|Using International Standards:
A Wake-Up Call to Regulators?
by Raymond Schonfeld and John Dobinson
For the first time, the World Trade Organizations Technical Barriers to Trade (WTO/TBT) Agreement has been used to force a WTO member government to change a technical regulation in force, in order to incorporate the provisions of a relevant international standard.1 The implications of the case are immense and, although the standard does not concern industrial products, the case is directly relevant to all international standards bodies.
The Essence of the Case
The case concerns an international standard for the classification of sardines, which the European Union refused to recognize in an EU technical regulation.
The issue was whether one variety of fish sardinops sagax to specialists (see photograph) should be classified as a sardine. In a 1989 regulation, the EU answered no, and limited the use of the word sardine to one species (sardina pilchardus) found closer to Europe. Sardinops sagax, found in various waters, and notably (in this case) off the coast of Peru, could therefore not be sold in the EU as a sardine.
In the mid-1990s, the international standards body Codex Alimentarius, in a new international standard, said yes, that sardinops sagax could be described as a sardine.
Following the adoption of the standard, the government of Peru asked the EU to change its regulation accordingly. The EU refused.
Peru believed that this was an unjustified restriction on trade and that Peruvian export prospects were harmed by the refusal to classify their fish as sardines, and therefore applied the process specified in the WTO agreements to pursue its case. In May 2001, the government of Peru formally requested consultation under WTO dispute settlement rules. After the consultation failed, Peru requested the establishment of a panel to examine the EU regulation, claiming that it violated the TBT Agreement. Peru then won its case at both levels in the WTO system (with the Dispute Settlement Panel and the Appellate Body).
Early in 2003, the EU accepted the judgment and agreed to modify the regulation in question, to apply the specification in the Codex standard. It then published an amended regulation. Peru has yet to comment publicly on it.
Many of the arguments in the case are relevant far beyond the borders of the food sector. The case offers a precedent for using WTO procedures the nearest thing to a global court in this area to impose the use of international standards in national regulations.
Perhaps most important is the confirmation that the WTO has the power and process to determine whether an international standard is an effective and appropriate means of achieving a regulatory objective. If the answer is yes, regulators can be required not only to take account of international standards (i.e., to consider them, as the EU claimed to do in this case), but actually to use them and even to modify regulations that pre-dated the WTO to bring them into line. And the judgement, while explicitly endorsing Codex standards as valid for that purpose, implicitly confirms that other international standards bodies named in the TBT or Sanitary and Phytosanitary Measures Agreements are covered also. The risk of legal battles in the WTO is likely to force regulators to take international standards more seriously and, if they wish to get around them, to make sure that their reasons are transparent and justifiable under WTO rules.
Several more detailed issues are also potentially relevant as precedents:
When is a standard effective and appropriate? Since there were no issues regarding health, safety or the environment in the case, treatment of this question was limited. But the WTO panel did state that the protection of consumer expectations is a legitimate objective and ruled that the Codex standard met it. It ruled against the EU specification, on the grounds that, if a regulation itself has created the consumer expectations in question, it is not enough to claim as the EU tried to do that the regulation must be maintained in order to maintain the protection.
The burden of proof A party seeking to impose the use of an international standard in a regulation must demonstrate that the standard is an effective and appropriate means of fulfilling the regulations legitimate objectives.
The basis for regulation If a government claims that it has used an international standard as a basis for its regulation, as required by the TBT Agreement, it is not enough for the government simply to claim that it has read the standard if it has discarded a specific and relevant provision.
Retrospective effect The requirement to use standards as a basis for regulations can be applied to any regulations in force today,
regardless of when they were adopted.
Which international standards may be imposed? The case confirms that the Codex Alimentarius is an international standards body within the meaning of the TBT Agreement. A number of bodies would also certainly meet that definition.
The importance of those aspects is likely to outweigh the fact that the case leaves a number of important issues largely untouched. For example, it does not rule on whether any other standardization bodies, other than those named in WTO Agreements, may have their standards classed as international. It stipulates only that, to be recognized under the WTO agreements, a standards body must make its membership open to all WTO members, and confirms that Codex meets that criterion. So, certainly, would ISO and IEC, but would any others? The judgement does not say.
What Will Happen Next?
Time can move slowly in international organizations, and it may take time for vigorous debate to start. Even then, entrenched positions are likely to be repeated just as they were in this case. And again, just as they were in this case some of those positions will be struck down if greater efforts are not made to reconcile disagreements about which standards qualify as international standards, and about the circumstances in which they should be used.
But equally important will be the need to broaden debate. While this case represents an important first step for the WTO in using international standards to eliminate technical barriers, it is just that a first step and no more. The question whose standards can be classed as international? is only one of the outstanding issues. Others that remain to be tackled include:
Issues where there is room for genuine disagreement on regulatory objectives Standards that cover health, safety, and environmental issues are particularly sensitive, because countries may require different levels of protection. While the WTO Agreement explicitly allows for some such differences, it does not cover all possible cases. Electromagnetic disturbance is a case in point: one country may decide to regulate the issue by focusing on electromagnetic emissions rather than immunity, and impose lower levels of emissions (i.e., tighter standards) than international standards, which assume that immunity standards will also be applied. Is a resulting failure to apply looser emission standards legitimate?
The need for technological neutrality in the standards themselves Many standards are neutral, such as many core standards specifying test criteria and measurement methods. But not all are. In this case, it is not entirely wrong to say that the WTO ruling in effect imposed a technologically neutral international sardine standard. The Codex standard, unlike the EU regulation, does indeed leave the door open to several different sardine technological constructions (or species, in this case). But it would be stretching reason to say that the example of a technologically neutral sardine will automatically be applied to manufactured goods. What will happen to international standards that are themselves not technologically neutral? Nobody has the answer yet.
Even if definitive answers are lacking, there is much good work going on that can provide a base for developing best practices. Some examples:
The EU itself, despite losing this specific case, has a successful track record of using harmonized standards (in the EU case, these are either regional or global) in its regulations, to eliminate barriers within its own borders. For an example, see the EU material on its New Approach to technical regulation, of which an overview appears on http://europa.eu.int/ comm/enterprise/regulation/index.htm.
The Organization for Economic Cooperation and Development has produced valuable analysis to identify the conditions that must be met if international standards are to be more widely used in regulation. For an example, see the most recent OECD report in this area, which used the telecommunications sector as a case example for in-depth study. It is available at www.olis.oecd.org/olis/2001doc.nsf/LinkTo/td-tc-wp(2001)11-final.
The United States, and Japan and their Asia-Pacific Economic Cooperation partners have produced guidance to good regulatory practice in technical regulation, which includes guidance on standards. For an example, see APECs Information Notes on Good Practice for Technical Regulation, available at http://www.apecsec.org.sg/apec/
The United Nations Economic Commission for Europe has produced its own recommendation against broadly similar objectives. For an example, see UNECE Recommendation L at www.unece.org/trade/tips/docs/wp6_01/model-17r4e.doc.
None of these initiatives, however, has achieved enough global consensus to forestall disputes in the WTO. The WTO itself, in its Third Triennial Review of the TBT Agreement lastNovember, acknowledged the importance of efforts to identify and apply best practice in the use of international standards in regulation, but offered no specific solutions. Only one thing is clear: that the slower the world moves to more detailed agreements on how and when to apply international standards, the busier the WTO dispute settlement system can expect to be. //
1 The full text of the rulings reviewed in this article are available on a WTO Web page, by searching under Peru complaint.
Copyright 2004, ASTM International