Grade A Dairy Equivalence National Conference of Interstate Milk Shippers May 13, 2017 Ted Elkin Deputy Director for Regulatory Affairs Center for Food Safety and Applied Nutrition Office of Foods & Veterinary Medicine U.S. Food and Drug Administration

What is Equivalence? Equivalence is a tool established in trade law (Article 4 of the SPS Agreement) for determining that two food safety systems, though different, provide the same level of public health protection. The Codex Alimentarius Commission has published guidelines (2003) on the application of equivalence in comparing food inspection and certification systems. www.fda.gov

What is Equivalence? Undertaking equivalence assessments is an obligation of the United States as a signatory to the SPS Agreement. The U.S. must conduct assessments (pre- determinational) of EU food safety systems under the Veterinary Equivalency Agreement (VEA). It is important to note that the obligation is to conduct a consultation, not to determine equivalence is achieved. Failure to meet this obligation exposes the U.S. to potential dispute resolution action, including possible trade sanctions, in the WTO.

Equivalence and U.S. Law The Uruguay Round Agreements Act of 1994 (19 U.S.C. §2578a) establishes the relationship between the SPS Agreement and U.S. law. The URAA provides Federal agencies with authority to implement the regulations necessary to comply with U.S. treaty obligations under the SPS Agreement.

Equivalence and the Pasteurized Milk Ordinance (PMO) Grade “A” milk/milk products regulated through the provisions of the PMO and include, but are not limited to, all milk and milk products with a standard of identity provided for in 21 CFR Part 131. These include: milk, acidified milk, cultured milk, concentrated milk, nonfat dry milk, evaporated milk, dry whole milk, cream, half and half, and yogurt.

Equivalence and the Pasteurized Milk Ordinance (PMO) The PMO permits the importation of Grade “A” milk/milk products only when a foreign country’s food controls system is determined to be in compliance with or equivalent to the provisions of the PMO. FDA’s Cooperative Agreement with NCIMS recognizes that FDA has the responsibility for assessing the equivalence of foreign milk safety systems. FDA will consult with the NCIMS executive board before finalizing any Grade “A” dairy equivalence determination.

Equivalence Evaluation Process Codex guidelines recommend assessing the equivalence of sanitary measures in the following areas: Infrastructure, including the legal basis for setting and enforcing food safety standards, administrative and laboratory support, and compliance mechanisms; Program design, implementation, and monitoring; including enforcement criteria, inspection protocols, and audit/review mechanisms; and Requirements for individual facilities, equipment, processes, including product sampling and analytical methods.

Equivalence Evaluation Process The steps involved in a Grade “A” dairy equivalence assessment include: Review of the foreign milk safety program against the PMO dairy matrices (i.e. comparison tables) by a technical team; On-site audits of laboratories, farms, and processors; Determine whether equivalence is sufficiently demonstrated by the foreign system; and If equivalence is determined, solicit public comment on proposed determination, draft and implement a framework agreement.

Equivalence Evaluation Process Five FDA matrices incorporating PMO requirements: Milk plants; Dairy Farms/Raw Milk Transportation and Sampling; Animal Health Laws; Laboratory Support Services; Animal Drug Testing and Residue Requirements for Dairy Animals and Milk/Milk Products

Equivalence Requests Several countries have requested equivalence determinations from FDA for Grade “A” milk/milk products: Canada New Zealand Several European Union Member States (Bulgaria, the Czech Republic, France, Germany, Ireland, the Netherlands, Sweden, and the United Kingdom)

Status of Equivalence Assessments Canada: Assessment placed on hold at Canada’s request pending the implementation of the Safe Food for Canadians Act New Zealand: Technical work, including on-site audit, complete; final report being prepared for internal clearance and briefing to NCIMS executive board. Administrative procedure remains.

Status of Equivalence Assessments European Union: EU assessment in early stage. PMO assessments and on-site audits conducted for Ireland, France, and the Netherlands. Reports being developed for agency clearance and transmittal to European Commission. If FDA finds equivalence, administrative actions remain, including NCIMS consultation, public comment, and formalization of equivalence agreement. Important note: the EC has identified U.S. restrictions on the import of “fluid or poured” dairy products as a non-tariff trade barrier and has raised the issue as a trade concern in the WTO SPS Committee.

Considerations FDA appreciates the U.S. industry’s clear interest in Grade “A” dairy equivalence determinations. We have met with dairy industry representatives to discuss their interests and will take those into account. FDA’s role, consistent with U.S. obligations under the SPS Agreement, is to make an equivalence determination based on technical findings that a foreign food safety system satisfies the U.S. level of protection.

Next Steps Communications: consultation with NCIMS executive board on any equivalence determination; outreach to membership. Public Notice: Trade law requires that the FDA provide an opportunity for public comment on the equivalence determination. An Equivalence Agreement: Either an MOU or an agreement containing the understandings reached by the parties.

Questions? Thank you