Sanitary Measures Impact on US-Canada Beef Trade

AGEC 630 – Agriculture, Food and Resource PolicyProf. John Henning

Fabrizio GalliMS-1F

Winter 2009

Outline

- Traceability systems in the US and Canada

- Sanitary measures in the context of the SPS/WTO Agreement

- Canadian beef sector exports to the US

- BSE case in 2003 US reaction under the international sanitary regulations’ perspective

US Traceability System

- 1940’s : APHIS Official enforcement X brucellosis

- Animal identification gains: producers, APHIS

- Paradox: disease eradication, participation

- Several identification systems- deficiency reasons- data incompatibility

- National Animal Identification System (NAIS)

repeated data entry

US Traceability System

National Animal Identification System (NAIS)

- US Animal Identification Plan (USAIP) – 2003

- BSE case in the same year ad hoc policy formulation?

- Trace an animal back to the herd or premises + potentially exposed animals

- Three main components

- No mandatory requirements 70% “critical mass” participation

premise registration

animal identification

animal tracing

- Canadian Food Inspection Agency (CFIA) 13 Acts

- Health of Animals Act (Health of Animals Regulation, Section 15)

- Canadian Cattle Identification Program (CCIP) – 2001

- Canadian Sheep Identification Program (CSIP) – 2004

- Main requirement: bar coded/RFID tag prior to leaving the farm

- Canadian Cattle Identification Agency (CCIA)

- Quebec Agri-Traçabilité, two eartags, date of birth inclusive

- Level of participation: Administrative Monetary Penalty System (AMPs)40% (soft enforcement) 97.5% (hard enforcement)

Traceability in Canada

M

unique identification number + distribution of eartags

Sanitary measures affecting international trade

- Non-tariff barriers in the GATT context: 1973-1979 Tokyo Multilateral Round

- Standards Code regulatory instrument X protection of human, animal and plant life and health

- Proliferation of technical measures affecting agriculture

- Punta Del Este Ministerial Agreement agenda for Uruguay Round (1986)

- 1994: WTO integrated system

- Technical Barriers to Trade (TBT) Agreement

- Agreement on the Application of Sanitary and Phytosanitary (SPS) Measures

Sanitary measures affecting international trade

- sovereign right of members to protect human, animal and plant life or health

- central debate: lack of legitimate health concern impediment to trade

- distinguish real SPS threats from disguised protectionism

- role of science in the determination of SPS measures

- International standards from the World Organization for Animal Health (OIE), Codex Alimentarius and International Plant Protection Convention (IPPC).

SPS/WTO Agreement

Sanitary measures affecting international trade

- OIE science oriented expertise on animal disease control

disease status of a country free areas with vaccination and no vaccination

- Codex Alimentarius: food standards to protect consumers- Article 2: despite encouragement to adopt OIE/Codex standards,

appropriate level of protection scientific justification- Article 3: Harmonization- Articles 5.1, 5.2 and 5.3 risk assessment analysis- Transparency of the agreement: notification of SPS measures

- justification of the measure

- identification of product subject to such measure

- enquiry points

- Article 6: Regionalization SPS Committee meetings

SPS/WTO Agreement

Canadian beef sector

- Significant share of total production: exports 37% (2008).

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- Canada accounts for a large proportion of US beef market

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Canadian live cattle exports

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- Canadian beef sector: economic losses from BSE case and US response.

- US imports of beef, bovine products and live cattle from Canada estimated in $ 1.2 billion (2002).

- Import permit system established by APHIS- boneless beef products from cattle less than 30 months of age

- Canadian animals ineligible to US market (120,000/month)

- Increase in cattle inventories X slaughter capacity limited

- US beef importers: possible restrictions on US beef

- Final argument: conformity of trade measures with international sanitary regulations + cost benefit analysis.

SPS measures resulting from BSE outbreak

References:

1- Analysis on US beef trade with other countries

2- Beef prices on US domestic market

3- Government reaction to possible lobby pressure from interest groups within the US beef sector

Suggestions for further analysis

- Canadian Food Inspection Agency – www.inspection.gc.ca, accessed in April 2009.- Codex Alimentarius – www.codexalimentarius.net, accessed in April 2009.

- Lima, R. C. A.; Barral, W. Barreiras Não-tarifárias ao Comércio: O Papel Regulatório da OMC, Controvérsias e Novas Restrições. Icone. Brazil, 2008.

- Prévost, D. The Japan-Apples Dispute: Implications for African Agricultural Trade. Tralac Trade Brief Agri Conference. South Africa, 2004.

- Roberts, D. Preliminary Assessment of the Effect of the WTO Agreement on Sanitary and Phytosanitary Tarde Regulations. Journal of International Economic Law (1998) 377-405.

- World Trade ORganization – www.wto.org, accessed in April 2009.

-World Organization for Animal Health – www.oie.org, accessed in April 2009.

- US Department of Agriculture (USDA) – www.usda.gov, accesse in April 2009.