The Right to Refuse Equivalence of Sanitary and Phytosanitary Measures: Trading on Regulatory Trust?

Abstract

Equivalence is an essential discipline for liberalising trade between States whose sanitary and phytosanitary (SPS) measures are based on divergent regulatory approaches. During the Uruguay Round negotiations, “equivalence” under the SPS Agreement was regarded by negotiators as being “of great importance”, and it was even considered to establish a right for exporting States. In practice, the discipline has remained ineffective, with only thirty-six equivalence recognition decisions made since 1995. This article argues that the underperformance of equivalence as an obligation is structural in nature: in effect, the SPS Agreement establishes a conditional right of importing Members to refuse equivalence requests. As such, exporting Members only gain equivalence protection where they either demonstrate that their measures (1) meet the importing Member’s appropriate level of protection or (2) achieve the same level of protection as parties to recognition agreements. Finally, the need for fostering regulatory trust between domestic SPS regulatory agencies is underscored as a prerequisite for achieving broader equivalence recognition.