Sanitary Measures Impact on US- Canada Beef Trade AGEC 630 – Agriculture, Food and Resource Policy Prof. John Henning 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 -National Animal Identification System (NAIS) repeated data entry

US Traceability System National Animal Identification System (NAIS) -US Animal Identification Plan (USAIP) – 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) – Canadian Sheep Identification Program (CSIP) – 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: 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) : 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).

US beef imports - Canada accounts for a large proportion of US beef market

Canadian beef exports

Canadian live cattle exports

-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 – accessed in April Codex Alimentarius – accessed in April Lima, R. C. A.; Barral, W. Barreiras Não-tarifárias ao Comércio: O Papel Regulatório da OMC, Controvérsias e Novas Restrições. Icone. Brazil, Prévost, D. The Japan-Apples Dispute: Implications for African Agricultural Trade. Tralac Trade Brief Agri Conference. South Africa, Roberts, D. Preliminary Assessment of the Effect of the WTO Agreement on Sanitary and Phytosanitary Tarde Regulations. Journal of International Economic Law (1998) World Trade ORganization – accessed in April World Organization for Animal Health – accessed in April US Department of Agriculture (USDA) – accesse in April