Urgent Need for Market Access Disciplining of Agriculture Trade: Profiling of Stringent and Non-Codex SPS based MRL Standards

Abstract

The world trade organisation (WTO) has liberalised trade considerably, but there are instances of imbalance and systemic issues persisting although we celebrate two-decade of the existence of this regulatory body. This paper provides insights into how there is a lack of disciplining of WTO compatible non-tariff measures at the multilateral level. It has led to members stretching the use of permissible provisions (Articles 5 and 7) under the sanitary and phytosanitary (SPS) agreement, allowing for deviation from international standards and not notifying with HS codes. All these actions, particularly over the last two decades, have increased the level of protection of their domestic industry under pressure from tariff liberalisation and correspondingly led to a rise in protectionism. Especially when the restrictions put on the imports, they are not adequately notified to the WTO. Information asymmetry (of various forms like – the WTO notifications without trade linkage, non-standardised approach to market access, non-codex MRL standards etc.,) is one of the biggest challenges to overcome when it comes to addressing the menace of non-tariff measure created mainly by the SPS and TBT measures. This paper attempts to bring to the forefront some of the imbalances in the global trading arena that have co-existed along with the WTO led tariff alone liberalisation efforts since 1995. To do this, we have analysed ten players in the global arena, considering various strategic consideration for India. In the paper, we have attempted to bridge this by providing what exactly is the level of requirements across ten countries in terms of active ingredients MRL standards. To elaborate on this issue, we have done the mapping of maximum residual limits (MRL) standards on active ingredients as provided by the Global MRL Database for ten countries alongside Codex standards (international). An analysis of the stringency test performed to quantify a comparison MRL standards scenario vis-a-vis the Codex standards for ten countries. The paper highlights the growing importance of MRL standards on active ingredients in determining global players in agricultural exports. This paper also analyses the MRL standards faced by top 33 agricultural products of India in nine markets. Further, there is an attempt to analyse the interface of tariff liberalisation (MFN) with MRL-based SPS standards, which are dominantly present “behind the border”.