Transcript Document

The Use of Technical Barriers to Trade
in Response to Increased Competition
in North American Agriculture
Prepared for the Organized Symposium:
North American Free Trade and Responses to
Increased Competition: A Look at Trade Disputes
and Technical Barriers to Trade
AAEA Annual Meetings
Montreal, Canada
July 28, 2003
Parr Rosson and Flynn Adcock
Texas A&M University
Overview
• Types of Technical Barriers to Trade
• Increased Competition Created by
NAFTA Trade
• Uses of TBTs in Response to Increased
Competition
Technical Barriers to Trade
• WTO Definition: Technical Regulations are
documents which lay down product
characteristics or their related processes and
production methods with which compliance
is mandatory
• Includes administrative provisions
• Includes terminology, symbols, packaging,
marking or labeling requirements
NAFTA SPS Agreement
• Designed to Prevent Use of SPS Measures
•
•
•
•
as Disguised Restrictions to Trade
SPS Measures Must be Based on
Scientific Principles and Include a Risk
Assessment
Measures Cannot Restrict Trade Beyond
a Country’s Chosen Level of Protection
Does Not Allow Unfair Discrimination
Does Allow Protection of Human, Animal
or Plant Life and Health
Increased Competition Created
by NAFTA
• Agricultural Trade among NAFTA
has More than Doubled since 1989
• U.S. NAFTA Exports Grew from
$5.0 Billion to $16.0 Billion
• U.S. NAFTA Imports Grew from
$5.2 Billion to $15.8 Billion
• Increased Trade in Grains, Animal
Products, Fruits, and Vegetables
U.S. Exports of Grain to Mexico, 1993-2002
Million Metric Tons
Corn
6.3
Sorghum
Wheat
5.6
6
5.2
5.1
5.1
5.3
5.0
4.7
5
4.2
4.0
4
3.6
3.4
3.1
3.2
2.9
3
2.1
1.0
0.3
0.3
0.6
0.3
2.6
2.1
2.0
1.6
2
1
Rice
2.3
2.1
1.8
1.6
1.7
1.1
0.8
0.3
0.4
0.4
0.4
0.4
0.6
0.5
0
1993
1994
1995
Source: USDA/FAS
1996
1997
1998
1999
2000
2001
2002
0.7
U.S. Exports of Fruits to Mexico, 1993-2002
Thousand Metric Tons
Apples
250.0
Grapes
Peaches
209.3
184.6
200.0
153.0
141.7
132.1
150.0
108.4
100.0
81.2
74.3
87.8
68.9
46.8
40.1
50.0
9.0 6.3
24.4
16.2
11.211.7
10.98.8
23.9
16.2
24.0
15.3
35.4
30.9
10.9
15.5
17.6
0.0
1993
1994
Source: USDA/FAS
1995
1996
1997
1998
1999
2000
2001
2002
15.9
U.S. Imports of Avocados and Cantaloupes
from Mexico, 1993-2002
Thousand Metric Tons
Cantaloupes
250.0
Avocados
197.0
200.0
146.1
152.2
154.2
136.0
150.0
103.9
102.0
100.0
68.3
66.8
58.7
27.2
50.0
0.5
1.8
0.7
0.6
11.9
9.3
4.1
13.1
12.9
0.0
1993
1994
Source: USDA/FAS
1995
1996
1997
1998
1999
2000
2001
2002
Reactions to Increased Import
Competition
• Technical Barriers to Trade
Labeling
SPS Measures
Food Safety Standards
Licensing Regimes
• AD/CVD Cases – Not Discussed Here
TBTs and Grain Trade
• U.S. Sorghum Exports to Mexico Average
3.4 MMT per Year Since 1989
• In 1996, Mexico Slowed Issuance of
Sorghum Import Permits
• Lowest U.S. Sorghum Exports for the
Period Resulted - 1.97 MMT
• Issue Resolved and Exports Reached
Highest Level Ever in 2001 – 5.01 MMT
TBTs and Grain Trade
• U.S. Corn Exports to Mexico Averaged 3.7
MMT since 1989, 4.6 MMT since NAFTA
• Mexican Corn TRQ Allows for Slightly
More than 3 MMT – U.S. Exports Almost
Double Since 1996
• Distribution of Quota Via Cupos Politically
Sensitive, but No New TBTs Recently
• Mexico Delayed Release of Rail Cars
Containing U.S. Paddy Rice for a Month
During Late 1998
TBTs and Fruit and Vegetable Trade
• U.S. Exports of Apples, Grapes, and Peaches to
Mexico Growing Since 1995
• Apples: In 1998, Mexico Filed Labor NonCompliance Complaint and Washington State
Apple Shippers Balked at Mexican Inspection
Process
• U.S. Apple Exports Stopped During October 1998,
But Have Grown Since
• Grapes: Mexico Began Requiring COOL in
Spanish in 1997 – Industries Working Together
• Peaches: One Oriental Fruit Moth Caused
Declines in U.S. Peach Exports from 1998-99
TBTs and Fruit and Vegetable Trade
• Long Standing Phytosanitary Issues
Regarding U.S. Avocado Imports from
Mexico
• Mexico Gained Partial U.S. Market Access
in 1997 – Now Negotiating for Longer Time
Period and More States – CA not Supportive
• FDA Banned Imports of Mexican
Cantaloupes in October 2002 Until
Certification of Sanitary Production
Conditions
• Several Mexican Producers Have Met the
New Requirement
Other NAFTA TBT Issues
• Timing of Mexican Import Permit Auctions for Dry
Beans Has Slowed U.S. Exports Since 1999
• Phytosanitary Issues & Under Invoicing by
Exporters Noted As Problems by Mexico
• Canadian Issues Regarding Pseudorabies in
Slaughter Swine from Certain U.S. States –
Corrective Regulations Considered Overly
Burdensome
• Avian Influenza (1999) and Exotic Newcastle
Disease (2003) Affecting U.S. Poultry Meat Exports
to Mexico
• Recent BSE Situation with Canadian Cattle
Country of Origin Labeling
• States that Certain Fresh/Frozen Fruits,
Vegetables, Meats, and Seafood Sold at
Retail Level Must be Labeled by Country of
Origin
• Supporters Say “Consumers have a right to
know” and that COOL Will Assist in
Addressing Food-borne Illness Outbreaks
• Opponents Think it is Too Costly and that it
is Nothing but a Protectionist Measure
• COOL Implementation May Lead to WTO
Compliant
• Complete Implementation not Assured
U.S. Imports of Live Cattle from Canada and
Mexico and Beef from Canada,1993 - 2002
1,000 Head/1,000 MT
CN Cattle
2000
MX Cattle
CN Beef
1687
1653
1509
1500
1377
1313
1297
1306
1223
1202
1072
1133
1130
1010
985960
965
1000
816
720
669
456
500
178
155
177
306
273
234
345
389
356
335
0
1993
1994
Source: USDA/FAS
1995
1996
1997
1998
1999
2000
2001
2002
U.S. Imports of Fruits and Vegetables from
Mexico and Canada, 1993 - 2002
Thousand Metric Tons
MX Veg
3000
MX Fruit
CN Veg
2269
2500
2103
2096
2137
2267
2388
2086
1816
2000
1382
1392
1500
1000
688
481
477
515
818
642
787
776
769
500
0
1993
Sourec: USDA/FAS
1997
2002
876
Summary and Conclusions
• Increased North American Agricultural Trade Has
Led to Increased Competition
• TBT’s Have Been One Way Countries Attempt to
Protect Industries from Competitive Pressures
• While Important to Maintain Animal and Plant
Health, SPS Measures Can be Used as TBT
• Licenses and Other Administrative Measures Also
Increase Cost and Reduce Pace of Trade
Summary and Conclusions
• Border Procedures Such as Inspection
Practices and Timeliness of Administrative
Processes Can Negatively Impact Trade
Flows
• Country-of-Origin and Other Labeling
(Nutrition, GMO) Can be Used as a Trade
Barrier
• As Tariffs Continue to Decline, Use of NonTariff Barriers, Including TBTs, Will
Likely Increase