Transcript US-Canada Trade Impact of SPS Measures Aiming to Protect

AGEC 630 – Agriculture, Food and Resource Policy
Prof. John Henning
Sanitary Measures Impact on USCanada Beef Trade
Fabrizio Galli
MS-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
repeated data entry
- National Animal Identification System (NAIS)
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
premise registration
animal identification
animal tracing
- No mandatory requirements  70% “critical mass”
participation
Traceability in Canada
- Canadian Food Inspection Agency (CFIA)  13 Acts
- Health of Animals Act (Health of Animals Regulation, Section 15)
- Canadian Cattle Identification Program (CCIP) – 2001
M
- Canadian Sheep Identification Program (CSIP) – 2004
- Main requirement: bar coded/RFID tag prior to leaving the farm
- Canadian Cattle Identification Agency (CCIA)
unique identification number + distribution of eartags
- Quebec  Agri-Traçabilité, two eartags, date of birth inclusive
- Level of participation: Administrative Monetary Penalty System (AMPs)
40% (soft enforcement)  97.5% (hard enforcement)
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
SPS/WTO Agreement
-
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).
Sanitary measures affecting international trade
SPS/WTO Agreement
science oriented  expertise on animal disease control
disease status of a country  free areas with vaccination and no
vaccination
-
OIE
-
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
Canadian beef sector
- Significant share of total production: exports 37% (2008).
Exports as a percentage of production
60%
50%
40%
30%
20%
10%
0%
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
US beef imports
- Canada accounts for a large proportion of US beef market
Carcass weight, pounds
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Australia
Canada
New Zealand
Brazil
Canadian beef exports
700
600
1,000 MT CWE
500
400
300
200
100
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Canadian live cattle exports
1,800
1,600
1,400
1,000 HEAD
1,200
1,000
800
600
400
200
0
1998 1999 2000 2001
2002 2003 2004
2005 2006 2007 2008
SPS measures resulting from BSE outbreak
-
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.
Suggestions for further analysis
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
References:
- 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.