SPS Mechanisms in TPP Agreement a Win for U.S. Agriculture

Sanitary and phytosanitary (SPS) regulations do not often make headlines related to the Trans-Pacific Partnership (TPP) agreement, but the SPS measures included are a win for U.S. agriculture.

By definition, SPS measures protect a country’s plant, animal and human health by reducing risks of additives, contaminants or toxins and/or preventing or limiting the spread of pests or diseases, according to the United Nations Conference on Trade and Development. An SPS measure becomes an SPS barrier when those regulations start protecting the domestic market rather than safe-guarding health and safety.

Floyd Gaibler, U.S. Grains Council director of trade policy and biotechnology, said international standards help distinguish between reasonable SPS measures and non-tariff, trade-distorting SPS barriers. Three expert bodies determine these standards – the Codex Alimentarius Commission for food safety, the International Plant Protection Convention for plant health, and the World Organisation for Animal Health for animal health. In most basic form, all these standards require that SPS measures be scientifically based.

When a country’s SPS measures step outside of science, however, the resulting incidents slow down the grain importing process, adding time and cost to shipments.

For example, Gaibler explained that Mexico recently held up shipments of U.S. corn because it required additional fumigation under the presumption that the shipments had excessive soil contamination. Under further examination, Gaibler said the SPS incidents started occurring after Mexico was unable to apply new raised tariffs to corn imported from the United States and Canada due to the North American Free Trade Agreement (NAFTA). The political implication behind an alleged plant health issue makes this SPS measure suspect, according to Gaibler.

However, he said deciphering the reasoning behind SPS incidents is often difficult. When an SPS incident occurs, USGC country and regional staff help obtain specific details, exchange information and identify potential resolution options with local U.S. Department of Agriculture (USDA) Foreign Agricultural Service (FAS) officials.

“Local staff can be on the ground there and talk directly to the grain handler, regulators and importing company to find ways to resolve the situation,” Gaibler said. “They are the frontline for our members to address these issues.”

Meanwhile, USGC staff in the United States convey that information to the U.S. Trade Representative and FAS, which help negotiate a final resolution.

This discovery and resolution process is time consuming and technical. As a result, the TPP agreement includes an enhanced SPS chapter that Gaibler said will create new enforcement and resolution mechanisms to help importers and exporters resolve SPS issues.

The most important of these measures is a rapid-response mechanism that requires faster, more structured notifications for SPS incidents as well as a tighter timeframe for reaching resolutions. These provisions are very positive for U.S. agriculture, as they help maintain the flow of trade while still allowing countries to implement science-based SPS measures.

According to the U.S. Trade Representative’s summary of the TPP agreement, “In developing SPS rules, the TPP parties have advanced their shared interest in ensuring transparent, non-discriminatory rules based on science, and reaffirmed their right to protect human, animal or plant health in their countries.”

More information and analysis of the SPS provisions and other pieces of the TPP agreement will be forthcoming in the coming weeks and months from U.S. government agencies and the Council.

More information about TPP is available from USDA's FAS, the Office of the U.S. Trade Representative and the Trade Benefits America Coalition.