Back to the List of Documents

COFI:FT/VII/2000/5

Table of Contents

INTRODUCTION

AGREEMENT ON THE APPLICATION OF SANITARY AND PHYTOSANITARY MEASURES
(SPS AGREEMENT)

AGREEMENT ON TECHNICAL BARRIERS TO TRADE
(TBT AGREEMENT)

AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES

UNRESOLVED ISSUES

SUGGESTED ACTION BY THE SUB-COMMITTEE

INTRODUCTION

1. World fisheries contribute about 80 million tonnes of food for human consumption per year of which almost two-thirds is processed in some way. More than one-third of fishery products is exported with exports from developing countries representing about 50% of the total. The EU, the USA and Japan are the major importers. Exports of fishery products contribute significantly to foreign exchange earnings of developing countries, but new trade barriers could slow further trade expansion.

2. The Uruguay Round of Multilateral Trade Negotiations reduced many import duties, thus facilitating international trade. The Millennium Round Negotiations may lead to further reductions in tariffs and reduction of general barriers to trade, since many fishery products and, in particular, value-added products, are still subject to high tariffs. The attention of many importing countries seems to have shifted the focus to other measures dealing with imported fishery products. In particular, the introduction of quality assurance systems based on Hazard Analysis Critical Control Point (HACCP) for exports to major markets has gained considerable importance. The results of the Uruguay Round negotiations in which participating countries committed themselves to eliminate or reduce tariff rates and non-tariff measures applicable to trade in goods are recorded in the Schedules of Concessions. These form an annex to the Marrakesh Protocol and are an integral part of GATT 1994.

3. Future demand for fishery products is expected to grow, driven by demographic increases and higher consumer purchasing power. With no major unexploited resources of wild fish known, the possible avenues for growth in supply include increased aquaculture production, reduction in post harvest losses and increased utilization of catch for human consumption. Better utilization requires development of new products or product forms from currently under-used resources, such as small pelagics. At the same time, growth in demand for convenience products in major markets creates the opportunity for exporting countries to combine the introduction of the quality assurance, e.g. HACCP based systems, with the production of more value-added fishery products for these markets.

4. The purpose of this paper is to provide a brief summary of those agreements which appear to have a specific relevance for international fish trade¹ and assist the discussions of the Sub-Committee regarding particular problems which countries may have encountered in implementing the agreements. The various agreements described should not limit the discussion and if others have created problems (or could be expected to have undesirable effects in the future), these may be mentioned as well².

AGREEMENT ON THE APPLICATION OF SANITARY AND PHYTOSANITARY MEASURES
(SPS AGREEMENT)

5. The SPS Agreement is one of the most relevant for fish trade as sanitary measures may prove to be a means of protectionism for importing countries. The relevant provisions of the SPS Agreement for trade in fish and fish products are:

1. the requirement to use harmonization principles, i.e. to establish national sanitary and phytosanitary rules reflecting standards agreed in the relevant international institutions; e.g., the Codex Alimentarius;
2. the requirement, when international standards do not exist or harmonization is not appropriate, to use the alternative equivalence principle whereby the importing country accepts that SPS measures in the exporting country achieve an appropriate level of health protection, even though they differ from the measures used in the importing country;
3. the requirement for either scientific evidence or appropriate risk assessment if a country intends not to rely on harmonization or equivalence but rather on its own domestic standards.

6. Seafood safety has gained very considerably in importance over the last years, and a rather complex set of trading situations has evolved as a result of increased trade in fishery products. In addition, seafood safety and quality measures can be effective non-tariff barriers to trade.

7. The FAO study on "Economics of Hazard Analysis and Critical Control Point (HACCP) programmes"³, concludes that it is necessary to estimate the economic value and impacts of achieving safer seafood at consumer, seafood production and processing, trade and government levels. The study points out that the practicalities or technical features of seafood safety and quality assurance systems are rather well known and accessible through the Codex publications, but that their economic implications have been researched only to a limited extent. In the future, economic studies as well as risk assessments will be necessary in order to evaluate fully the implications of quality assurance systems.

AGREEMENT ON TECHNICAL BARRIERS TO TRADE
(TBT AGREEMENT)

8. Technical regulations and standards applied to fishery products may at times lead to distortions or obstacles to trade. For example, there have been labelling disputes over canned sardines between Canada and the European Commission. Another example is testing procedures for imported fresh seafood that sometimes last longer than the shelf life of the product. Well-known are the tuna/dolphin and shrimp/turtle cases.

9. A relatively recent development is the eco-labelling of fishery products⁴ intended to inform consumers about a product's origin, with particular reference to sustainability and management of the resource and environmentally friendly harvesting and processing methods.

10. Apart from questions regarding the validity of the principles and criteria used, a number of questions has been raised regarding the procedures of eco-labelling, including:

1. how can the sequence from catch through processing to retail level be traced in a reliable way; and
2. what will be the consequences for small-scale fisheries in developing countries and the resulting products.

AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES

11. Although subsidies are widely used in many sectors of the fishery industry in a number of countries, they have seldom given rise to countervailing measures. The special duties on salmon from Norway and Chile imposed by the USA and the EU are, however, examples that these measures can be used. The Agreement on Subsidies would seem to govern subsidies in the fisheries sector in view of the fact that fish and fishery products were excluded from the Agreement on Agriculture⁵. It may play an important role in future multilateral trade negotiations. Several countries are investigating this possibility and are studying the effects of subsidies on international trade in fishery products.

UNRESOLVED ISSUES

12. A number of trade impediments are related to environmental issues, caused by growing concern over sustainable fisheries and the environmental impact from fisheries. Examples are certification and eco-labelling schemes. Examples of unresolved issues of importance to fisheries, which could be considered in future negotiations, are whether actions taken for environmental reasons resulting in trade barriers are legitimate within internationally agreed trade rules; how exceptions under Article XX might be viewed in the case of fisheries and aquaculture; and also, whether boycotts or bans instituted by sub-national rather than national governments are in conformity with GATT/WTO regulations.

SUGGESTED ACTION BY THE SUB-COMMITTEE

13. As the implementation of World Trade Organization Agreements has significant implications for international trade in fishery products, the Sub-Committee is invited to consider possible studies and other measures to facilitate implementation of existing agreements and to avoid, or minimize, disruption of fish trade flows.

1 The Sub-Committee discussed these in detail at its Fifth Session (document COFI:FT/V/96/3 "Implications of the Results of the Uruguay Round and the Creation of the World Trade Organization for International Fish Trade").

2 As possible examples may be mentioned the agreements on:
- Implementation of Article VI of the General Agreement on Tariffs and Trade (GATT) 1994 (anti-dumping);
- Import licensing procedures;
- Safeguards;
- Trade-Related Aspects of Intellectual Property Rights (TRIPS).

3 FAO Fisheries Technical Paper No. 381

4 This subject was discussed at the Sixth Session of the Sub-Committee. Paragraph 13 of the Report refers.
"The FAO Council recognized that eco-labelling was controversial and that FAO should continue its work in this area. The Council underscored the need to ensure that any eco-labelling scheme was transparent, voluntary, non-discriminatory and that it not be used to restrict trade" (Report of the 116^th Session of the FAO Council, para. 33).

5 The Agreement on Agriculture contains regulations dealing with subsidies in the agriculture sector which are less stringent or allow more delay in implementation than the rules of the Subsidies Agreement.