How the SPS Agreement will Benefit New Zealand Exporters
Market access
The SPS agreement is making it easier for New Zealanders to sell their primary produce on world markets, because the signatories have undertaken to scientifically justify the SPS measures they impose.
This makes it harder for governments to erect non-tariff barriers to trade. Their measures must stand up to international scrutiny.
Lower compliance costs
New Zealand has an excellent reputation for meeting the requirements of importing countries, but this has often come at a big cost. Stringent inspection requirements for meat products imposed in the past by the EU and United States are prime examples.
Complying with unnecessarily rigid SPS requirements can marginalise an otherwise viable export operation. As unjustified requirements are stripped away, these costs will be reduced.
Standards will be increasingly brought into line with international ones, making costly special production runs for individual markets less necessary.
New markets
The SPS agreement will open up markets previously closed to New Zealand exporters, as governments bring their trade practices into line with the rules of the SPS agreement.
Certainty
The SPS agreement provides export industries with the confidence to plan ahead. New measures are signalled in advance, and their reasons explained. WTO members are no longer justified in imposing arbitrary and unexpected import restrictions with the potential to cripple an export industry.
The pace of change
The SPS agreement is part of an interlocking "package" of reforms which includes the gradual stripping away of export subsidies and domestic price support policies by WTO members - something New Zealanders had largely done by the late 1980s.
Even when the ink was still drying on the Gatt Uruguay round negotiations, it was expected that the full benefit of the trade reforms would take up to a decade to flow through to the New Zealand farm gate.
For New Zealand farmers and growers, opening up international market access cannot come soon enough. The slow pace of change is frustrating, but not unexpected.
In some economies, overnight exposure to the full blast of international competition could have devastating social and economic consequences for domestic producers.
Within the World Trade Organization, the more developed nations are helping emerging nations comply with the requirements of multilateral agreements like the SPS agreement.
Despite the apparent slowness, regulatory agencies around the world are beginning to move into line with the SPS agreement. International agreements giving trading partners improved market access are becoming increasingly common.
Page last updated: 21 July 2008