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Facilitating Trade Through Regulatory Cooperation the Case of the WTO's Facilitating trade through regulatory cooperation The case of the WTO’s TBT/SPS Agreements and Committees Facilitating trade through regulatory cooperation The case of the WTO’s TBT/SPS Agreements and Committees FacILItatING TRade THROUGH RegULatoRY cooPERatION Disclaimer This work is published under the responsibility of the WTO Secretariat and the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the opinions or views of WTO members or the official views of OECD member countries. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Some of the terms used in this publication may have different meanings, or be used differently, in the context of OECD and the WTO, including as they appear in WTO Agreements and are used in WTO committees. The use of any terms in this publication does not represent any opinion or interpretation for the purpose of, and is without prejudice to members’ rights and obligations under, the WTO Agreements. FacILItatING TRade THROUGH RegULatoRY cooPERatION Contents Acknowledgements .....................................................................................................................2 Foreword .........................................................................................................................................3 Executive summary .................................................................................................... 4 Chapter 1 The importance of regulatory cooperation and the role of the WTO ..........................................6 Chapter 2 Broader context for cooperation on trade policy within the WTO .............................................14 Chapter 3 The role of the TBT and SPS Agreements in promoting IRC in members’ domestic rule-making ...........................................................................................32 Chapter 4 The role of the TBT and SPS Committees in supporting cooperation between members ................................................................................................ 50 Chapter 5 Improving the TBT and SPS frameworks .................................................................................. 64 Readers’ guide .........................................................................................................88 FACILITATING TRADE THROUGH REGULATORY COOPERATION Acknowledgements This publication has been jointly prepared by the OECD and the WTO Secretariats, in the framework of OECD work on international regulatory cooperation (IRC). It is part of a series started in 2014 that provides overviews of the structure, governance, instruments and processes of international organizations in support of IRC. In the OECD, the work was carried out by a team from the Regulatory Policy Division in the Directorate for Public Governance. The lead authors and coordinators were Céline Kauffmann and Marianna Karttunen. Valuable comments and inputs were provided by other OECD Directorates, including the Trade and Agriculture Directorate, the Legal Directorate and the Environment Directorate. For the WTO, the substantive work and drafting was led and undertaken by the Trade and Environment Division and the Agriculture and Commodities Division. The lead authors and coordinators were Devin McDaniels and Arti Gobind Daswani. Gratitude is due to the WTO Information and External Relations Division, which managed the production of the publication. The OECD and the WTO are grateful for comments received from delegates of the OECD Regulatory Policy Committee and participants in the partnership of international organizations for effective rule-making. At the OECD, work on regulatory policy is conducted under the supervision of the Regulatory Policy Committee whose mandate is to assist both members and non-members in building and strengthening capacity for regulatory quality and regulatory reform. The Regulatory Policy Committee is supported by staff within the Regulatory Policy Division of the Public Governance Directorate. The directorate’s mission is to help governments at all levels design and implement strategic, evidence-based and innovative policies to strengthen public governance, respond effectively to diverse and disruptive economic, social and environmental challenges and deliver on governments’ commitments to citizens. 2 WWW.WTO.ORG / WWW.OECD.ORG FACILITATING TRADE THROUGH REGULATORY COOPERATION Foreword Addressing global challenges in an increasingly complex and interconnected world demands greater international cooperation. It is also crucial to have in place a stable and predictable rules-based international trade system. This is embodied by the WTO and is further supported by fora such as the OECD Regulatory Policy Committee, which focuses on good regulatory practices and international regulatory cooperation. Unnecessary regulatory differences can impose costs that prevent businesses from engaging in trade. Moreover, the diversity in product requirements, while sometimes resulting from legitimate differences in societal preferences and priorities, can also be the undesirable and unintended result of regulatory systems working in silos. As such, international regulatory cooperation between members can help reduce Roberto Azevêdo trade costs while respecting differences in regulatory objectives. This cooperation Director-General of the WTO may take several forms and depths of engagement, many of which are directly relevant to trade outcomes. “Facilitating trade through regulatory cooperation: The case of the WTO’s TBT/SPS Agreements and Committees” highlights how the WTO Agreements on Technical Barriers to Trade (TBT) and on the Application of Sanitary and Phytosanitary Measures (SPS), and their related Committees, promote opportunities for regulatory cooperation between governments easing trade frictions. It demonstrates how specific disciplines of the Agreements and practices of the Committees promote cooperation. These include the notification of draft measures, harmonisation with international standards, and discussion of specific trade concerns, among others. The study also makes recommendations on how to better leverage the transparency and cooperation opportunities provided by the TBT and SPS Agreements. Angel Gurría This publication was prepared jointly by the OECD and the WTO Secretariats as part Secretary-General of the OECD of a series of case studies on the functioning and international rule-making activities of international organizations. It aims to help authorities make greater use of existing cooperation tools within the WTO’s TBT and SPS Agreements. Roberto Azevêdo Angel Gurría Director-General of the WTO Secretary-General of the OECD WWW.WTO.ORG / WWW.OECD.ORG 3 EXecUTIve SUmmaRY Executive summary This publication explores how the World Trade Organization (WTO) Agreements on Technical Barriers to Trade (TBT) and on the Application of Sanitary and Phytosanitary Measures (SPS) and their related Committees promote opportunities for international regulatory cooperation (IRC) between WTO members. Policy makers can draw from a variety of approaches to achieve their policy objectives and address the trade costs of regulatory divergence, including unilaterally, bilaterally and multilaterally. International organizations serve as institutional fora within which governments can engage in IRC. The WTO plays an important role in supporting members’ IRC efforts, through two key activities. First, the WTO provides a multilateral framework for the conduct of trade relations among its 164 members, with a view to ensuring that trade flows as smoothly, predictably and freely as possible. In particular, the WTO provides a forum for its members with respect to: (i) negotiations of trade agreements; (ii) the implementation, administration and operation of existing trade agreements; (iii) trade-related capacity building; and (iv) a dispute settlement system. Second, the WTO Agreements set important legal disciplines, the implementation of which promotes good regulatory practice (GRP) and IRC at the domestic level with the aim of reducing unnecessary barriers to trade. This is particularly the case for the SPS and TBT Agreements, which establish obligations on WTO members for the preparation, adoption and application of technical regulations, conformity assessment procedures and standards, as well as SPS measures, in order to facilitate the conduct of international trade in goods. The Agreements provide a unique multilateral transparency framework that contributes to cooperation, by setting notification requirements for proposed regulatory measures with potentially significant trade effects. The Agreements strongly encourage WTO members to use relevant international standards as the basis for their measures. In addition, disciplines on equivalence and recognition of foreign conformity 4 WWW.WTO.ORG / WWW.OECD.ORG FACILITATING TRADE THROUGH REGULATORY COOPERATION The SPS and TBT assessment results help ensure that traders do not face duplicative requirements Agreements provide or procedures when regulations differ across markets. These disciplines encourage the reduction of regulatory diversity and associated trade costs. a unique multilateral transparency To support implementation and operation of these disciplines, the SPS and TBT framework that Committees provide a forum
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