Trade Win No. 5
WTO committees keep agricultural trade moving
The role of international trade in improving food security is well-established. Trade allows countries with abundant arable land to export more efficiently produced food to countries that lack this advantage. It can also reduce price volatility and increase the diversity and quality of food available in a country. WTO data show that trade in agricultural products grew from $300 billion in 2000 to nearly $1.5 trillion in 2022. These gains resulted from stable WTO rules, lower tariffs, and regional trade agreements negotiated outside the WTO that led to even further reductions in barriers to agricultural trade.
Agriculture is a famously sensitive sector in international trade, and numerous agricultural trade barriers remain unaddressed. One reason is that non-tariff measures (NTMs) disproportionately affect agriculture. Studies show that even as overall tariff rates on agricultural goods have declined, NTMs have grown. These are much more difficult to negotiate than tariff reductions. NTMs include sanitary and phytosanitary regulations (SPS) dealing with plant and animal health and food safety as well as technical barriers to trade (TBT), such as food standards and labeling requirements. The WTO allows members to set their own SPS and TBT rules, but only as long as they are based on science and applied in good faith. They should serve to protect plant and animal health and ensure food safety and quality, not as a backdoor to protectionism. Members are obligated to notify the WTO of changes in domestic laws related to trade, like SPS and TBT rules.
Rather than weighing down the WTO’s dispute settlement system, members can raise questions about each other’s NTMs through the Specific Trade Concerns (STC) route in the SPS and TBT Committees and keep trade flowing. For example, in 2011, the U.S. discovered residue of tricyclazole (a fungicide) on Indian imports of basmati rice and refused to accept them because the Environmental Protection Agency had not established a tolerance level for this chemical in rice. India objected to the U.S. action in an SPS Committee meeting, kicking off the STC process. By 2014, the U.S. notified the WTO of a new regulation establishing tolerances for tricyclazole residue in imported rice and the STC was resolved.
Other examples abound: from 1995 through November of 2024, the WTO recorded 35,867 SPS notifications and 56,314 TBT notifications (for both agricultural and industrial goods). Of these, 1,444 led to STCs, and out of these, only 111 led to requests for consultations in the Dispute Settlement Body. A WTO analysis found that STCs provide new and higher quality information about trade measures than notifications alone and can bring about the resolution of trade concerns without formal disputes.
In sum, the WTO committees on standards and technical barriers to trade is often in the weeds but has paid off for tackling nontariff barriers in agricultural trade.
