1. Sanitary Measures Impact on US- Canada Beef Trade AGEC 630 – Agriculture, Food and Resource Policy Prof. John Henning Fabrizio Galli MS-1F Winter 2009

2. 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

3. 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

4. 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 -No mandatory requirements  70% “critical mass” participation premise registration animal identification animal tracing

5. - Canadian Food Inspection Agency (CFIA)  13 Acts - Health of Animals Act (Health of Animals Regulation, Section 15) - Canadian Cattle Identification Program (CCIP) – 2001 - Canadian Sheep Identification Program (CSIP) – 2004 - 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

6. 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

7. 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

8. 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

9. Canadian beef sector - Significant share of total production: exports 37% (2008).

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

11. Canadian beef exports

12. Canadian live cattle exports

13. -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

14. 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 – www.inspection.gc.ca, accessed in April 2009.www.inspection.gc.ca - 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.www.usda.gov