The Asian Development Bank (ADB) engaged a consultant to conduct an assessment of how SPS measures are administered and applied in CAREC countries and the extent to which application of these measures impedes or facilitates trade. A workshop was organized to validate the results of the preliminary assessment and develop a series of next steps to modernize and make more consistent the application of SPS measures regionally. In line with the discussions held, a phased, focused, and incremental approach is proposed. This TA will support the implementation of a dedicated SPS program for CAREC to help expand trade and enhance the competitiveness of growers and producers of goods and commodities subject to SPS measures.
The proposed TA will focus on providing initial policy, institutional, and project identification assistance to CAREC countries in modernizing implementation of SPS measures to facilitate trade. The objective is to build the foundations upon which to anchor an agenda for SPS reform in support of trade facilitation in CAREC
|Project Rationale and Linkage to Country/Regional Strategy
All countries maintain sanitary (human and animal health) and phytosanitary (plant health) (SPS) measures to ensure that food is safe for consumers, and to prevent the spread of pests or diseases among animals and plants. These SPS measures can take many forms, such as requiring products to come from a disease-free area, inspection of products, specific treatment or processing of products, setting allowable maximum levels of pesticide residues or limiting the permitted use of additives in food. SPS measures apply to domestically produced food or local animal and plant diseases, as well as to products coming from other countries. Ultimately, SPS measures help to ensure that agricultural commodities are safe for consumers, and to prevent the spread of pests and diseases across borders.
SPS measures, by their very nature, may impose restrictions on trade. All governments accept the fact that some trade restrictions may be necessary to ensure food safety and animal and plant health protection. However, governments are sometimes pressured to go beyond what is needed for health protection and use SPS restrictions to shield domestic producers from economic competition. In the CAREC region, while some SPS measures are imposed for legitimate purposes, others have become an obstacle for importing and exporting firms, thus acting to constrain rather than facilitate trade. When poorly designed and adopted with little consultation with the private sector, SPS measures hurt competitiveness by constraining the ability of companies to outsource key inputs, putting them at a competitive disadvantage in international and regional markets.
The regulatory framework for SPS administration and application remains essentially unreformed since the Soviet era. A strong policy base and regulatory infrastructure for risk-based controls able to complete the transition from the former Soviet system ( state standards', or GOST and sanitary rules and norms', or SanPiN) must be established. To identify legislative, regulatory, and procedural gaps between regulations set out in the SPS Agreement and the existing situation in each CAREC country, regulatory reviews need to be undertaken.
At most CAREC borders, in addition to customs formalities, it is necessary to comply with a range of procedures including animal quarantine and inspection of plants and other agricultural products according to the SPS system in place. Simplification and harmonization of these procedures are at the core of trade facilitation in the CAREC region. SPS agencies should be actively engaged in initiatives designed to rationalize and improve the coordination of border management modernization efforts. It is important to identify key needs, opportunities and good practices to enhance the effective engagement of SPS agencies in collaborative and coordinated border management. In a coordinated border management approach, it is necessary to address the relations among SPS agencies, other border agencies and private stakeholders. Customs and SPS agencies cooperate very little as duties are separately performed and guided by agency mandates. Some countries may combat many of the same pests and diseases attacking crops and livestock regional cooperation can be an effective tool for eradicating common pests and diseases. A regional focus is more efficient and has economies of scale with the sharing of expertise and facilities.
This technical assistance (TA) is designed to support collective and coordinated efforts to improve implementation of SPS measures throughout the CAREC region. The TA will (i) promote concerted reforms and modernization in the SPS area consistent with international standards, and (ii) bridge the gap on knowledge and capabilities of CAREC countries in designing, complying with, and implementing SPS measures.