2018/SCSC/WKSP4/004 Session: 3 Equivalence Recognition in Free Trade Agreements in the Asia-Pacific Region Submitted by: ASEAN Workshop on Trade Facilitation Through the Recognition of Food Safety Systems Equivalence Lima, Peru 21-22 June 2018
EQUIVALENCE RECOGNITION IN FREE TRADE AGREEMENTS IN THE ASIA-PACIFIC REGION ARIFIN TASRIF, Ph.D Director of Center for Quarantine Compliance, Cooperation, and Information Indonesia Agricultural Quarantine Agency (IAQA), Ministry of Agriculture, Republic of Indonesia Website : http//www.barantan.go.id Email :arifintasrif@kementan.go.id Email: arifintasrif@yahoo.co.uk HP/WA: +62.81290810111
Outline : 1. Background 2. NTM s Implementation in Regional Trade Agreement 3. Equivalence Recognition Implementation in APEC Region 4. Challenges and Opportunities of Equivalence Recognition In APEC Region
1.Background Why Equivalence Recognition? 1. Equivalence assessment and acceptance is an alternative way of facilitating trade; 2. The equivalence concept is based on the fact that regulatory goals, in relation to health (animal, plant and food safety), may be fulfilled by the use of different kinds of measures. 3. Equivalence recognition can lead to the same results as harmonization. 4. Encourage the use of equivalence to facilitate trade.
The Objective of SPS (Equivalence recognition) measures in trade facilitations among APEC region is : 1. To minimise effects of regulations on trade by encouraging the Parties regulators to work together; 2. To respect legitimate goals to protect human, animal an plant health; 3. To remove unnecessary trade barriers; and 4. To improve transparancy and provide clear timelines for approving imports or new products between the countries.
Outline : 2. NTM s Implementation in Regional Trade Agreement
Non-Tariff Measures (NTMs): Non-tariff measures (NTMs) are policy measures other than ordinary customs tariffs that can potentially have an economic effect on international trade in goods, changing quantities trade, or prices or both (UNTAC). Example of NTMs 1. Sanitary and Phytosanitary Measures (SPS): Measures that are applied to protect human or animal life from risks arising from: additives, contaminants, toxins or disease-causing organisms in food. 2. Technical Barriers to Trade (TBT) : Measures referring to technical regulations, and procedures for assessment of conformity with technical regulations and standards. 3. Contingent Trade-Protective Measures: Measures implemented to counter act particular adverse effects of imports in the market of the importing country contingent upon the fulfilment of certain procedural and substantive requirements 6
Regional Trade Countries
Market Access (Trade in Goods) Cooperation / CCB CEPA/EPA/FTA Tariff Non Tariff TBT SPS Recognition of Equivalence and MRA Others MFN Preferential Tariff Manufactured Products Agricultural Products
Table 1 : Non-Tariff Measures (NTMs) in ASEAN Region No. Country 1 Brunei Darussalam Measures SPS TBT ADP CV SG SSG QR TRQ XS 3 2 - - - - - - - 2 Cambodia - 3 - - - - - - - 3 Indonesia 122 118 47-3 - - 2 1 4 Lao PDR 2 1 - - - - 12 - - 5 Malaysia 40 236 25-3 - - 13-6 Myanmar - 2 - - - - - - - 7 Philippines 403 256 2-3 7 21 14-8 Singapore 59 57 - - - - 143 - - 9 Thailand 240 609 51-2 - 112 23-10 Vietnam 94 114 7-4 - - 2-9
Table 2 : Non Tariff Measures (NTMs) in RCEP Region No. Country Measures SPS TBT ADP CV SG SSG QR TRQ XS 1 Australia 442 205 80 12 - - 178 2 6 2 Brunei Darussalam 3 2 - - - - - - - 3 Cambodia - 3 - - - - - - - 4 China (RRC) 1201 1230 105 6 2-42 10-5 Indonesia 122 118 47-3 - - 2 1 6 India 200 117 352 2 3-59 3-7 Japan 545 805 9 - - 57 85 18-8 Korea, Republic of 587 839 34 - - 39 92 67-9 Lao PDR 2 1 - - - - 12 - - 10 Malaysia 40 236 25-3 - - 13-11 Myanmar - 2 - - - - - - - 12 New Zealand 561 108 6 - - - 83 3 1 13 Philippines 403 256 2-3 7 21 14-14 Singapore 59 57 - - - - 143 - - 15 Thailand 240 609 51-2 - 112 23-16 Vietnam 94 114 7-4 - - 2-10
No. Table 3: Non Tariff Measures (NTMs) in TPP Region Countries Measures SPS TBT ADP CV SG SSG QR TRQ XS 1 Australia 442 205 80 12 - - 178 2 6 2 Brunei Darussalam 3 2 - - - - - - - 3 Canada 1149 669 78 26 - - 48 21 11 4 Chile 563 499 4 - - - - 1-5 Japan 545 805 9 - - 57 85 18-6 Malaysia 40 236 25-3 - - 13-7 Mexico 326 566 71 3 - - 57 11 5 8 New Zealand 561 108 6 - - - 83 3 1 9 Peru 730 99 8 3 - - 6 - - 10 Singapore 59 57 - - - - 143 - - 11 Vietnam 94 114 7-4 - - 2-11
No. Countries Table 4: Non Tariff Measures (NTMs) in APEC Region Measures SPS TBT ADP CV SG SSG QR TRQ XS 1 Australia 442 205 80 12 - - 178 2 6 2 Brunei Darussalam 3 2 - - - - - - - 3 Canada 1149 669 78 26 - - 48 21 11 4 Chile 563 499 4 - - - - 1-5 China (RRC) 1201 1230 105 6 2-42 10-6 Hong Kong (China) 41 79 - - - - 142 - - 7 Indonesia 122 118 47-3 - - 2 1 8 Japan 545 805 9 - - 57 85 18-9 Korea, Republic of 587 839 34 - - 39 92 67-10 Malaysia 40 236 25-3 - - 13-11 Mexico 326 566 71 3 - - 57 11 5 12 New Zealand 561 108 6 - - - 83 3 1 13 Papua New Guinea - 1 - - - - - - - 14 Peru 730 99 8 3 - - 6 - - 15 Philippines 403 256 2-3 7 21 14-16 Russian Federation 145 85 20 - - - 93 4-17 Singapore 59 57 - - - - 143 - - 18 Taiwan (Chinese Taipei) 448 312 14 - - 20 44 22-19 Thailand 240 609 51-2 - 112 23-20 United State of America 2970 1523 355 109 2 173 59 52 13 21 Vietnam 94 114 7-4 - - 2 - Measures: Anti Dumping (ADP), Countervailing (CV), Quantitative Restrictions (QR), Safeguards (SG), Sanitary and Phytosanitary (SPS), Special Safeguards(SSG), Technical Barriers to Trade(TBT), Tariff-rate Quotas (TRQ), and Export Subsidies (XS) 12
Outline : 3. Equivalence Recognition Implementation in APEC Region
EQUIVALENCE : If the exporting country objectively demonstrates that its measures achieve the same Appropriate Level of Protection (ALOP )as the importing country Members shall Accept SPS measures of other Members as equivalent G/SPS/19/REV.2 14
EQUIVALENCE Standard-setting organizations food safety CODEX animal health OIE plant health IPPC Booster Trade Facilitation on APEC Region 15
Issues: EQUIVALENCE RECOGNITION MECHANISMS 1. FOOD SAFETY 2. ANIMAL HEALTH 3. PLANT HEALTH IRA RISK MANAGEMENT OPTION EQUIVALENCE RECOGNITION 1. Single Product 2. Group of Products 3. Wide System Base Reff: 1. CODEX : CAC/GL 34-1999; CAC/GL 53-2003; 2. IPPC : ISPM 24-2017; Book Publ. By Megan Quinlan, 2016); 3. OIE : OIE-ATHC, (Chapter 1.7.3., 2003);
FUTURE IMPLEMENTATION OF RECOGNITION OF EQUIVALENCE IN REGIONAL TRADE PARTNERSHIP AGREEMENTS ASEAN TPP EQUIVALENCE RECOGNITION APEC RCEP
Indonesia experience on the implementation of Recognition of Equivalence in Food Safety Systems ( Group of Products and wide system bases) CANADA USA FRANCE JAPAN AUSTRALIA ARGENTINE SOUTH AFRICA NEW ZEALAND
AGRICULTURE STANDARDIZATION PRACTICES (National Regulation For Best Agriculture Practices) Production Input Agriculture Production Handling Packaging Distribution Market Consumer 19
ASEAN cooperation related to SPS No 1. ASEAN Trade In Goods (ATIGA): ASEAN SPS Contact Points; ASEAN Committee on SPS; 2. ASEAN Single Window (ASW) ASEAN cooperation related to SPS 3. SPS COOPERATION IN ASEAN: ASEAN Food Security Information Systems (AFSIS); ASEAN General Guidelines on the Pre-peration and Handling on Halal Food; ASEAN Integrated Food Security (AIFS)/Strategic Plan of Action on Food Security in The ASEAN Region (SPA-FS); 4. SPS Cooperation in SPS: ASEAN Plant Health Cooperation Network (APHCN); ASEAN Regional Diagnostic Initiative (ARDI); ASEAN Maximum Residue Limits (ASEAN MRL s); ASEAN Good Agriculture Practices (ASEAN GAP); ASEAN Food Safety Network (ASEAN FSN); ASEAN Standard for live Infectious Bronchitis Vaccine and Inactivated Infectious Bronchitis Vaccine; Regional Framework for Control and Eradication of HPAI; ASEAN Animal Health Trust Fund (AHTF); ASEAN Phytosanitary Cooperation Network; ASEAN Network of Fisheries Post-Harvest technology Center / ASEAN Fisheries Development Center (SEAFDEC); ASEAN Shrimp Alliance (ASA); ASEAN Network on Aquatic Animal Health Center (ANAAHC). ASEAN Network on Pest Risk Analysis (ASEAN-PRA);
Outline : 4. Challenges and Opportunities of Equivalence Recognition In APEC Region
CHALLENGES EQUIVALENCY COOPERATION IN ADDRESSING FREE TRADE AGREEMENT Inform on detention of goods and facilitate test procedures (TF Art.5) Review and publish fees and charges (TF Art.6) Provide advance ruling besides tariff classification and origin (TF Art.3) Publish wide range of information related to import/export requirements and procedures (TF Art.1) SPS-plus (EQUIVALENCE) Freedom of transit: Limit formalities and Documentation Requirements (TF Art.11) Review and reduce import/export transit formalities (TF Art.10) Allow pre-arrival processing/publish average release times (TF Art.7) Border Agency Cooperation (TF Art.8)
Challenges of an Equivalence Acceptance Conditions for Success 1. Cost-benefit analysis. before entering into negotiation involving equivalence assessments of regulatory systems, the Party has to analyse the associated costs and benefits. Establishing equivalence is both complicated and time-consuming. The Party should thus consider carefully whether they should spend the efforts to entering into negotiation for trade facilitation. 2. Compatibility of regulatory systems. A certain degree of symmetry between the parties regulatory systems should exist before starting negotiations for trade facilitation. For instance, sound and effective regulatory infrastructure calls for three basic elements : Law and accompanying regulations (i.e legislative and administrative base). 3. Resources availability Qualifies trained staff to deal with programmes, and performance provisions and well equipped analytical laboratories and other facilities.
Challenges applied an Equivalence Acceptance Conditions for Success (cont ) 3. Resources availability Quality trained staff to deal with programmes, and performance provisions and well equipped analytical laboratories and other facilities; 4. Learning from experience The gradual process of establishing equivalence under a general trade framework gives regulatory agencies useful experience in dealing with complicated discrepancies between national systems. Regulatory agencies to search for information on how such trade arrangement work for other products and other countries.
Challenges applied an Equivalence Acceptance Conditions for Success (cont ) 5. Scope of the equivalence agreement Negotiating an umbrella arrangement that lays down the general principles that can be used to guide subsequent sectoral agreements on specific product or product groups. Equivalence (of measures of conformity assessment procedures) can thus established on case-to-case basis. 6. Building capacity and trust a. Regulatory convergence between the parties is a process over time that requires information exchange, mutual learning, training and trust building. b. Confidence between the parties is thus an important conditions for making it possible to establish and maintain equivalence. This is particular important with regard to the conformity assessment systems. c. The negotiating parties should thus start the process with information sharing and visits to each other s facilities. d. parties can assist each other in building capacity into the systems, making the system of the exporting country capable of performing assessment requires by the importing country
Challenges applied an Equivalence Acceptance Conditions for Success 5. Scope of the equivalence agreement Negotiating an umbrella arrangement that lays down the general principles that can be used to guide subsequent sectoral agreements on specific product or product groups. Equivalence (of measures of conformity assessment procedures) can thus established on case-to-case basis. 6. Building capacity and trust a. Regulatory convergence between the parties is a process over time that requires information exchange, mutual learning, training and trust building. b. Confidence between the parties is thus an important conditions for making it possible to establish and maintain equivalence. This is particular important with regard to the conformity assessment systems. c. The negotiating parties should thus start the process with information sharing and visits to each other s facilities. d. parties can assist each other in building capacity into the systems, making the system of the exporting country capable of performing assessment requires by the importing country
Oppurtunities applied Equivalence Recognition in APEC Region Implementation of Equivalence in APEC Region Covered: 1. The parties will recognize export certificates issued by the participating agencies, thus minimizing the requirements for further inspections and analysis. The Certificates will ensure that exporter meets the importing country requirements. 2. The agreements leaves inspection with the exporting country without any Additional inspection and analysis on aa arrival. 3. The parties thus mutually accept each others health (animal, plant, food safety) control and inspection systems as equivalent in order to ensure compliance with applicable regulation and standards. 4. The agreement thus combines a required compliance of the judgment of equivalence of conformity assessment procedures.
The Need APEC s Trade Facilitation Approach 1. Analyse why are rejected at borders and publish in Trade Standard Compliance Reports (TSCRs) which identify and address the bottlenecks in order to furher facilitate trade; 2. Support the development of a sound country risk management systems through assisting stakeholders to comply with technical regulatoions in in order to enhance the transparancy of trade procedures; 3. Assiss testing, inspection and accreditation entities to achieve internationally recognised accreditation thus enabling them to effer their services to clients competetive prices. This results in a cut production costs of local companies and reduce delays at the border; 4. Boost existing WTO SPS/TBT Enquiry Points active throughout developing regions by feeding in new information on TFA requirements and providing those involved in trading with access to an accurate and up to date information base; 5. Support Small and Medium Enterprice (SMEs) to overcome SPS and TBT related issues (eg. booster Equivalence/MRA), this minimizes the economic distance travelled by good in order to reach their market.
THANK YOU VERY MUCH GRASIAS TERIMA KASIH