A proposal to evaluate the
legitimacy of Sanitary and
Technical measures in Brazil
Sílvia Helena Galvão de Miranda
Geraldo Sant’Ana de Camargo Barros
San Diego – CA
4-6th December 2005
1
Summary
1. Introduction:
– Concepts
2. Objectives
3. Important Previous Work
4. Relevance Index
– Economic Relevance
– Legitimacy
•
•
Legality
Consistency
5. Final comments
2
1 - Introduction
• LDCs need to develop tools to:
– antecipate and/or react to sanitary and technical
barriers;
– rationalize decisions on public policies
• Public and private interests
• Complexity to define/identify sanitary and
technical barriers => establish some criteria to
build a ranking of priorities
• Need to evaluate benefits and costs of sanitary and
technical barriers
3
Concepts
• Developed Countries => Sanitary and technical
requirements
• Developing Countries
– Problems on accessing information and scarcity of
trained personnel and financial resources
– Difficulties to implement necessary changes:
• Capital investments ($) to meet requirements
• Technology gap:
– Availability
– Technological change in production
• Technical and financial assistance from Developed Countries
– Developing Countries: welfare gains from restrictions
4
2 - Objectives
• Propose a relevance index to react to
technical and sanitary measures.
– Which elements should be part of the criteria?
– Suggest a weighing system of such elements
– Suggest a checklist to be used by policymakers
and trade negotiators
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3 - Important Previous Work
• Roberts et al. (1999) – two-step classification
system for technical barriers
• WTO Trade Policy Staff Committee (TPSC,
1998): a questionnaire to evaluate the
Consistency of Trade Measures with the SPS
Provisions
• Popper et al (2004): USA National Institute of
Standards & Technology (NIST) checklist as
identification criteria for TBT
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4 – Relevance Index
Nature of the measure: a regulation on
– technical, sanitary regulation,on conformity
assessment,or a standard (mandatory or voluntary)
• Economic Relevance
– Does the measure have significant impact on trade and
other economic variables (employment)?
• Legitimacy
– Legality
•
Is the measure nationally and internationally legal?
– Consistency
•
Is the measure technically and scientifically justifiable?
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Economic Relevance


Sector’s relevance for the affected Country Trade
Balance?
Current and potential domestic relevance?



Employment and wages
national and regional income
Relevance for the other country (that proposed the
regulation)?


within the production structure and interest groups
trade relevance of the good
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Economic Relevance Checklist
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Range of the measure and impact on trade balance: specific for a
good, set of goods or sector(s) ?
Is it a new requirement? Existing but not currently enforced one.
Intensity of impact on current and future exports
Impact on current and future market prices?
Does it affect a traditional trade partner or a new one?
Additional costs associated with compliance to new requirements ?
Delays in the customs procedures?
Immediate or progressive adjustment required?
Impact on trade of the country imposing the measure
Are there alternative, politically preferred, suppliers to that country?
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Legality
• Adequacy of the measures to the SPS, TBT
and WTO provisions?
• Legality elements:
– Transparency
– Non-discrimination among foreign suppliers
– Non-discrimination between domestic and
imported goods
– Scientific basis
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Legality Checklist
1.
To what extent the proponent complied with all the legal
requirements to implement the measure:
- proper deadlines to consult on the notifications;
- fair deadlines to implement the measure and
- level of compliance with the comments and criticisms from the
other WTO members
2. Does the measure discriminate between foreign and
domestic suppliers?
3. Does it discriminate among different foreign suppliers?
4. Is there a scientific support for its proposition? Is it from
international organisms ?
5. Does it refer to the Agreements’ legitimate objectives?
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Consistency
• Technical and scientific background:
– IPPC, the IOE and the Codex Alimentarius?
– Other scientific institutions?
– Type of risks
• Sanity: human, animal or plant health
• Environment
• Quality attributes
– Seriousness of the problem intended to be mitigated
• Lethality
• Reversibility
• Mitigating costs
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Consistency checklist
1.
2.
3.
4.
5.
6.
What is risk level of not complying with the proposed
measure?
Is there scientific proof of this risk level and of the necessity
of applying the measure?
What is the degree of scientific convergence about the issue?
Is the scientific basis recognized internationally, or only in a
domestically context?
Are there lower cost alternatives? Have they already been
tried by the affected countries? Do they assure the same
required level of security/safety?
Is the required technology available to implement the
measure? What are costs (labs, personnel) related to its
compliance?
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Example
Economic Relevance
High impact
Medium impact
Low impact
Legality
Highly
contestable
Partially
contestable
Uncontestable
Consistency
Highly consistent
Partially consistent
Inconsistent
L
E
G
I
T
I
M
A
C
Y
Relevance Index => Government reaction
WTO Dispute
Disputing
Negotiation
Collaborative
Negotiation
Requirements
accepted
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Weighing system for Economic Relevance
Checklist
Level of impact
Weigh*
No impact
0
Low impact
1
Medium impact
2
Large impact
3
Total impact
4 (Special case)
* The higher the number of points, the higher would be the priority
in questioning to WTO.
15
Weighing system for Legality
Checklist
Level of not-compliance
Weigh*
Completely legal
0
Close to legality
1
Close to illegality
2
Highly illegal
3
Special case (completely illegal)
4
* The higher the number of points, the higher would be the priority in a
questioning to WTO.
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Weighing system for Consistency
Checklist
Level of consistency
Weigh*
Highly consistent
0
Medium consistency
1
Low consistency
2
Highly inconsistent
3
Special Case (Inconsistent)
4
* The higher the number of points, the higher would be the priority in a
questioning to WTO.
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EXAMPLE –FMD
– Brazil – Indonesia ban on exports of beef
Economic Relevance Checklist:
a) beef share in the Brazilian agribusiness exports:
–
–
–
–
i) more than 10% (weigh 3)
ii) from 5% to 10% (weigh 2)
iii) from 1% to 5% (weigh 1)
iv) less than 1% (weigh 0)
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b) Brazilian market-share in Indonesian beef
imports
i.
ii.
iii.
iv.
more than 50% (weigh 3)
from 50% to 30% (weigh 2)
from 30% to 10% (weigh 1)
less than 10% (weigh 0)
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Legality Checklist:
i.
There is no international reference to support
the proposed measure (weigh 3)
ii. There are some international references to
support the measure (weigh 2)
iii. There is almost a consensus about the few
international references available to support the
technical or sanitary measure (weigh 1)
iv. The measure is totally based on the international
references (weigh 0)
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Consistency Checklist:
a) risk for human health if the regulation is
not adopted :
i.
ii.
iii.
iv.
zero probability (weigh 3)
low probability (weigh 2)
high probability (weigh 1)
almost sure (weigh 0)
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Consistency Checklist:
b) risk for animal health if the regulation is
not adopted :
i.
ii.
iii.
iv.
zero probability (weigh 3)
low probability (weigh 2)
high probability (weigh 1)
almost sure (weigh 0)
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Example: Economic Relevance Ilegitimacy
30
25
20
15
10
5
0
LEGIT
FMD1
FMD2
R.E.
BSE
Low Priority
Disputing
Negotiation
LABLING
High Priority
Disputing
Negotiation
MRL
High Priority
Collaborative
Negotiation
Low Priority
Disputing
Negotiation
High Priority
Disputing
Negotiation
23
RELEVANCE INDEX
 * ECONREL  (1   ) * ILEGIT
2
2
800
700
600
500
400
300
200
100
0
FMD1
FMD2
INDEX(0,5;0,5)
BSE
LABLING
INDEX(0,8;0,2)
MRL
INDEX(0,2;0,8)
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RELEVANCE INDEX
 * ECONREL  (1   ) * ILEGIT
1/ 2
1/ 2
6
5
4
3
2
1
0
FMD1
FMD2
BSE
INDEX(0,5;0,5)
LABLING
INDEX(0,8;0,2)
MRL
INDEX(0,2;0,8)
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5 - FINAL COMENTS
Proposals for addressing these
questions
1 - Keep track of the notifications on SPS and TBT
2 - Develop an automatic consulting system of based
on a network of agents from scientific institutions,
firms and government organisms
3 - Develop criteria to classify – with priority ranks the private and public demands of actions to solve
sanitary and technical complains
4 –Develop detailed studies and strategies for the
cases considered relevants.
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Sílvia Helena Galvão de Miranda
smiranda@esalq.usp.br
Geraldo Sant’Ana de Camargo Barros
gscbarro@esalq.usp.br
Phone: 55 – 19 – 3429 8801
http://www.cepea.esalq.usp.br
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