India’s Spices Trade.

India’s Spices Trade
SPS Barriers from EU/UAE – with special
reference to pesticide MRLs
Ganesan. S
E-mail : ganesanicc@gmail.com
1

What is Pesticide MRL?
Pesticide Residues: Traces of
pesticides in or on the agricultural
commodities at the time of harvest.
Maximum Residue Limit (MRL) is the
maximum acceptable level of a pesticide
that is legally tolerated in food and
agricultural products when they are
traded. It is often measured and
expressed in terms of parts per million
(ppm or mg/kg).
MRL is not a toxicological safety
standard, but only a trading standard.
MRLs widely vary among countries for a
given pesticide/crop.
In the EU, the MRL can be as low as 0.01
ppm. This equals 1 gm per 100 tons of
rice or any other agri. commodity. At this
insignificant level, a pesticide would not be
toxicologically, biologically or
environmentally relevant.
Agricultural commodities that comply with
national use/MRLs may be non-compliant
while entering the EU when 0.01 ppm is
applied.
2

Understanding the legal force behind the MRLs
The Agreement on
the Application of
Sanitary and
Phytosanitary
Measures (the SPS
Agreement) entered into
force with the
establishment of the
World Trade Organization
(WTO) on 1 st Jan 1995.
Its provisions are legally
binding on all countries
that are members of the
WTO.
The SPS agreement covers
both sanitary (human
and animal health)
and phytosanitary (plant
health) measures.
The SPS measures are
applicable to food
products of plant and
animal origin whether
domestically produced or
imported.
The SPS Agreement
allows WTO member
countries to set their
own SPS standards.
But they must be based
on risk assessment and
supported by sufficient
scientific evidence.
WTO members can
also apply the
“precautionary
principle”, temporarily
(Article 5.7) to deal
with scientific
uncertainty. This can
only be temporary.
All these would help
understanding the
varying levels of MRLs
among the countries for
a given pesticide and
agri. commodity/food.
Non-harmonized MRLs
and regulatory
heterogeneity are a
global issue.
An unpleasant truth - The MRLs can at times be politically/commercially
driven to deliberately impede the trade.
3

Divergence in MRLs and consequent
compliance difficulties
“
Greater fragmentation and
divergence in MRL policies
around the world coupled
with evolving technological
capacity that increases
testing precision, often
translates into elevated
costs and market impacts
throughout the agricultural
supply chain.
”
- United States International Trade
Commission in Global Economic
Impact of Missing and Low pesticide
Maximum Residue Levels, 2021
The United States International Trade Commission
has published two volumes (>600 pages) on the
negative impacts of low MRLs on trade. 4

2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
India’s Spices production, export and import.
What do the data show?
India’s Spices Production
India's Spices Export
India's Spices Import
5.7 5.9 6.1 7.0
8.1 8.1
9.5
11.1 10.9
10.3
0.9 0.9 0.9 0.8
1.0 1.1 1.1 1.2 1.6
1.4
0.24 0.23 0.22
0.18 0.19
0.16 0.16
0.32 0.34 0.33
Source: Indiastat and APEDA (Accessed on 9 th November 2022)
Unit: mn tons
❑ India’s spices production has grown 91% since 2012-13.
❑ During this period India’s export increased by 56% whereas import increased by 83%.
❑ Share of export in India’s spices production has decreased from 16% in 2012-13 to 13% now.
5

India’s Spices Trade (Value)
2012-13
2021-22
Export
$2.79 bn
85%
Import
$0.50 bn
15%
Export
$3.93 bn
77%
Import
$1.18 bn
23%
India’s Total Spices Trade: $3.29 bn
India’s Total Spices Trade: $5.11 bn
Source: APEDA (Accessed on 14 th November 2022)
Our export requires acceleration.
6

Top 10 Buyers of India’s Spices (2021-22)
Rank
Country
Source: APEDA (Accessed on 9 th November 2022)
Spices Export Quantity
(tons)
Top 4 countries account for 50% of our spices export.
The share of EU in India’s Spices export is only 4%.
Share
1 China 300,319 21%
2 Bangladesh 234,151 16%
3 USA 102,587 7%
4 UAE 81,095 6%
5 Nepal 67,485 5%
6 Malaysia 62,888 4%
7 Sri Lanka 61,250 4%
8 Thailand 48,918 3%
9 Indonesia 45,174 3%
10 UK 30,372 2%
India’s Total Spices Export 1,424,828
… Contd.
7

EU’s share in India’s Spices export
Non-EU
1,364,926
96%
EU
59,902
4%
India’s Total Spices Export: 1,424,828 tons (1.4 mn tons)
Source: APEDA (Accessed on 9 th November 2022)
Year: 2021-22
Unit: Tons
❑ EU is a minor market for spices in general and for Indian spices in particular.
❑ Is there any scientific rationale for EU MRLs for spices to be less than that of CODEX/India?
8

No. of SPS Notifications from EU-RASFF (1981-2020)
All Countries . All Products . All Causes.
s
❑ Pathogenic micro-organisms and
mycotoxins remain the top two largest
causes for rejections (totally 36%).
❑ Pesticides residues ranks third (10%).
RASFF: Rapid Alert System for Food and Feed. It
is a notification system followed by the European
Commission for food safety issues within the EU.
Source : Notification on Pesticides Residues in the Rapid Alert System for
Food and Feed (RASFF) – 2022, by Marcin Piglowski.
Link:file:///C:/Users/20000294/Desktop/Notificaiton%20on%2
0Pesticide%20Residues%20in%20the%20Rapid%20Alert%20Sys
tem%20for%20Food%20and%20Feed.pdf
9

1
0
1
2
2
2
2
0
1
1
0
1
1
3
0
0
1
2
30
43
82
206
65
83
93
123
234
264
255
402
517
754
724
701
634
363
446
1253
Number of Notifications on Pesticides MRL violations from
the EU (1981-2021) All Countries. All Products.
Number of Notifications
401
414
1159
Source : Notification on Pesticides Residues in the Rapid Alert System for Food and Feed (RASFF) – 2022 from 1981 to 2020, by Marcin Piglowski; data for 2021 extracted from RASFF on 30 July 2022.
Link: file:///C:/Users/20000294/Desktop/Notificaiton%20on%20Pesticide%20Residues%20in%20the%20Rapid%20Alert%20System%20for%20Food%20and%20Feed.pdf
Note the spurt in notifications involving pesticide MRL violations in recent years.
MRLs are “science coated” trade barriers!
10

Number of Indian spices consignments rejected by EU
40
43
1 1
3
2018 2019 2020 2021 2022 (till 1st Nov)
Source : RASFF Database (Accessed on 9 th November 2022)
Out of 43 consignments rejected due to pesticide residues, 27 (67%) consignments
were rejected applying MRL @ 0.01 ppm.
11

This is how China levels the playing field under WTO-SPS Agreement !
❑ Evian is a globally popular mineral water sourced
from French Alps.
❑ This is an excellent example that shows how an
assertive developing country can hit back;
legitimately using the provisions of WTO-SPS
Agreement.
❑ Many developing countries hesitate to take the
developed countries head-on under the SPS
Agreement. This must change.
“118 tons of Evian mineral water has been seized and
impounded by Chinese Health Inspectors because it contained
excessive amounts of bacteria.”
Link: https://consumerist.com/2007/05/30/evian-water-rejected-by-china-for-containingexcessive-amounts-of-bacteria/
❑ On an average 740 food shipments per year from EU
were returned/rejected by China between 2013-19
citing SPS violations! The EU receives the maximum
rejections from China! (source : USDA)
❑ Quid Pro Quo levels the playing field in the era of
WTO. Our FSSAI must begin to assert.
12

USA’s criticism against EU's Sanitary and Phytosanitary (SPS) barriers
“The United States remain concerned about a number of measures
the EU maintains ostensibly for the purpose of food safety.
Specifically, the US is concerned that these measures unnecessarily
restrict trade without furthering their safety objectives because they
are not based on scientific principles, are maintained without
sufficient scientific evidence, or are applied beyond the extent
necessary. “
Ref : 2021 Foreign Trade Barriers, p.192 published by USTR
Other governments including India must be equally assertive in voicing their
opposition to the EU’s unscientific and WTO inconsistent SPS measures
involving pesticide residues.
13

Understanding EU MRLs for Pesticides.
The EU maintains uniform tolerance/MRL of 0.01 ppm for all pesticides that are not registered for use
in the EU countries.
In the EU, MRLs are set for more than 1300 pesticides covering 378 food products.
Of this, a default MRL of 0.01 ppm (0.01 mg/kg) applies to as many as 690 pesticides.
In other words, for over 50% of the pesticides the EU applies 0.01 mg/kg as default MRL.
0.01 mg/kg = 1 gm for every 100 tons.
At this trace level (1 gm in 100 tons), a pesticide residue would not be biologically,
toxicologically and environmentally relevant.
When tested at this level (0.01 ppm), some pesticides not used in the EU would certainly show up in
some consignments.
0.01 ppm MRL is as good as zero MRL/tolerance. It acts as a strong non-tariff barrier to our
agricultural exports.
14

Technical/Legal problems with 0.01 MRL
The 0.01 ppm MRL is the Limit of Quantification (LOQ) during laboratory analysis.
LOQ is the smallest amount or concentration of a substance that can be detected and measured
(using Gas Chromatography)
The EU MRL of 0.01 which is at LOQ is as good as zero tolerance.
This effectively means import tolerances are not currently in place for pesticides not registered
for use in the EU.
The EU MRLs (Maximum Residue Levels) should be rechristened as ZRLs (Zero Residue Levels).
Questions:
1. Is ZRL “based on” the international standards developed by JMPR/CODEX, a requirement
under Article 5 of SPS Agreement?
2. Does ZRL demonstrate the existence of the relevant risk arising from the presence of 0.01
ppm of residues in agricultural commodities? Remember, this is a sine quo non as
determined by WTO-Appellete Body in the EC-Hormones Dispute.
15

Can the UAE adopt the EU pesticide MRL of 0.01 ppm ?
NO!
India and UAE are bound by the provisions of Comprehensive Economic Partnership Agreement
(CEPA). This free trade agreement entered into force on 1 st May 2022.
Chapter 4 of the CEPA states while facilitating the trade, the Parties are to:
- reinforce the SPS Agreement
- ensure that the SPS measures implemented do not create unjustified barriers to trade
- encourage adoption of science based international standards and their implementation
- affirm their rights and obligations under the SPS Agreement
The import tolerance MRL of 0.01 ppm is not based on product specific
requirement under Article 5.1 of the SPS Agreement. It is hazard based.
risk assessment, a
16

The 0.01 ppm MRL and its inconsistencies with SPS Agreement
Article 1.1 of the SPS Agreement, because it is a sanitary measure under the SPS Agreement that is
not "applied in accordance with the provisions of this Agreement";
Article 2.1 of the SPS Agreement because it is inconsistent with the provisions of this Agreement;
Article 2.2 of the SPS Agreement, because it is not based on scientific principles, it is maintained
without sufficient scientific evidence, and it is not applied only to the extent necessary to protect ...
human life or health;
Article 2.4 of the SPS Agreement because it doesn’t conform to the relevant provisions of this
Agreement and [therefore] shall not be presumed to be in accordance with the Members obligations
under the provisions GATT 1994…. in particular the provisions of Article XX(b);
Article 3.1 of the SPS Agreement, because to the EU has failed to base its measure on the existing
international standards, guidelines or recommendations where they exist [that of CODEX];
17

Contd…
Article 3.2 of the SPS Agreement because it doesn’t conform to the international standards [therefore] shall
not be deemed to be necessary;
Article 3.3 of the SPS Agreement because it does not provide scientific justification to deviate from the
existing international standards.
Articles 5.1, 5.2 and 5.3 of the SPS Agreement, because it is not based on an assessment, as appropriate to
the circumstances, of the risks to human life or health and does not take into account the factors listed in
Articles 5.2 and 5.3 of the SPS Agreement;
Article 5.4 of the SPS Agreement, because when determining the appropriate SPS measures the EU fails to
take into account the objective of minimizing the negative trade effects
Article 5.5 of the SPS Agreement, because the EU makes arbitrary or unjustifiable distinctions in the levels it
considers appropriate and such distinctions result in discrimination or a disguised restriction on international
trade in different situations;
18

Contd…
Article 5.6 of the SPS Agreement, because the EU's measure is more trade-restrictive than required
and fails to take into account technical and economic feasibility;
Article 5. 7 of the SPS Agreement because the EU measure is not a provisional one;
Article 10.1 of the SPS Agreement because the EU has not taken into account the special needs of
developing country Members;
Article XX(b) of the GATT 1994 because the EU SPS measures requiring 0.01 ppm MRLs are
applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination
between countries where the same conditions prevail, or a disguised restriction on international trade.
Therefore, it is not justified under the exception in the Article XX.
Besides, it cannot be considered to be “necessary” within the meaning of Article XX.
19

EU violates the core principles of WTO
“Non-Discrimination” and “National Treatment” are the two inviolable principles of WTO.
Principle of non-discrimination: The WTO members can neither discriminate between their trading partners nor between imported
and locally produced goods that are otherwise “like” (similar) products.
Principle of national treatment: This requires that imported and locally produced goods should be treated equally by WTO members
in terms of competitive opportunities in the domestic market of the importing country.
In the year 2013, the EU prohibited the use and sale of seeds treated with plant protection products containing Imidacloprid, an
insecticide. 1
The import tolerance for Imidacloprid was lowered to 0.01 ppm in the EU since 26 th October 2021. 2
However, afterwards between 26 th October 2021 till 12 th August 2022, as many as 13 emergency authorizations EAs) were issued for
use of Imidacloprid for seed treatment in the EU countries with MRL of 0.5 ppm. The EU internal/domestic market MRL was 50 times
higher than the import tolerance for the same pesticide.
This violates the principles of “Non-Discrimination” and “National Treatment” of the WTO. Parallelly, it also violates Article 2.3 of
the SPS Agreement (arbitrary and unjustifiable discrimination between members).
1
Notification to WTO from the European Commission - G/SPS/N/EU/39 dated 1 March 2013. 2
European Commission Regulation - (EU) 2021/1881 dated 26 October 2021
and European Commission notification to WTO bearing No G/SPS/N/EU/474/Add1 dated 23 rd Nov 2021. 3 CENTEGRO’s letter dated 19 th Oct 2022 sent to the Ambassador,
Delegation of EU in Delhi.
20

Risk Assessment Under Article 5 of SPS Agreement
“Theoretical uncertainty is not the kind of risk to be assessed under Article 5.1”
- Appellate Body Report in EC- Hormones, para 186
It is essential to bear in mind that the risk that is to be evaluated in a risk assessment under Article 5.1
is not only risk ascertainable in a science laboratory operating under strictly controlled conditions, but
also risk in human societies as they actually exist, in other words, the actual potential for adverse
effects on human health in the real world where people live and work and die.
- Appellate Body Report in EC- Hormones, para 187
The Appellate Body stressed that the risk to be assessed must be specific to the substance as used in a specific manner
and specific purpose.
This means the risk of presence of 0.01 ppm level of pesticide residues must be established .Further, the risk from 0.01
ppm residues must be an ascertainable risk in the real world where people live, and not merely in a scientific laboratory.
The EU/UAE must be asked to produce ascertainable risk/s from 0.01 ppm residue levels for each
pesticide to sustain the 0.01 ppm MRL under Article 5 of the SPS Agreement.
21

EU pesticides MRL constantly undergoes changes.
Revisions notified in the last 6 weeks (21 st July 2022 till 30 st August 2022)
Date of notification No of pesticides involved Major crops covered
21 st July 1
25 th July 6
29 th July 18
2 nd August 7
5 th August 10
18 th August 4
30 th August 4
Total 50
Link: https://news.coleacp.org/en/eu-and-gb-mrl-changes-in-2022-july-september-2022/
❑ 50 changes in just 42 days!
❑ It is a herculean task to constantly monitor the ever changing MRLs
for possible compliance.
Rice, Wheat, Sesame seeds,
Peas, Pulses, Spices, Tea,
Coffee, Potato, Banana,
Mango, Papaya, Citrus,
Melons, Tomato,
Cauliflower etc.
The EU MRLs
change as
frequently as
the clouds in
the sky !
22

Pesticides consumption and Agricultural production
India and EU
Pesticide Consumption (Tons)
Agricultural Output ($ bn)
3,54,583
3,33,356
3,45,970
EU
India
433
474 486
257 250 253
59,669 61,701 62,193
2018 2019 2020
2018 2019 2020
Source: Eurostat, Directorate of Plant Protection, Quarantine & Storage and World Bank (Accessed on 8 th August 2022)
❑ The EU uses more pesticides both in variety and volume.
❑ The EU countries use 5 times more pesticides than India. Yet their agriculture output is just half of India’s.
❑ Import of food products (including chocolates and wines) from the EU should be carrying residues of
pesticides not registered/allowed in India. Do we check them for unacceptable pesticide residues and
send notifications? 23

Final Word
The default MRL of 0.01 ppm for most pesticides applied by EU/UAE/other Gulf countries is a
significant Non-Tariff Barrier (NTB) to access their market.
Application of 0.01 MRL by the UAE amounts to breaching the provisions in Chapter 4 of CEPA.
The SPS measure stipulating pesticide MRL of 0.01 ppm amounts to abuse of the exception
granted under GATT XX(b) and is inconsistent with several substantive obligations of the SPS
Agreement.
Rejection of exported consignments applying the WTO inconsistent MRL of 0.01 ppm produces
serious consequences on spices production, export, price and farmers.
India must lodge formal complaint before SPS Committee leading to dispute settlement.
24

Your questions and suggestions welcome
THANK YOU
Ganesan. S
ganesanicc@gmail.com
info@centegro.org
Kanta Niwas, Madhu Park, 11 th Road,
Khar (W), Mumbai – 400052. INDIA.
W: www.indianagriculturalfacts.com
Centre for Environment & Agriculture (CENTEGRO) is a Mumbai based think tank.
We actively work, among others, on matters that concern agriculture, trade, economy, health and environment.
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