Understanding SPS Goods and Their Impact on International Trade

In today’s globalised world, international trade has become an integral part of many countries’ economies – meaning international trade consultancy services are essential for businesses who want to grow their business in global markets.

Goods and services are exchanged across borders, creating new opportunities for businesses and boosting economic growth. However, with the increasing volume of trade comes the need for regulation to ensure that products are safe and healthy for consumers, as well as to prevent the spread of diseases and pests.

This is where expert knowledge of one area of regulation – covering food, plant and animal products, or SPS goods – comes to the fore. In this blog post, we’ll explore the details of what exactly SPS goods are, why they’re important in international trade, and the economic impact they can have on a country.

What are SPS Goods?

Sanitary and phytosanitary (SPS) measures are regulations designed to protect human, animal, and plant health, as well as prevent the spread of diseases and pests. SPS measures can be applied to various stages of production, processing, packaging, storage, and transportation of goods, including food, animals, plants, and their products.

Examples of SPS measures include:

• Setting maximum levels of pesticide residues in food
• Requiring the use of specific veterinary drugs on animals
• Testing for diseases in plants before they are imported
• Inspecting food processing facilities to ensure appropriate hygiene standards

These measures are intended to ensure that the products traded internationally are safe for human consumption in the destination country, and that they do not pose a threat to public health, animal or plant health, or the environment.

SPS control compliance measures are imposed by the governments of individual countries. They are usually underpinned by rules set in international organisations such as the World Trade Organisation (WTO). These cover measures put in place to protect the health of consumers and to prevent the spread of diseases and pests across borders.

For example, a country may require that imported food products meet certain safety standards, such as being free of harmful levels of pesticides or contaminants, before they can be sold within its borders.

Similarly, countries may require that imported animals, plants and products of animal origin (POAO) undergo inspections and testing to ensure that they are free from diseases and pests that could harm domestic production.

clearBorder are leading providers in training and consultancy in the import and export of products of animal origins. Through detailed research in compliance with SPS goods and services, and trade knowledge on importing food and products of animal origins, our online training course in food and animal exports can help you and your business thrive across borders.

Why are SPS Goods Important in International Trade?

SPS goods are an essential component of international trade, but legislation is required to ensure the safety and quality of products traded between countries. The significance of SPS goods can be attributed to three general factors.

1. The trade of SPS goods constitutes a substantial portion of international trade, particularly between the UK and EU, as food, animals, plants, and products of animal origin are among the most commonly traded goods worldwide.
2. SPS measures play a vital role in ensuring the safety and quality of these goods, thereby building consumer confidence and facilitating international trade.
3. Compliance with SPS measures can open up new market opportunities for businesses, while non-compliance can result in trade disputes and reputational damage.

Given the importance of SPS goods in international trade, it is crucial for countries to establish robust SPS measures and regulations to safeguard their consumers and industries.

Protection of Consumer Health and Safety

One of the primary reasons why SPS goods are important in international trade is to protect the health and safety of consumers. SPS measures help to ensure that the food products, animal and plant products, and other goods that are traded internationally are safe for human consumption and do not pose a threat to public health. For instance, measures related to food safety can prevent the spread of food borne illnesses.

Protection of Animal and Plant Health

Another important reason why SPS control goods are important in international trade is to protect animal and plant health.

SPS measures help to prevent the introduction and spread of pests and diseases that can harm agricultural production, as well as the environment. For example, animal and plant health regulations can help to prevent the spread of diseases such as avian influenza, while measures related to plant health can prevent the spread of pests that can damage crops.

Environmental Protection

In addition to protecting consumer and animal and plant health, SPS control goods are also important for environmental protection. SPS measures can help to prevent the introduction and spread of invasive species that harm native ecosystems. They may also seek to prevent the release of harmful chemicals, pesticides and pollutants into the environment.

Facilitation of Trade

Furthermore, effective SPS regulations matter in international trade because they facilitate trade between countries.

By ensuring that products meet certain safety and health standards, SPS measures can help to reduce the risk of trade disruptions, such as import bans or rejections of products at the border. This can help to promote a more stable and predictable trading environment, which is essential for businesses involved in international trade.

The Economic Impact of SPS Goods

The Sanitary and phytosanitary (SPS) measures that are in place to protect human, animal, and plant health, as well as prevent the spread of diseases and pests, can have a significant economic impact on countries involved in international trade.

Weak or nonexistent SPS measures can lead to a country becoming a dumping ground for low-quality or unsafe products, which can harm its domestic industries and international reputation.

On the other hand, robust SPS measures can attract more trade and investment, as well as protect a country’s own industries and create opportunities by giving confidence to export partners.

Protecting Domestic Industries and Reputation

One of the most important economic impacts of SPS measures on developed countries is the ability to protect domestic industries and trade reputations. If a country’s SPS measures are flimsy, or don’t exist, it may become a hotbed of low-quality or unsafe products – this can cause great harm to industries and reputation.

For example, if a country allows the importation of contaminated food, its domestic producers may lose market share to foreign competitors that can produce and sell food at lower prices due to lower standards.

On the other hand, if a country has robust SPS measures in place, it protects its own industries and consumers and enhances its ability to export elsewhere.

Effective SPS measures give consumers confidence in the nature, quality and safety of the products they purchase, be that products of animal origin, animal by-products or plant goods, which can increase demand for domestic products and promote economic growth.

Affecting the Price of Goods

SPS measures can also affect the price of goods. If a country requires stricter testing or inspection procedures before moving goods, this may increase the cost of production for exporters. However, these costs can be offset by the benefits of complying with SPS measures, such as increased consumer confidence and access to new markets.

Moreover, the increased cost of compliance with SPS measures and imports can stimulate innovation and investment in domestic industries, leading to the development of new technologies and processes and more efficient production methods. This process, in turn, can lead to increased competitiveness and higher-quality products.

Trade Disruptions

Failure to comply with SPS measures can result in the rejection of products at the border, import bans, and other trade disruptions that can have serious consequences for businesses and the economy as a whole. Such disruptions to imports can lead to lost sales, supply chain disruptions, and damage to a country’s reputation, all of which can have a negative impact on economic growth.

SPS measures are an essential component of international trade, and their economic impact is considerable. While complying with SPS measures may increase the cost of production for businesses, it can also provide benefits such as increased consumer confidence and access to new markets.

The Role of SPS Agreements and Regulations

SPS agreements, rules and regulations are important in ensuring that SPS measures are consistent and transparent across countries.

The WTO’s Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) sets out the rules and procedures for SPS measures in international trade. It requires that SPS measures be based on scientific evidence, non-discriminatory, and not more trade-restrictive than necessary.

In addition to the SPS Agreement, many countries have their own SPS regulations and standards with customs declarations. These import regulations may differ from country to country, which can create trade barriers for imports and increase the costs of compliance for exporters.

The Benefits of Complying with SPS Measures

Complying with Sanitary and Phytosanitary (SPS) measures brings manifold benefits to businesses involved in international trade. By complying with SPS measures, businesses can enhance their reputation and build trust with consumers, as well as access new markets and increase their export opportunities.

Furthermore, complying with SPS measures can help businesses avoid costly and time-consuming trade disputes.

Enhanced Reputation and Consumer Trust

Compliance improves a business’s reputation by showing that it prioritises the safety and health of its customers. This can lead to increased consumer trust and loyalty, as customers are more likely to purchase products from businesses they trust.

In addition, a business’ good name can help differentiate it from competitors, which can be especially relevant and important in crowded marketplaces.

Access to New Markets

Complying with SPS measures also gives businesses access to new markets.

Many countries have their own specific SPS regulations and requirements for imported goods, and failing to meet these standards can result in certain goods being rejected at the border.

By complying with these requirements, businesses can access new markets and increase their export opportunities. This process can be especially beneficial for businesses in developing countries, which may face more stringent SPS requirements when importing or exporting to developed countries.

Avoidance of Trade Disputes

Complying with SPS measures can help businesses avoid costly and time-consuming trade disputes. If a business fails to meet the SPS requirements of a country, it may face import bans or other trade restrictions, which can have a negative impact on its bottom line. But by complying with these requirements, businesses can avoid such disputes and maintain access to important markets.

This can also improve their relationships with trading partners and enhance their long-term prospects in international trade. At clearBorder, we offer the leading import export consultancy services to support your business in expanding to global markets. With our consultancy services, we can aid in mitigating trade disputes and help your business grow efficiently across borders.

Consequences of Failing to Comply with SPS Measures

Failing to do relevant customs paperwork and comply with relevant SPS measures can have serious consequences for businesses involved in international trade.

Firstly, it can lead to the rejection of goods at the border, which can result in lost sales, increased costs, and damage to a business’s reputation; in some cases, it may also result in legal action or fines.

Economic Consequences

Non-compliance with SPS measures can have a significant impact on a company’s economic situation. It can lead to reduced market access, reduced trade, and decreased foreign investment.

Additionally, if a country or business is perceived as a source of unsafe or unhealthy products, it can lead to a decline in consumer confidence and a drop in demand for exports. This can cause significant harm to economic growth and development.

Social Consequences

Non-compliance with SPS measures can also have social consequences.

Unsafe or unhealthy products can harm public health and safety, which can lead to negative social impacts. Additionally, if businesses are found to be violating SPS regulations or fail to have export health certificates, it can lead to a loss of public trust and a decline in reputation.

This process can lead to long-term damage to a business’s relationship with customers and other stakeholders.

Seamless SPS Trading Across Borders

Evidently, SPS goods and measures play a vital role in international trade. They help to ensure that products are safe and healthy for consumers, as well as protect the environment and prevent the spread of diseases and pests. By complying with SPS measures, businesses can enhance their reputation, access new markets, and avoid costly trade disputes.

However, failing to comply with SPS measures can lead to the rejection of goods at the border, trade restrictions, and damage to a business’s reputation. Therefore, it is essential for businesses to understand and comply with SPS measures to succeed in the global marketplace – and, here at clearBorder, we’re ready to help you do just that.

Our specialist consultancy services are here to offer bespoke guidance, and by deploying our specialist training modules, you’ll keep your team border-ready both now and in the future.

Simply contact us today to find out more.