1. The Foreign Agricultural Service’s Role in Addressing MRL-Related Trade Issues
Julie Chao, Senior Technical Advisor
USDA Foreign Agricultural Service
Office of Agreements and Scientific Affairs
Plant Division
March 5, 2018
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2. A few words on agriculture and trade:
Exports are a key driver of economic growth for U.S. agriculture and rural America. Trade helps to create markets for U.S. agricultural products, and has multiplier effects that generate additional jobs and investment that foster economic growth in both the rural and non-farm economies.
2016 exports were $135 billion, 2017 were $138 billion.
Source: USDA FAS
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3. The U.S. has an agricultural surplus, meaning that we produce more than we as a nation consume.
We export more than 20% of our overall agricultural production, and for some commodities (cotton, tree nuts) more than 70% of U.S. production is destined for export markets.
Not surprisingly, we are the world’s top exporter of food and agricultural products.
Source: USDA FAS
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4. Modern crop protection tools and trade are
At the same time, 11% of the world’s population lacks food security…that’s nearly 800 million people who do not have reliable access to an affordable, safe, nutritious food supply.
The current population is 7.5 billion, and is expected to reach 9.7 billion in 2050.
With current population growth and changes in food preferences, it is expected that food demand will rise significantly—particularly in net-food-importing countries. At the same time, certain regions around the globe are facing potential reductions in agricultural yields due to climate change.
Agricultural trade is critical to addressing food security.
Modern crop protection tools and trade are
critical to achieving global food security
Source: USDA FAS
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5. Given the importance of agricultural trade to economic growth and global food security, how do we: Grow more? Waste less? Move it around better?
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6. Top Agricultural Export Markets
U.S. agricultural products are exported to countries all over the world. Here is a look at the top export markets in 2016.
As you can see, our top markets include both highly developed economies (Canada, Japan, EU) and emerging economies (China, Mexico, Korea).
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7. Growing Markets
Some of our fastest growing markets are also emerging economies in Central and South America and Southeast Asia.
In all of these markets, though—whether we are talking about developed or emerging economies—one of the increasing challenges that growers and exporters face today is ensuring that these markets remain accessible, and free from trade disruptions that can be caused by pesticide maximum residue limit (MRL) violations.
Source: USDA FAS
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8. International MRL Standards
National MRL Regime
Codex MRL Standard
With this growth in international food supply chains, we are seeing regulatory frameworks evolving around the world.
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9. International MRL Standards
Inability of Codex to keep pace with global demand for MRLs
Public concern about food safety
Codex MRL Standard
National MRL Regime
Due to increased awareness/concern about food safety issues among consumers and regulators, many countries are taking a greater interest in establishing and monitoring pesticide MRLs.
As new crop protection tools have become available, Codex has struggled to keep up with the pace of innovation and establish a sufficient number of MRLs. Some countries are starting to diverge from Codex deferral policies in favor of national MRL standards.
(National MRLs, Codex MRLs, deferral systems, default MRLs)
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10. International MRL Standards
Inability of Codex to keep pace with global demand for MRLs
Erosion of consumer confidence
Public concern about food safety
Codex MRL Standard
Political pressure on governments to regulate food supply
National MRL Regime
With this evolution of different regulatory systems, we see a significant increase in the number of MRLs being established around the world, but these MRLs are not always harmonized.
As a result, the international MRL landscape is becoming increasingly complex, making it challenging to produce food for the export market
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11. MRL Disharmonization
There are many reasons why MRLs end up being set at different.
Some are technical or policy-related—differences in consumption patterns, different GAPs, determination of the residue definition, deterministic vs. probabilistic exposure estimates, different methods for assessing risk.
The lack of MRLs in a given market may also be driven by economic incentives (or rather the lack of economic incentives to establish MRLs in export markets or high costs of data development)
While some MRL-related trade barriers may result from disparate data requirements or policies, many are unintentional and stem from a lack of technical or regulatory capacity, particularly in developing economies.
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12. Exports Lost export potential Agricultural Production
10 ppm
Disharmonized MRLs are like uneven staves on a barrel. The lowest MRL is the limiting factor for exports
5 ppm
3 ppm
2 ppm
So how does MRL disharmonization impact growers and exporters?
Lost export potential
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13. MRL Violations and Commercial Risk
Violations can trigger sanctions for entire industry
Potential losses and cost of compliance deter trade
Compliance plans require significant resources
Potential risks may limit use/adoption of crop protection tools
Reduced opportunity for U.S. exports
Misaligned and missing MRLs in foreign markets impose high commercial risks that discourage export opportunities and limit growers’ options for crop protection tools.
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14. Emerging Challenges Fear-based campaigns undermining science
Hazard-based regulation
Spread of misinformation eroding trust in regulatory agencies
Fear-based campaigns undermining science
There are a number of external factors that are also shaping the macro environment surrounding pesticides.
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15. Foreign Agricultural Service
Linking U.S.
agriculture to the world to enhance
export opportunities and promote global food security
U.S. Agricultural Producers and Exporters
Trade
Policy
Promotion
Trade
Capacity
Building
FAS is the lead agricultural trade agency for the USDA and represents the interests of U.S. agriculture overseas
Three Pillars: Trade Policy; Trade Promotion (Marketing Programs); and Capacity Building and Food Security
Work with U.S. growers and other industry stakeholders to resolve sanitary, phytosanitary, and technical barriers to trade, and to support transparent, science-based regulations and standards
FAS Headquarters and Overseas Offices
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16. Interagency Partners
Also other agencies within USDA (Animal and Plant Health Inspection Service, Federal Grain Inspection Service)
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17. On the Ground Assistance
FAS foreign service officers in 95 offices around the world provide assistance in obtaining the release of detained U.S. shipments
Under the trade policy pillar of the FAS mission, FAS engages with foreign counterparts on MRL issues, both on the ground at a technical level, and at high-levels of political engagement.
2015: Released 250 shipments, $45 million
Photo:
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18. WTO Notifications
Over 16,000 SPS notifications have been submitted to WTO since 1995
FAS also monitors foreign regulations that have the potential to impact U.S. agriculture and trade.
FAS is lead in coordinating U.S. government responses to World Trade Organization notifications.
Under the WTO agreements on sanitary and phytosanitary measures and technical barriers to trade, Member economies are obligated to notify trading partners of measures that may impact trade.
MRL notifications specifically have grown by over 50% in recent years.
Source: USDA STAR System
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19. Bilateral and Multilateral Engagement
We also work in bilateral fora: FTAs, TIFAs
Regional fora like APEC and OECD
Multilateral fora like World Trade Organization and Codex
GMUS – international gathering to address minor use issues, FAS and IR-4
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20. Tools and Outreach www.globalmrl.com www.mrlpriority.com
ams.usda.gov/datasets/pdp
apps.fas.usda.gov/gats
gain.fas.usda.gov
Work to make data and information available to assist agricultural stakeholders.
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21. TASC Program (Technical Assistance for Specialty Crops)
Funding for projects that address sanitary, phytosanitary and technical barriers affecting the export of U.S. specialty crops.
Eligible activities include seminars and workshops; study tours; field surveys; pest and disease research; pre-clearance programs.
Applications are accepted on a rolling basis, with a maximum of $500,000 per year for up to 5 years.
Trade Promotion/Marketing Programs, 2nd pillar of FAS mission
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22. Market Access Program
Partnership between USDA and agricultural stakeholders to share the costs of overseas marketing and promotional activities.
Helps build commercial export markets for U.S. agricultural products and commodities through consumer advertising, public relations, point-of-sale demonstrations, participation in trade fairs and exhibits, market research, and technical assistance.
Through the Market Access Program (MAP), FAS partners with U.S. agricultural trade associations, cooperatives, state regional trade groups and small businesses to share the costs of overseas marketing and promotional activities that help build commercial export markets for U.S. agricultural products and commodities.
FAS supports four State Regional Trade Groups (SRTGs), which in turn assist U.S. companies with creating and expanding export markets for value-added food and agricultural products. These non-profit organizations work closely with state Departments of Agriculture and offer services including:
exporter training and education;
analysis of export markets and opportunities; 
trade shows and buying missions; and
support for international marketing campaigns and product promotion activities.
All promotional activities conducted by the SRTGs are coordinated with FAS's Washington and overseas offices and most are funded through the Market Access Program.
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23. Emerging Markets Program
Helps U.S. organizations promote exports of U.S. agricultural products to countries that have, or are developing, market-oriented economies and that have the potential to be viable commercial markets.
Provides cost-share funding for technical assistance activities such as feasibility studies, market research, sectorial assessments, orientation visits, specialized training and business workshops.
Capacity building projects often funded under this program, e.g. work with China on import tolerances.
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24. Quality Samples Program
Enables potential customers around the world to discover the quality and benefits of U.S. agricultural products.
Targets processors and manufacturers rather than consumers, with a focus on developing a new market or promoting a new use for U.S. products.
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25. Foreign Market Development (Cooperators Program)
FAS partners with non-profit commodity or trade associations called “cooperators,” to promote U.S. commodities overseas.
Focuses on generic promotion of U.S. commodities, rather than consumer-oriented promotion of branded products. 
Projects address long-term opportunities to reduce foreign import constraints and expand export growth opportunities.
Strategic engagement
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26. Capacity Building
Encourage the use of Codex and U.S. standards
Promote alignment of MRL policies and laboratory analytical procedures
Support residue research to remove MRL trade barriers and reduce U.S. cost burden for generating data
Enhance capacity for agricultural development and participation in international trade
Finally, 3rd pillar of the FAS mission, capacity building.
Some emerging/transition economies are developing their pesticide regulatory structures. FAS works with government partners to:
Encourage use of international/Codex standards
Provide guidance and training that promotes alignment of MRL policies and analytical procedures
Support residue research to reduce U.S. cost burden for generating data and remove MRL trade barriers
Through our capacity building activities, we are working to promote inclusivity and broad participation by all Member economies in Codex and the global trading system. As countries build up their capacity to meet international standards and export their own products, they are also emerging as some of the fastest growing markets for U.S. agricultural products.
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27. EPA minor use program helped to conceive this project.
Example of a long-term capacity-building project that is just starting to bear fruit: Global residue project.
USDA and IR-4 have been working with other countries to collaboratively generate data to support Codex MRLs. Often times, U.S. trials alone are not enough to obtain a Codex MRL. If we combine with trials from other countries, everyone saves resources.
EPA minor use program helped to conceive this project.
Source: Dr. Jason Sandahl, USDA-FAS
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28. USDA and IR-4 Partnering with countries around the world.
2017 saw first Codex MRLs established from application package pulling together this data.
Source: Dr. Jason Sandahl, USDA-FAS
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29. FAS: Linking U.S. agriculture to the world to enhance
export opportunities and promote global food security
Interagency and Industry Cooperation
Capacity Building and Food Security
Trade
Policy
Trade Promotion
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30. Questions? Julie.Chao@fas.usda.gov Thank you!
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