Box 1 - Sanitary and phytosanitary risk management

Countries often have elaborate programs for the assessment and management of risk to determine the measures needed to ensure safe food supplies for humans and animals, to protect plants and animals or by plants. The GATT recognizes the right of countries to maintain such measures subject to the requirement that the measures do not arbitrarily or unjustifiably discriminate between countries where the same conditions prevail, or are not a disguised restriction on international trade (Article XXb).

There are three principal steps in sanitary and phytosanitary risk management which give rise to opportunities for introducing restrictions on trade, inadvertently or otherwise.

First, risk assessment involves evaluation of either:

the likelihood of a pest or disease becoming established or spreading and its potential consequences, or
the potential adverse effects on human or animal health as a consequence of additives, contaminants or toxins in foods, feedstuffs or beverages.

The evaluation of plant and animal pests or diseases must be based not only on information about the pest or disease itself and its means of reproduction or contamination, but also on the ecological conditions (that is, climate, geography, and associated biota) which may foster or limit its spread, and the susceptibility of animal or plant populations (the zoosanitary and chemical properties such as acute and chronic toxicity, carcinogenecity, and teratogenecity. Sanitary and phytosanitary measures are not limited to the protection of commercial species, but are applied also for the protection of wild flora and fauna. For pesticides, evaluation of the ways in which the pesticide affects the environment, particularly ground water, is also often required. Clearly, an improper assessment of risk, for example because of lack of information, misrepresentation of facts or the inclusion of inappropriate factors, may result in unwarranted barriers to trade.

Second, determining the acceptable level of risk - the appropriate level of health or sanitary protection - requires a judgment that reflects, among other things, a society's values. Uncontrollable and unknown factors often make it prohibitively expensive or impossible fully to guarantee safety. More generally, government authorities seek instead to determine levels of "no Unreasonable risk" or "negligible risk" because of the excessive costs of approaching "zero risk" relative to other competing objectives such as ensuring adequate food production efficient use of resources, and the economic benefits of production and trade. "Tolerance" levels may be set which indicate, for example, the maximum amount of a contaminant which will be permitted. In certain cases, where the consequences of acting otherwise could be severe, a zero tolerance, or no measurable level, may be set.

Third, perhaps the greatest potential for disruption of international trade occurs in the selection and application of health and sanitary risk management measures. Government authorities make risk management decisions which specify conditions or levels of use of particular quarantine requirements, chemical use restrictions, vaccination policies, processing regulations, testing, inspection and certification requirements. Various measures may achieve equivalent results in terms of health protection, but have very different consequences with regard to trade. Where importing countries insist on their own testing or certification procedures, delays and uncertainty about results present further costs to traders. The manner by which requirements are administered may also pose unnecessary burdens on imported goods.

The degree of complexity in risk assessment, flexibility in setting the level of acceptable risk, and discretion in determining risk management measures all imply that countries may occasionally, perhaps under interest-group prodding, impose unwarranted, trade-inhibiting restrictions. One of the objectives of the Uruguay Round negotiations is to establish disciplines that will permit governments to provide the necessary protection for humans, animals and plants while minimizing the adverse effects that such measures may have on international trade.