Opportunities from EVFTA commitments on Sanitary and Phytosanitary Measures (SPS)

 Sanitary and Phytosanitary Measures (SPS) are all regulations, conditions and mandatory requirements for imported goods in order to protect the lives and health of people, animals and plants, through ensuring food safety and/or preventing the entry of diseases of plant and animal origin.

As developed countries, EU members (including Germany) pay high attention to SPS measures and set very high standards for imported goods. This is one of the most difficult barriers for Vietnamese goods, especially agricultural products to access the EU market.

The EVFTA has a separate Chapter on SPS (Chapter 6). In addition to emphasizing the responsibility of Parties to fully comply with SPS obligations under the WTO, the SPS Chapter of the EVFTA also adds a number of new commitments, notably:

• Uniform application of SPS Measures to goods imported from Vietnam or the EU

The SPS measures shall be applied uniformly to the entire territory of the exporting Party (except for goods from high-risk areas). For Vietnam, this obligation is understood as Vietnam's SPS control procedures for EU imports must be applied uniformly, whether the goods come from the territory of Germany or any other EU member.

However, in case of disease and pest risk, Vietnam or the EU has the right to apply separate SPS measures geographically partitioned according to the level of risk (high risk, low risk, no risk). For example, if the disease is of high risk in France but not in Germany, then Vietnam will only apply restrictive measures to French products but not to products imported from Germany.

• Defining competent authorities to manage SPS of Vietnam and the EU

The existence of too many agencies to manage SPS matters leads to overlapping, difficulties in SPS management and making it difficult and costly for businesses. In order to partially solve this situation, the EVFTA has a number of commitments that clearly define the decentralization of SPS management for each Party.

  • SPS Management Agencies of Vietnam

The Ministry of Agriculture and Rural Development is responsible for the following SPS measures: (i) For imported goods: monitoring, controlling and preventing diseases and pests that negatively affect human, plants and animals and the economy; (ii) For export goods: inspecting, quarantining and issuing a certificate to ensure compliance with SPS of the EU;

The Ministry of Health, the Ministry of Agriculture and Rural Development, the Ministry of Industry and Trade, depending on their functions, are responsible for food safety for human consumption.

  • SPS Management Agencies of the EU and EU Member States

(i) For products exported to Vietnam: Each EU member country will be responsible for monitoring and ensuring that the production process complies with relevant requirements, inspecting and issuing certificates of conformity attesting to compliance with Vietnam's SPS requirements;

(ii) For products imported from Vietnam: Each EU member country is responsible for checking the SPS conformity of imported goods with the EU's general SPS conditions, while the European Commission is responsible for the overall coordination, inspection/audits of the control systems and related legal systems of the countries in order to ensure the uniform application of the SPS within the EU internal market.

Thus, Vietnamese goods exported to the German market have to comply with the regulations on SPS issued by the EU (uniformly applied in all member countries, including Germany). However, checking the conformity of Vietnamese goods to those regulations will be responsible by the German competent authority.

• Exempting from pre-inspection on SPS for export production establishments

A number of agricultural products of Vietnam (eg. Products of animal origin) when exporting to the EU will have to go through a two-step process: (i) the production establishments must be inspected by the EU for SPS purposes and approved for inclusion in the List of production establishments permitted to manufacture products for export to the EU; (ii) each consignment exported to the EU by these establishments will be subject to veterinary controls according to EU regulations.

The EVFTA has a commitment to exempt the inspection procedures by the importing Party for qualified establishments that have been certified by the competent authority of the exporting Party (with specific commitments on the process to be certified), i.e. reducing above step (i).

This commitment will be very beneficial for Vietnamese businesses because if the business is eligible and is on the list of qualified establishments recognized by the competent authority of Vietnam, they will be exempted from the pre-inspection procedures of the EU.

Process for equivalence of SPS measures

Recognition of equivalence is understood as the importing country's recognition that the exporting country's SPS measures are as equivalent as its SPS measures. If a SPS measure is recognized as equivalent, the imported goods will only have to go through the SPS control procedure in the exporting country without having to go through this procedure again when they arrive at the port of import. Thus, equivalence can create great convenience for importers and exporters.

However, in practice, each country/tariff area has great autonomy in deciding its SPS measures, so SPS measures for the same product may be different between countries/regions. Therefore, this recognition of equivalence is often not easy. The EVFTA also does not have any specific commitments to compel this recognition of equivalence, it only mentions a mechanism to facilitate the recognition of equivalence, if any.

• Right to apply emergency SPS measures

Under the WTO, importing countries have the right to apply emergency SPS measures to imported foreign goods if necessary.

To avoid the abuse of emergency SPS measures, the EVFTA requires that when a Party has serious concerns about an SPS matter such as a risk to human, animal or plant life or health, it should request consultations with the other Party as soon as possible and provide the necessary information to avoid causing disruption to trade.

However, if necessary, each Party still has the right to apply emergency SPS measures to goods imported from the other Party to protect human health, animals and plants without prior notification. However, the imposition of these urgent measures must be considered to minimize the impact on trade, and the importing Party must notify the exporting country of the measure within 24 hours. Upon request of the exporting Party, the importing Party shall hold consultations regarding the situation within 10 working days of the notification.

EVFTA full text for more information: https://wtocenter.vn/chuyen-de/12778-eu-vietnam-trade-and-investment-agreements   

Source: "Business Handbook: Exploiting the EVFTA  to import and export goods between Vietnam and Germany" - Center for WTO and International Trade