Regulatory barriers in international horticultural markets

During the Uruguay round of negotiations in 1995 WTO members agreed to multilateral rules governing the use of sanitary and phytosanitary measures (the SPS Agreement). These aimed to ensure that measures adopted by countries ostensibly to protect plant or human health were not in fact primarily in force to shield domestic producers from competition. This report from the USDA looks at the implementation of these measures to date examining impacts on horticultural markets and the outcomes of various disputes.The report finds that, through the requirements that regulations be transparent and science-based, many unnecessary barriers to horticultural trade have been lowered. More specific conclusions include:SPS disciplines have not only increased market access for countries that have internationally recognised biosafety regimes, but have also helped poorer countries, such as Argentina and Mexico, that rely on agricultural exports to generate foreign exchange.Data on impacts of SPS regulatory reform is rare but if the estimates given are indicative of potential gains, continuing modification of SPS policies will lead to sizable global benefits for both exporters and consumers, although domestic producers will suffer losses.The impact of international standards since the Agreement came into effect has so far been limited due to the lack of (and slow adoption of) agreed standards.Procedural obligations under the agreement have been a success. Transparency obligations and dispute settlement have discouraged misuse of measures, made contentious measures easier to track and encouraged reform.More research is needed to quantify the trade and welfare effects of alternative SPS measures in horticultural markets. Progress on this research agenda lags far behind similar efforts to assess the impacts of traditional trade barriers.