Export Impact For Good

 
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  •     WTO: Sanitary & Phytosanitary Measures


    Addressing NTBs: Non-Recognition of Certificates of Conformity Assessment issued in the Country of Origin




    The non-acceptance of the certificates of conformity assessment issued in the countries of origin is considered as a major bottleneck in growth of exports from developing countries. Seeking resolution of this problem entails actions at various levels.


    Establish infrastructure for conformity testing (Laboratories)

    Inadequate infrastructure in terms of testing laboratories for conformity assessment is universally recognised as a major impediment to promoting exports. Participants generally felt that it should be the Government's responsibility to provide adequate infrastructure. However, it was recognised that investments of the order of $ 3-4 million are required to set up one laboratory. Many countries in the region, with small GDPs, don't even have the exports volumes, which can provide economies of scale for cost effective operations. Therefore, various options, described below were discussed for addressing this problem.

    1. Attract Foreign Investment: Internationally reputed laboratories could be invited to invest in the region. The investors can generate adequate returns by charging appropriate fee for testing.

    2. Regional cooperation was considered absolutely necessary as setting up such laboratories for collective use by exporters from several countries is likely to generate better economies of scale and maintain adequate standards.

    3. Public-Private Partnership with a view to sharing the financial implications was another option considered.

    4. Views were expressed (mainly from large wine producers of Montenegro) that the existing good laboratories in the large private sector firms should be considered for accreditation, which can then be made use of by small and medium enterprises.



    Establish Legal Framework on Standards

    Many countries in the Eastern and Southern region, after coming out of the Soviet system, were left with no legal framework on standards. The legal system needs to be established soon which will help in prodding the domestic producers to upgrade their production to bring them in line with the international standards. It will also enable them to regulate imports of sub-standard products. To the extent that these standards are harmonised with the similar EU legislations, dichotomy between production for the domestic market and for exports will reduce. Establishing the domestic legal framework on standards is a necessary precondition for seeking any negotiations on mutual recognition / Equivalence agreements. The delegation of Armenia shared their experience of developing new laws in this area. The countries wishing to refer to the Armenian activities in the field are advised to consult their website www.sarm.am.


    Establish a System to Counter Protectionist Measures

    Sometimes the reluctance in recognising certificates of conformity assessment issued in countries of origin is aimed at providing protection to domestic producers.

    • The exporters should, therefore, be vigilant in "smelling" the discriminatory practices, if any, practiced by importing countries. Such practices should be brought to the notice of their governments so that they can be followed up at appropriate fora.

    • Business-to-Business relationships and the trust generated between exporters and importers should be used to counter such practices. In this context Euro-Commerce highlighted the helpful role of the EU Market Access Partnership (MAP), a programme launched in 2007 to address companies' market access problems in third countries. Euro- Commerce also recommended the use of the European Commissions Export Helpdesk, an online service (http://exporthelp.europa.eu) to facilitate market access for developing countries to the European Union. This free and user-friendly service provides relevant information required by developing country exporters interested in supplying the EU market (related to requirements, taxes, import tariffs, customs documents, rules of origin and trade statistics). The site also provides a market place for business contacts.

    • The Chambers of Commerce and the Governments were advised to institutionalise collection of information on NTBs faced by their exporters on the lines of the system created by EU. The Euro-Commerce shared information on the EU system, which can be accessed at http://madb.europa.eu. On this website, the SMEs can access the EU-DG Trade data base on market access and provide an on-line entry point for all trade barriers complaints. The information thus collected can be used to take up the matter with other governments bilaterally / regionally or multilaterally in discussion in WTO Committees and, if not resolved amicably, through the dispute settlement system.

    • ITC is also developing a database, which will provide information about non-tariff measures (NTMs). ITC is currently working in close cooperation with a number of international organisations to collect data on NTMs applied by seven developing countries, including SPS and TBT. Information about the NTMs that enterprises face in these 7 developing countries when exporting to their major markets is also collected. Once the pilot phase of the project is complete, ITC aims to collect such information from all countries in order to develop a comprehensive global database of NTMs.

    Enter into Mutual Recognition Agreements

    The importance of mutual recognition agreements among Members was stressed to address this issue. Participants were informed of the WTO framework which obliges Members to engage in the process of mutual recognition and / equivalence of standards* . It was however felt that concluding negotiations on mutual recognition agreements is long and tedious with very low success rate.

    The long history of trust built between the exporters and importers in trading over the years would help during the process of negotiations and enhance their chances of success. A case history of one such successful experience of recognition of standards in the fish and seafood trade between Vietnam and EU was presented. Similarly Armenia stated that they could conclude a mutual recognition agreement on Crawfish with the EU. It has resulted in cost savings as the certificate issued in the Republic of Armenia is now recognised by the EU countries and there is no need for additional testing.


    This article is based on the deliberations of the ITC sponsored EU-Eastern European Business Forum in Ljubljana, Slovenia on 26-27 June 2008.

    The Forum was attended by Public - Private sector representatives from Albania, Armenia, Azerbaijan, Bosnia and Herzegovina, Croatia, Georgia, Former Yugoslav Republic of Macedonia, Moldova, Montenegro, Serbia, Romania, Russia, Slovenia, Slovak republic, Representatives of the Euro-Commerce, representing the retail, wholesaler and international trade sector in Europe.

    The objective of the Forum was to look at existing non-tariff barriers (NTBs) to trade of the Eastern and Southern European countries with the EU and amongst themselves. At the outset it was recognised that addressing NTBs requires sustained capacity building at home and pursuing bilateral / multilateral trade negotiations to remove discrimination and foster greater transparency and predictability in international trade rules. Therefore, the discussions aimed at making recommendations for taking action at all levels - national, regional and international- with strong public - private collaboration including through fostering business-to-business collaboration.


    *The SPS agreement foresees in Art. 4 (Equivalence) that "Members shall accept the sanitary and phytosanitary measures of other Members as equivalent, even if these measures differ from their own or from those used by other Members trading in the same product, if the exporting Member objectively demonstrates (...) that its measure achieve the importing Member's appropriate level of SPS protection." It further stresses that "Members shall, upon request, enter into consultations with the aim of achieving bilateral and multilateral agreements on recognition of the equivalence of SPS measures. Document G/SPS/19Rev.2 contains guidelines on how to make operational the provisions of Article 4. According to the TBT agreement "Members are encouraged, at the request of other Members, to be willing to enter into negotiations for the conclusion of agreements for the mutual recognition of results of each other's conformity assessment procedures". (Art. 6.3)