International Standards for Regulatory Deference Relating to National Food Control Systems: More to Do?

Abstract

This paper describes how the development of texts on regulatory deference by the Codex Alimentarius Commission (CAC) addresses relevant recommendations of the World Trade Organization (WTO) and supports Member countries of CAC in their negotiation and implementation of equivalence agreements. We consider the role and function of CAC within a rules-based multilateral framework, particularly in relation to the development and implementation of equivalence concepts. We then consider whether, through use of equivalence agreements, trade facilitation outcomes have been realised. Our hypothesis is that international standards on regulatory deference promote fair but aspirational standards and support fair practices in the trade of safe food – both vital outcomes for global food security and the achievement of many of the United Nations Sustainable Development Goals. We test this hypothesis against the framework provided by decisions of the WTO Sanitary and Phytosanitary Committee. We argue that the equivalence concepts and guidelines developed by CAC are appropriate but underutilised tools available for Member countries to strike a balance between their right to regulate to protect human, animal or plant life and health and to fulfil legitimate objectives whilst meeting their WTO obligations to avoid measures that constitute unnecessary barriers to trade.

I. Introduction

1. The multilateral framework

The Codex Alimentarius Commission (CAC) is an intergovernmental body ¹ responsible for the development and implementation of the Joint Food Standards Programme of the Food and Agriculture Organization of the United Nations (FAO) and the World Health Organization (WHO). ² Its purpose, as set out in the statutes agreed by the governing bodies of its two parent organisations, includes “protecting the health of the consumers and ensuring fair practices in the food trade”. ³

In 1986, the governments of contracting states began a review of the 1947 General Agreement on Tariffs and Trade (GATT) with the objective of correcting unfair competition and addressing inequities in market access and trading behaviour. The review resulted in the creation of the World Trade Organization (WTO) as the successor to GATT and concluded with the signing of the Final Act. The multilateral agreements on trade in goods appended to the Final Act include two agreements of particular relevance to the international food trade. First is the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement), which addresses the application of measures associated with the protection of human, animal and plant health against specific types of risks. Second is the Agreement on Technical Barriers to Trade (TBT), which seeks to ensure that technical regulations and standards, including packaging, marking and labelling requirements and procedures for the assessment of conformity with technical regulations and standards, do not create unnecessary obstacles to international trade.

The SPS Agreement has been categorised as having a high degree of legalisation, as it is characterised by obligation, precision and delegation. ⁴ The Agreement explicitly recognises the texts of the Codex Alimentarius (Codex) as relevant international standards, guidelines and recommendations for food safety. ⁵ In order to harmonise SPS measures as far as possible, it requires WTO Members to “base their sanitary or phytosanitary measures on international standards, guidelines or recommendations, where they exist, except as otherwise provided for in this Agreement”. ⁶ The TBT Agreement has a lesser degree of legalisation, in that it requires signatories to the Agreement to “use [international standards], or the relevant parts of them, as a basis for their technical regulations except when such international standards or relevant parts would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued”. ⁷

Codex standards, guidelines and codes of practice cover both food safety issues and issues such as food labelling that would inform technical regulations subject to the TBT Agreement. For the purpose of this article, and given the explicit recognition afforded to Codex standards by the SPS Agreement, we focus on the extent to which Codex standards on regulatory deference, and their implementation, are coherent with and address the decisions of the SPS Committee.

2. The Codex Alimentarius

The collection of standards, guidelines and codes of practice developed and agreed by CAC is referred to as the “Codex Alimentarius”. Codex Alimentarius texts are developed through a standardised process of initiation, elaboration and adoption (Figure 1). ⁸

Figure 1. The step procedure for the initiation, elaboration and adoption of Codex Alimentarius standards, guidelines and related texts. © FAO and WTO, 2017.

The development of Codex Alimentarius standards is a rigorous and transparent process that is open to every Member country to comment upon and provide input. For food safety standards, Codex follows the risk analysis paradigm, with risk assessments provided by FAO/WHO Expert Committees and ad hoc consultations and with CAC in the role of risk manager.

A particular feature of the Codex system is that for each technical area a Member State takes on financial and logistical responsibility for organising and chairing the relevant committee. Matters relating to equivalence – the subject of this article – are within the remit of the Committee on Food Import and Export Inspection and Certification Systems (CCFICS), which has been hosted by Australia since its inception in 1992.

Another feature of Codex is its openness and transparency. In addition to all working documents and reports, all Codex standards, guidelines and codes of practice – well over ten thousand of them in total – are published without charge to users through the Codex website, ⁹ along with a wealth of other resources to support implementation. The vast majority of these (Figure 2) are numerical standards setting maximum limits for additives, contaminants, veterinary residues or residues of pesticides in food. Many others are commodity standards, which define the physical and chemical characteristics of nearly 200 traded products, from sardines and spices to chilli sauce and infant formula. Others still relate to the operation of national food control systems and to regulatory deference.

Figure 2. “The Codex Scorecard” – numbers of standards and related texts that have been adopted into the Codex Alimentarius. Source: FAO and WHO, “Codex: 60 Years of Standards” (FAO 2023) <https://doi.org/10.4060/cc8700en> (last accessed 31 December 2023). © FAO and WHO, 2023.

All CAC work is driven by Members, and CAC is responsive to the needs articulated by its Members as new technologies relevant to food production and food trade emerge, such as alternative and cell-based proteins or information technology advances supporting e-certification.

There is broad agreement amongst informed commentators that the impact of Codex standards on trade has increased following the upgrading of the legal status of those standards from de jure voluntary to de facto legally binding when in 1995 the WTO, through the SPS Agreement, explicitly endorsed Codex as the relevant international organisation for international food safety standards against which national measures and regulations might be evaluated. ¹⁰ A recent analysis has demonstrated empirically this linkage between multilateral trade policy and international standardisation. ¹¹

II. Discussion

1. The history and development of relevant equivalence concepts

The SPS Agreement objectives ¹² set clear expectations on signatories to accept as equivalent each other’s SPS measures even if they differ from their own, provided that they are satisfied that those measures or regulations deliver the same outcomes in terms of appropriate level of protection or fulfilment of the same. This concept, and its application to decisions relating to regulatory deference, is captured in the definition of “equivalence” first adopted by CAC in 1997 and subsequently widely used in Codex texts as the capability of different systems to meet the same objective. ¹³

In terms of the SPS Agreement, these key concepts relating to the basis for bilateral or plurilateral equivalence agreements are elaborated further in subsequent discussions of the WTO Committee on Sanitary and Phytosanitary Measures (SPS Committee) and its thematic sessions, in particular the Committee’s decision on equivalence of 24 October 2001, reviewed on 23 July 2004, ¹⁴ providing guidance on implementation of Article 4, and the conclusions of the thematic sessions on equivalence on 30 October 2018 ¹⁵ and 18 March 2019, ¹⁶ which aimed to increase the awareness of WTO Member countries of the provisions of Article 4 of the SPS Agreement and existing guidance. Together, they identify several key concepts.

First – provisions relating to equivalence require a sound and documented basis. The SPS Committee’s decision makes clear that the appropriate level of SPS protection sought by an importing Member should be based on a relevant and recognised international standard, or otherwise on a documented risk assessment. In return, the exporting country shall provide science-based and technical information to support its objective demonstration that its measures achieve that appropriate level of protection. This also exemplifies the general approach in that equivalence should not be considered or applied independently of the other requirements of the SPS Agreement: to be the least trade restrictive as needed to achieve the health outcome; only to be applied to the level necessary to achieve the outcome; and to be non-discriminatory, especially by reference to what is achieved in domestic production in the importing country.

Second – the SPS Committee agreed that equivalence was an important trade-facilitating tool, given the prominent role of food and agricultural trade in today’s world. In turn, facilitation of agrifood trade is vital for global food security and for the achievement of the United Nations Sustainable Development Goals, including zero hunger – the facilitation of trade in safe food promotes food equality and availability. Furthermore, the SPS Committee agreed that it is a tool that is available for use by all countries, irrespective of the level of development of national food control systems. The guidance directs countries to consider requests from others, especially developing counties, for appropriate technical assistance.

Third – equivalence agreements can be defined according to the circumstances needed, be they broad or narrow in scope. Equivalence agreements may relate to individual control measures, groups of measures or entire control systems.

2. The elaboration of equivalence principles and approaches in Codex has been independent of but with reference to the WTO

The SPS Committee’s decisions on equivalence of 2001, reviewed in 2004, ¹⁷ also set out the expectations of the Committee in relation to Codex. In particular, the Committee decided that “Members should actively participate in the ongoing work in [CAC] on the issue of equivalence” and “recognize[d] the urgency for the development of guidance on the judgement of equivalence and … encourage[d] [CAC] to complete its work with regard to equivalence as expeditiously as possible”.

As implied by this expectation of the SPS Committee, the initiation in Codex of work on equivalence in the Codex had predated the 2001 and 2004 meetings. Indeed, at the very first meeting of CCFICS held in Canberra, Australia, in September 1992, the Committee noted that the “Codex was a body independent of GATT, although it worked closely with it”, and it overrode the concerns of some participants that the Uruguay Round of negotiations in relation to SPS measures had not been finalised at the time of the first CCFICS meeting, and accordingly “agreed that issues concerning equivalence, transparency, non-discrimination, least trade restrictiveness, economic factors and developing country needs could all be addressed through principles established by Codex”, ¹⁸ and subsequently that “application of equivalence principles” should form part of the work to develop harmonised guidelines on import and export inspection and certification systems that it proposed and agreed for adoption by CAC. ¹⁹

Members of CAC recognised, following the establishment of WTO, the interplay between the work of the two bodies in relation to equivalence. Consistent with the SPS Agreement, the Codex Principles ²⁰ recognised that different inspection/certification systems may be capable of meeting the same objectives and are therefore equivalent, and that the obligation to demonstrate equivalence rests with the exporting country. CCFICS commissioned and considered a discussion paper on issues relating to the judgment of equivalence and referred to the Executive Committee of CAC (CCEXEC) the matter of whether to proceed in CCFICS to elaborate guidelines for the more systematic application of equivalence beyond the judgment of equivalence of import and export inspection and certification systems. ²¹

In response, CCEXEC “was of the opinion and that the matter was a priority for the work of [CAC] … and that [CCFICS] was in the best position to deal with the subject with a view to developing concepts for equivalence in food control for import and export. This would require [CCFICS] to develop concepts, to identify issues for consideration by [CAC] and by other Codex Committees, and to suggest how a systematic approach might be applied.” ²²

This clear direction from CCEXEC has informed the subsequent work in Codex, which has focused on the elaboration of guidelines that could be used by importing and exporting countries when negotiating and implementing equivalence agreements. The work was further informed by the SPS Committee’s decisions on equivalence of 2001, reviewed in 2004, ²³ and by the recommendations of an FAO Conference on International Food Trade Beyond 2000 that, inter alia, “recognized the urgency and importance of developing Codex guidance on the judgement of equivalence, initially in a generic sense and subsequently in relation to specific topics such as equivalence of inspection and certification systems and measures to ensure food hygiene”. ²⁴ This recommendation was specifically endorsed by CAC, which requested CCEXEC to monitor its application. ²⁵

3. Codex guidelines on equivalence for importing and exporting countries

The work plan of Codex to date consists of three guidelines on equivalence, each of which is linked to Codex standards and related texts on the cognate aspects of food control systems.

a. Guidelines for the Development of Equivalence Agreements Regarding Food Import and Export Inspection and Certification Systems (CAC/GL 34-1999)

In 1999 CAC adopted guidelines relating to the equivalence of food import and export certification ²⁶ developed by CCFICS that draw on principles and definitions relating to equivalence set out in the earlier Guidelines for the Design, Operation, Assessment and Accreditation of Food Import and Export Inspection and Certification Systems (CAC/GL 26-1997), ²⁷ which were addressed to Members with the intention of harmonising their national approaches and systems for determining equivalence. The 1999 Guidelines provide practical guidance on the scope and types of equivalence agreements relating to official inspection and certification systems, considerations for exporting and importing countries before entering discussions on equivalence and on drafting and implementing an equivalence agreement, including a template or model equivalence agreement.

b. Guidelines on the Judgement of Equivalence of Sanitary Measures Associated with Food Inspection and Certification Systems (CAC/GL 53-2003)

Following the direction from CCEXEC and CAC regarding the priority that should be given to developing further and broader texts on equivalence, Codex developed guidelines relating to the equivalence of sanitary measures in general, such measures being set out in a range of other Codex standards, guidelines and codes of practice addressed to Member countries, again with the intention of harmonisation. The 2003 Guidelines ²⁸ define the equivalence of sanitary measures as the state wherein such measures applied in an exporting country, although different from the measures applied in an importing country, achieve, as demonstrated by the exporting country, the importing country’s appropriate level of sanitary protection. The definition of sanitary measures includes any measure applied to protect human life or health within the territory of the country from risks arising from additives, contaminants, toxins or disease-causing organisms in food or feedstuffs or from any other hazards in foods. The 2003 Guidelines are broad in scope, providing principles, procedures and process flows that might be applied to the determination of equivalence in relation to a comprehensive range of elements of sanitary measures, including: relevant laws, decrees and regulations; requirements and procedures for testing, inspection, certification and approval; and packaging and labelling requirements.

c. Guidelines on Recognition and Maintenance of Equivalence of National Food Control Systems (2023)

Recently (November 2023), Codex has adopted guidelines relating to the equivalence of national food control systems in their entirety. The guidelines draw on the earlier Principles and Guidelines for National Food Control Systems (CAC/GL 82-2013) ²⁹ and related texts that were addressed to Member countries with the intention of harmonising their national approaches and systems. These Guidelines (as with the ones above) aim to provide practical guidance, information and recommendations for importing and exporting countries to use when considering the appropriateness and scope of equivalence agreements that relate to the whole or part of a national food control system. They focus on assessing and recognising equivalence at the level of the system established and maintained by national governments, including policy-setting, system design and the implementation, monitoring and review of control systems for the production, packing, storage, transport, handling and sale of foods within national borders.

d. Consolidated guidance

Over the last twenty-five years, CAC has developed a comprehensive package of guidance on equivalence to Member countries, as outlined above. To improve the applicability of this guidance, CAC has now initiated work in CCFICS to develop consolidated Codex guidelines on equivalence.

4. A critical analysis of the utility of the Codex guidelines on equivalence

a. Selection of key equivalence concepts

As stated in the Abstract, our hypothesis is that international standards on regulatory deference promote fair but aspirational trade standards, and in order to test this hypothesis we have conducted a textual analysis of the Codex guidelines’ key equivalence concepts.

The concepts we have selected for this analysis are those elaborated by the SPS Committee, particularly in the Committee’s decision on equivalence of 24 October 2001, reviewed on 23 July 2004, and the conclusions of the thematic sessions on equivalence on 30 October 2018 and 18 March 2019. These are:

• Equivalence is an important trade-facilitating tool, given the prominent role of food and agricultural trade in today’s world.

  • ○ It is a tool that is available for use by all countries, irrespective of the level of development of national food control systems.

• Equivalence agreements can be broad or narrow in scope, relating to individual control measures, groups of measures or entire control systems.

  • ○ Provisions relating to equivalence should not be arbitrary and instead require a sound and documented basis.

• Equivalence should not be considered or applied independently of the other requirements of the SPS Agreement.

b. Intention of the Codex guidelines on equivalence

The contention of the authors is that the Codex guidelines are clearly intended to support the negotiation of equivalence agreements that act as trade-facilitating tools through the provision of practical but detailed guidance to Members. The guidelines state that recognition of equivalence provides “means for ensuring that importing country requirements are met with minimal trade impediments” ³⁰ and that it “can provide an effective means for minimizing unnecessary duplication of controls” and “should result in positive changes to the conditions of trade, and facilitate the more efficient and effective use of resources in the importing and exporting countries”. ³¹ The guidelines also recognise that equivalence agreements need to meet the other requirements of the SPS Agreement, advising, for example, that “exporting and importing countries may therefore need to establish priorities for consultations leading to development of agreements …. Such priorities should not conflict with WTO rights and obligations”. ³²

c. Completeness and applicability of Codex guidelines on equivalence

The Codex guidelines on equivalence are comprehensive, covering all relevant elements of measures and national food control systems that might be covered by equivalence agreements, including documentation and review. This aims to ensure that equivalence agreements that follow the Codex guidance are sound and are well documented. The guidelines are also useful, providing procedures, flowcharts and model agreements for use by Member countries when preparing for and negotiating equivalence agreements. These practical elements of the guidelines aim to ensure that they may be used by all countries, irrespective of their level of development. The ongoing work of consolidation of the three Codex texts on equivalence will further facilitate their usability.

d. Coverage of different types of equivalence agreements in the Codex guidelines

Codex guidelines on equivalence acknowledge that equivalence agreements can be broad or narrow in scope, stating that “such agreements may be limited to specific areas of trade or specific products” ³³ and “can be sought for any sanitary measure or set of measures relevant to a food product or group of food products”, ³⁴ further illustrating this by stating that “an equivalence request could be limited to assurances associated with a specified sector such as seafood, or further refined to a subsector such as aquaculture or a processing type such as canned seafood. A request for equivalence recognition could cover a horizontal process for providing assurances such as the recognition of regulatory controls for sampling protocols and/or laboratory or specific methodology approvals.” ³⁵

III. Conclusion

1. Useful, comprehensive guidelines with limited application

Although the above analysis concludes that the Codex guidelines are designed to support the fair trade of safe food, we should also consider whether the work to date has, in practice, established a functional architecture for equivalence agreements relating to national food control systems and the constituent elements of those systems.

There is limited evidence in the literature that supports the growing role of equivalence based on international standards such as the Codex standards. Analyses of preferential trade agreements show that few of their SPS chapters contain specific commitments beyond the core principles of the SPS Agreement, and relatively few – of the order of 20% – include specific commitments with relation to equivalence. ³⁶ These studies conclude that further efforts appear to be needed to advance the key trade-promoting roles of equivalence. However, one study that analysed regional trade agreements in Asia and the Pacific did identify a trend over time, with agreements signed between 2014 and 2018 including more extensive provisions on SPS, commonly including provisions relating to equivalence, than those agreement signed between 2009 and 2013. ³⁷

In our analysis, two key questions remain to be answered.

a. What is missing as part of the functional architecture of sustainability guidance that limits their full use?

Our view is that this fundamentally comes down to the level of trust. The trade in food and agricultural products is of high economic value, and when it comes to trade, in our experience, the question of whether different systems of national controls relating to SPS standards provide equivalent levels of protection often becomes a question of “why they will not” over “how they can” – all due to protectionist behaviour hidden behind differentiated standards. The value of risk- and evidence-based Codex standards in providing a basis of trust cannot be understated.

We also consider that it becomes a question of political will, commitment to the core tenets of rules-based trade and faith in the multilateral system so that it can be recognised that although food safety regulatory and national food control systems may look different, the outcomes of their systems of controls may also be inherently similar. Political will is needed today more than ever in order to respond to the current global food security crisis, but paradoxically it is also in shorter supply as the WTO has little power to constrain governments from restricting exports to mitigate against world market price volatility. ³⁸ Against this background, Codex texts assist in the understanding of not only what looks the same but also how to assess and understand differences within a systematic outcomes-based approach.

Our view is that the fundamental principles set out above that underpin the assessment of equivalence in national food control systems are not universally understood or implemented, despite multilateral engagement and collective focus over many years. As a result, the provisions in relation to equivalence agreements are underutilised and gains in terms of trade facilitation are not realised. Often this may be due to countries overthinking and overcomplicating equivalence considerations, driven by considerations based on short-term economics of trade and not on the long-term benefits of having established stable relations based on fair practices in the trade of safe food.

It is the authors’ opinion that the ongoing process within Codex to consolidate the three existing guidelines on equivalence may offer the opportunity to consider how the use of these valuable texts can be promoted and false impressions about their possible negative economic impacts be corrected.

b. How can equivalence be useful in a rapidly changing world?

Equivalence and the Codex guidance had their foundations in the creation of WTO and the development of its foundational agreements more than a quarter of a century ago. How can the concept be used to support the development of modern trading relationships in a rapidly changing world in which the need for transformation to support sustainable food systems becomes a matter of increased urgency and global consensus? ³⁹

A key consideration is that although international agreements to facilitate trade are binding, recommendations to address food system transformation are non-binding. ⁴⁰

This was recognised by the 12th Session of the Ministerial Conference to the World Trade Organization, which has directed the SPS Committee to explore how the implementation and application of the SPS Agreement can “facilitate global food security and more sustainable food systems, including through sustainable growth and innovation in agricultural production and international trade, and through the use of international standards, guidelines, and recommendations developed by the Codex Alimentarius Commission, the World Organization for Animal Health and the International Plant Protection Convention as the basis of harmonized SPS measures to protect human, animal or plant life or health”. ⁴¹ Adaptation of food systems to environmental changes and towards sustainability will raise questions related to the determination and maintenance of equivalence, as sustainable agriculture models and adaptations, informed by local, national and regional climatic patterns, cultures and practices, will undoubtedly and justifiably differ from country to country.

Considering the above, it is essential that we remain alive to the potential for innovation in the delivery of national food control systems and to the challenges and opportunities that these provide for demonstrating, recognising and maintaining equivalence in outcomes. Adaptation to the COVID-19 pandemic has, by necessity, increased the pace of innovation in some elements of practice, such as the rapid adoption and mainstreaming of virtual monitoring, inspection and audit in industry own checks, supplier checks, third-party assurance and national controls. How might we see these technologies deployed in demonstrating equivalence?

What, then, should be the response of Codex and the other international standard-setting bodies? Should they continue to set out detailed guidance and templates in terms of equivalence approaches once they have become established? Or is there also a need to elaborate and agree upon principles that might guide the development of future approaches to equivalence?

The authors may pose these questions, but for Codex, as a Member-driven organisation, it will be for the 188 Member countries and one Member organisation to determine and agree their response.