Understanding Technical Barriers to Trade and SPS Measures

Posted on Jan 30, 2025 in Business Administration and Innovation Management

Technical Barriers to Trade (TBT)

The TBT (Technical Barriers to Trade) Agreement covers all technical regulations, voluntary standards, and the procedures to ensure that these are met (conformity assessment procedures), except when these are sanitary or phytosanitary measures as defined by the SPS Agreement. TBT measures could cover any subject, from car safety to energy-saving devices, to the shape of food cartons.

Technical Regulation

A document that lays down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory.

Any procedure used, directly or indirectly, to determine that relevant requirements in technical regulations or standards are fulfilled.

SPS vs. TBT

The TBT (Technical Barriers to Trade) Agreement covers all technical regulations, voluntary standards, and the procedures to ensure that these are met, except when these are sanitary or phytosanitary measures as defined by the SPS Agreement. It is thus the type of measure that determines whether it is covered by the TBT Agreement, but the purpose of the measure that is relevant in determining whether a measure is subject to the SPS Agreement.

Examples: Sanitary and Phytosanitary Measures

  • Additives in food or drink
  • Contaminants in food or drink
  • Toxic substances in food or drink
  • Residues of veterinary drugs or pesticides in food or drink
  • Certification: food safety, animal or plant health
  • Processing methods with implications for food safety
  • Labeling requirements directly related to food safety
  • Plant/animal quarantine
  • Declaring areas free from pests or disease
  • Preventing disease or pests spreading to or in a country
  • Other sanitary requirements for imports (e.g. imported pallets used to transport animals)

Technical Barriers to Trade

  • Labeling of composition or quality of food, drink, and drugs
  • Quality requirements for fresh food
  • Volume, shape, and appearance of packaging
  • Packaging and labeling for dangerous chemicals and toxic substances, pesticides, and fertilizer
  • Regulations for electrical appliances
  • Regulations for cordless phones, radio equipment, etc.
  • Textiles and garments labeling
  • Testing vehicles and accessories
  • Regulations for ships and ship equipment
  • Safety regulations for toys

The Relevance of SPS and TBT

  1. The main issue is not tariffs as it was at the creation of the WTO.
  2. This is the “new” debate in the international trade arena.
  3. Extra costs for international trade transactions.
  4. There are still great differences between the requirements in different countries.
  5. As the quality of life increases, the same happens with the number of measures.
  6. Creation of industries.

GATS: General Agreement on Trade in Services

The first and only set of multilateral rules governing international trade in services.

  1. The fastest-growing sector in the global economy (technology).
  2. A number of countries were skeptical and even opposed.
  3. Very flexible agreement. Ex. Exceptions to the MFN and NT (make them explicit).
  4. Negotiations to further liberalize international trade in services started in 2000.

GATS

  1. Movement of natural persons (specific activity/temporary jobs)
  2. Financial services (protection of investors and depositors/economic impact)
  3. Telecommunications (use of public telecommunication networks)
  4. Air transport services (no traffic rights, yes aircraft repair and maintenance, marketing, and computer reservations).