the same way they do for domestic products (Article 5.2.4). Member countries must ensure that the technical regulation is not more trade-restrictive than necessary to fulfill the Member's legitimate objective. (Article 2.2) The obligation to avoid unnecessary obstacles to trade applies also to conformity assessment procedures, which must not be stricter than necessary to provide adequate confidence that products conform to the applicable requirements. (Article 5.1.2)

Alignment and Equivalency : (Articles 2.4, 2.6, and 2.7; also 5.4 and 5.5) Members should use relevant international standards, or the relevant parts of them, as a basis for their technical regulations, as well as relevant international recommendations and guides, or relevant portions of them, as the basis for their conformity assessment procedures (unless they would be ineffective or inappropriate to fulfill the Member's "legitimate objectives") (Articles 2.4 and 5.4). Members should also participate "within the limits of their resources" in the preparation by international standardization bodies, of international standards for products for which they either have adopted, or expect to adopt, technical regulation, and in the elaboration of international guides and recommendations for conformity assessment procedures (Articles 2.6 and 5.5). Members are encouraged to accept technical regulations that other Members adopt as "equivalent" to their own if these regulations adequately fulfill the objectives of their own regulations. (Article 2.7)

Performance-based Requirements : (Article 2.8) Whenever appropriate, product requirements should be set in terms of performance rather than design or descriptive characteristics.

Conformity Assessments : (Articles 9.1, 6.1 and 6.3) Members shall, whenever practicable, formulate and adopt international systems for conformity assessment (Article 9.1). Members must recognize "whenever possible" the results of conformity assessment procedures (e.g., test results or certifications), provided the Member is satisfied that those procedures offer an assurance of conformity that is equivalent as its own, which may require consultation (Article 6.1). Members are encouraged to enter into "mutual recognition agreements" or MRA providing for the mutual recognition of each other's conformity assessment results (Article 6.3).

Transparency : (Articles 2.9 and 2.11; 5.6 and 5.8, 10.1, Annex 3) Members must notify other Members through the WTO Secretariat when it proposes to adopt a technical regulation or conformity assessment procedure and to include in the notification a brief indication of the purpose of the proposed measure (regarding international standard, guide, or recommendation that does not exist or the technical content of a proposed technical regulation or conformity assessment procedure that is not in accordance with the technical content of relevant international standards, guides, or recommendations). Certain requirements apply regarding "reasonable time," codes of practice, and addressing all reasonable questions, among other things.

Technical Assistance : (Article 11) Members should provide technical assistance to other Members with respect to such matters as preparing technical regulations, establishing national standardizing bodies, participating in international standardization bodies, and establishing bodies to assess conformity with technical regulations.

Enforcement and Dispute Settlement : (Article 13 and 14) Establishes the Committee on TBT as the major forum for WTO Members to consult on matters relating to the operation of the Agreement, including specific trade concerns about measures that Members have proposed or adopted (Article 13) and provides for dispute resolution under the WTO and in accordance with the WTO's Dispute Settlement Understanding (Article 14).