Private-Sector Standards Regulation with Food Safety in China:Can It Learn Anything from WTO?

Wu Suilong

(1.Shanghai WTO Affairs Consultation Center,Shanghai　200336;2.School of Economics　Fudan University,Shanghai　200433)

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Private-Sector Standards Regulation with Food Safety in China:Can It Learn Anything from WTO?

Wu Suilong1，2

(1.Shanghai WTO Affairs Consultation Center,Shanghai200336;2.School of EconomicsFudan University,Shanghai200433)

Ⅰ.Private-sector standard with food safety in the confines of WTO Regime

1.SPS agreement

The most pertinent agreement of WTO legal regime concerning private-sector in food safety area probably would be the SPS Agreement.As the constructive and more precise agreement,Sanitary and phytosanitary measures (SPS agreement) deals with food safety,animal and plant health.They aim to ensure that a country’s consumers are being supplied with food that is safe to eat — by acceptable standards — while also ensuring that strict health and safety regulations are not being used as an excuse to shield domestic producers from competition.〔1〕The primary and major function,therefore,which the SPS agreement performs,is to clarify the meaning of article XX of GATT.

With regards to the issue of private-sector standard with food safety,it is interesting to discuss first whether that voluntary private food safety standard could fall within the meaning of the measure as defined in the SPS agreement.In fact,considering the terms and words used in the SPS agreement,one can reasonably assume that the definition as defined in Article 1.1 in conjunction of reading with Annex A(1) does not cover the private food safety standard for the sake that the nature of substance of the measures listed in Annex A(1) is to some extent kind of compulsory.〔2〕This makes the essence of private-sector standard in food safety inconsistent with that said.

Besides,according to the customary rules of interpreting treaties,Article 31 of Vienna Convention on the Law of Treaties specifies:“A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.”〔3〕More specifically,the Appellate Body on US — Gasoline considered the principle of effective treaty interpretation (ut res magis valeat quam pereat) as “one of the corollaries of the ‘general rule of interpretation’ in the Vienna Convention”.The Appellate Body stated:“One of the corollaries of the ‘general rule of interpretation’ in the Vienna Convention is that interpretation must give meaning and effect to all the terms of a treaty.An interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility.”〔4〕When the SPS agreement was drafted during the period of Uruguay Round,the phenomenon of standard privatization of international law does not proliferate as now on,countries still being the only organs,inter alia in international trade law area.And it is not the drafters’ will to make the measures provided in that agreement including the private-sector standard and such omission of any terms relating to private standard should be regarded as act of with deliberation.〔5〕

Indeed,as correctly was noticed by Mexico during the meeting of the SPS Committee,“SPS measures as defined in Annex A were the core of the SPS Agreement”.Therefore,many works of the SPS committee relating to that realm have been or are still going.On the meeting of the SPS Committee held on March 30 - 31,2011 WTO Members agreed on five out of the six proposed actions.

Apart from the question of whether a private-sector standard with food safety falls within the ambit of SPS agreement,another problem would be,even if the private-sector standard with food safety can be regarded as the measures as defined in SPS agreement,do WTO members bear the obligations under SPS agreement to enforce all the substantive obligations?Or say,does article 13 applies to private-sector standard with food safety?Who are “non-governmental entities” and could private food safety and quality standard setters come within the definition? What might constitute “reasonable measures”?

As theses issues and questions have not yet reached a consensus during WTO members or interpreted by the WTO panel or appellate body,the answer to those questions are still unclear,making private-sector standard with food safety not falling within the regulation of WTO SPS agreement currently.Moreover,no explicit provisions are included that the standards be of a voluntary,non-binding nature should be fallen under the ambit of SPS Agreement.

2.TBT agreement

Another WTO agreement,which would also be relevant to the regulation of private-sector standard in food safety area,is TBT agreement.The TBT agreement,intending to further the objectives of GATT 1994,〔6〕applies to three major types of technical barriers as technical regulation,standards and conformity assessment procedures aimed at verifying complies with the technical regulations and standards.〔7〕Thus,if a private-sector standard with food safety does not fall within the realm of measures regulated by SPS agreement,with reading article 1.3 in conjunction with article 1.5,〔8〕such standard could be examined prima facie in the scope of TBT agreement provided it is promulgated by non-governmental standardizing body as defined in the TBT agreement.But back to the definition of standards provided as above,the question would rise as to which body or organization can the term “recognized body” be satisfied.What is the precise meaning or scope of recognized body,for private food safety standard,inter alia;does that recognized body possess some special or specific features? Apparently,the TBT agreement does not give us a clear answer.

While some terms and terminologies with respect to private-sector standard in food safety provided in TBT agreement does have more precise and detailed meaning than in SPS,the prerequisite of solving the issue aforementioned is the same,whether such private-sector standard fall within the meaning of standard in TBT agreement.Even if that requisite could be satisfactorily met,what constitute the “recognized body” is under heated discussion and the gap between controversial opinions is great and the aforementioned questions can not be answered with satisfactions.

In fact,during these several years,there new cases concerning TBT agreement have been brought to WTO dispute proceeding,putting upwards a symbol that Technical Barriers seemly deserved more attention and focus round the international society.〔9〕These cases,notwithstanding,do not reach what the developed and developing countries’ concerns on private-sector standards with food safety,and in turn,reflects the WTO panel’s unwillingness to extensively interpret such issue.

Ⅱ.What China can learn from WTO legal disciplines?

As have already be demonstrated above,WTO legal disciplines do not have precise,exact or clear regulations or attitudes towards private-sector standard with food safety,nor do the relevant committees would have the satisfactory solutions in the near future.Many disputable issues concerning that area are still under discussion between members or under the charge of relevant committees.What we can infer from the current WTO legal regime,mainly in SPS and TBT agreement is only that the proliferation of private-sector standard in food safety has already challenge the current WTO legal disciplines and make the developing countries feel the multilateral trading system with regards this area is not as fair as before,but that the developed or developing countries should promote the development of private-sector standard with food safety for getting a better international trade status.

As the WTO Appellate Body in Japan - Alcoholic Beverages II expressly stated that “the WTO Agreement is a treaty - the international equivalent of a contract”〔10〕But such contract should be originally viewed as the discipline governing member-states,other than private entities.In fact,the dilemma which WTO is facing with should be traced back to the complex relationship between competition law and WTO legal regimes.As one of the fundamental principle of WTO,free and fair trade is what WTO enhanced with and pursued.The competition law legal system,in essence,is out of the scope of WTO legal regime.That is why some people would argue the regulation on private-sector standards regarding food safety is neither necessary nor desirable in the ambit of WTO legal disciplines.〔11〕

Therefore,considering the current WTO legal disciplines,what China should learn and do is to based on the trend of the proliferation of private-sector with food safety,use its arms in hand to promote or encourage private-sector standard.That is reasonable and practical,for government,no matter whether being federal,state or central,provincial,on the basis of being voluntary,could affect the market via some soft mechanism as well as via the de jure mandatory ways.Such mechanism would probably include promoting the national codes of good practice with regards of private food safety standard,enhancing the integration of different private-sector standard arising from different individual entities.Also against that backdrop,the role China government should play is just the leading one,other than as a dictator,for private-sector standard in food safety area to develop.Moreover,in order for the private entities to abuse the priority status via private standard,a comprehensive and workable competition mechanism should be set up.

Indeed,since that in 1978 the open-door policy had been adopted,and that in around 1990s,China has adopted the economic market policy,China is not the country which the government owns everything as before.Not as true as some scholars put about 10 years ago that “there are about 60 nations without competition laws.Important WTO Members,such as Singapore and China,for example,have a competition policy but no competition law”.〔12〕China,however,since 2008,have already completed a comprehensive and workable competition law mechanism.

The aforementioned legal documents,without doubt,have symbolled that the current China legal regime with food safety have already formalized and under processing.Chinese government,at its disposal,could use more freely such legal arms at hand to regulate the private-sector standard with food safety and in extreme case,in order to prevent such private standard’s reputation and status abusing,to stabilize the interest of consumers and the entities from which private-sector standards with food safety is.Notwithstanding the great achievement that China has got during these decades,the governments attitudes towards private-sector with food safety is not that optimistic.Take the most relevant law,Food Safety Law of People’s Republic of China for example,some deficits could be found out.

In light of comprehensive reading and collaborating of these articles,one can figure out that the private-sector standard is only viewed as a supplementary tool in the food safety area under the new Food Safety Law of People’s Republic of China.China government’s attitude does still lie on the central control on the private-sector standard in food safety area and that will without doubt lead the China’s entities rely more upon government standard considering China entities’ culture tradition.If all the areas relating to agri-food chain are filled with government standards,private-sector standard would have no room to survive.This legislation logic can not be view as something that really promotes the private-sector standard with food safety and make the public standard and private standard complement each other.The private-sector standard with food safety’s proliferation is the outcome of global good governance,if just as a supplementary tool;this aim would not be achieved.And it will ultimately affect China’s entities’ competition ability in food area in the international fora.

Therefore,in order for China’s private food safety standards enhancing and developing,ultimately earning good reputation in international arena since WTO lacking relevant regulations,mandatory enabling the private food safety standard has the same legal status as with government standard would be necessary,practicable and noteworthy.And it is as well desirable to setting up the mechanism of government- private entities collaboration governance,which will make the administrative control on food safety standard even less stringent.

Ⅲ.Concluding remark

As has been demonstrated in the aforementioned part of this paper,the world in which private-sector standard in food safety is so complex and diverse that makes people feel it difficult to comprehensively understand.Today,within WTO legal regime,there is no sound or clear legally mandatory mechanism to discipline private food safety standard setting.Nor is there any clear legally mandatory mechanism for China’s national legal regime.On the other hand,no matter in international flora or national area,private-sector has excised more influence on the area of trade and business.〔13〕Though it is not matured to say that the private-sector standard with food safety would or would not fall within the ambits of WTO legal regimes,it can be reasonably predicted that in the near future,while the WTO and other international organization will still be discussing whether the private-sector standard in food safety area falls within some of the agreements therein,private-sector standard will,as now and just years before,proliferation during some of the largest multi-national companies,like Tesco,Wal-Mart,Carrefour etc still exit.Against that background and prediction,China should to some extent modify its current legal regal disciplines’ to make the private entities with regards food safety more willing to develop and adopt private standard.Probably the mechanism of government- private entities collaboration governance would be a best choice,which China government should adjust to.

References:

〔1〕See Preamble of SPS Agreement.

〔2〕See also Arkady Kudryavtsev,Private Standardization and International Trade in Goods:Any WTO Law Implications for Domestic Regulation? Paper presented to the Third Biennial Global Conference of SIEL,available at http://www.ssrn.com/link/SIEL-2012-Singapore-Conference.html.

〔3〕Article 31,Vienna Convention on the Law of Treaties,1969,United Nations,Treaty Series,Vol.1155,p.331.

〔4〕Appellate Body Report on US-Gasoline,p.23.(Foot note origin) Eg.,Corfu Channel Case (1949) ICJ Reports,p.24 (International Court of Justice);Territorial Dispute Case (Libyan Arab Jamahiriya v.Chad) (1994),ICJ Reports,p.23 (International Court of Justice);Also Yearbook of the International Law Commission,Vol.II at 219;Oppenhiem’s International Law,9thed.,Jennings and Watts eds.,1992,Volume 1,pp.1280-1281.

〔5〕For more details on this part,see also http://www.fao.org/docrep/003/X7354E/X7354e01.htm.

〔6〕Appellate Body Report,EC-Asbesto,paras 79-80.

〔7〕Norbert L.W.Wilson,Clarifying the Alphabet Soup of the TBT and the SPS in the WTO,Drake Journal of Agricultural Law,8,2003,pp.705-706.

〔8〕Article 1.3 and 1.5 SPS Agreement.

〔9〕See Panel Report,US-Clove Cigarettes,US-Cool,and US-Tuna II.All these cases majorly relates to the issue of whether the measures being complained constitute the technical regulations as defined in TBT Agreement,seeming having no pertinence with Article 4 of TBT Agreement,which concerns voluntary standards.

〔10〕Appellate Body Report,Japan-Alcoholic Beverages II,WT/DS8,10,11/AB/R,p.16.

〔11〕See Steven Bernstein,Erin Hannah,Non-State Global Standard Setting and the WTO:Legitimacy and the Need for Regulatory Space,Journal of International Economic Law,11(3),2008,pp.574-575.

〔12〕Matsuo Matsushita,Thomas J.Schoenbaum,Petros C.Mavroidis,The World Trade Organization.Law,Practice and Policy,Oxford University Press,Oxford,200,p.581.

〔13〕The WTO public forum in 2012 does have a dedicated section relating to private sector business.

It is predicted that in the near future,private-sector standard will,like Tesco,Wal-Mart,Carrefour,still exit.China should modify its current legal regal disciplines’ to make the private entities with regards food safety.Probably the mechanism of government- private entities collaboration governance would be a best choice.

private-sector standard regulation;food safety in China;WTO

About the author：Wu Suilong,Ph.D.Currently as Post-doctoral Research Fellow at Shanghai WTO Affairs Consultation Center and School of Economics,Fudan University.