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Trade Deficit in Food Safety

Proposed NAFTA Expansions Replicate Limits On U.S. Food Safety Policy That Are Contributing To Unsafe Food Imports

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Executive Summary

Revelations of significant safety threats posed by imported foods have dramatically heightened public awareness that current policies are failing to protect consumers from exposure to dangerous – and potentially deadly – imported food and products. The recent discovery of tainted imports of pet food ingredients that sickened or killed some 39,000 animals should be a wake-up call for all Americans. A steadily increasing amount of food on U.S. dinner plates is imported. The massive growth in imports and current trade rules that limit domestic safety standards on imported products and border inspection are forcing U.S. consumers increasingly to rely on foreign governments to regulate the food and other products they will bring into their homes.

As Congress steps up action to address the threat and Democratic presidential candidates prioritize new food safety plans, proposed trade pacts now pending before Congress would replicate and lock in limits on the U.S. government’s ability to ensure imported food safety. Included in proposed “Free Trade Agreements” (FTAs) with Peru, Panama, Colombia and South Korea are limits on what safety standards the United States can require for imported foods and how much inspection is permitted. U.S. laws that extend beyond the FTAs’ limits that have the effect of limiting access of imported food to the U.S. market are subject to challenge as “illegal trade barriers” before foreign trade tribunals. This report, which includes new analyses of seafood import safety problems from prospective FTA countries Peru and Panama, presents the food import and safety trends that are fueling the import safety crisis:

  • Today nearly $65 billion in food goods are imported into the United States annually – nearly double the value imported when the North American Free Trade Agreement (NAFTA) and World Trade Organization (WTO) went into effect in the mid-1990s. Today, over 80 percent of the seafood Americans eat is imported. In the NAFTA-WTO era from 1995 to 2005, seafood imports increased 65 percent. Between 1995 and 2005, shrimp imports alone jumped 95 percent.
  • The U.S. International Trade Commission (ITC) projects that U.S. imports of Peruvian food products will increase if the proposed Peru FTA is implemented. For certain categories of food, such as beef, ITC models show that the increase could be substantial, once tariff cuts are phased in. The ITC also notes that imports of goods could be expanded even more than their models project, due to businesses significantly ramping up their production geared for the U.S. market – an outcome consistent with the experience following implementation of past U.S. FTAs. The ITC report on Colombia makes similar projections, while ITC reports on the Panama and South Korea FTAs are not yet completed.
  • This report explains the rules incorporated into the proposed FTAs with Peru, Panama, Colombia and South Korea that limit food safety standards and border inspection. The agreements prioritize facilitating access for imports over consumer safety − requiring the United  States to rely on foreign regulatory structures and foreign safety inspectors to ensure that food imports are safe. Unfortunately, data show that many foreign regulatory systems are simply not up to the task. Passage of the pending FTAs would elevate, not lessen, the threat to the safety of the U.S. food supply. The FTAs could have been an opportunity to create a new model for enhanced food safety in trade. Instead, the agreements, if implemented as written, may well generate the next spate of news reports about problems with food products from these countries.
  • Contrary to what consumers believe, the vast majority of imported foods that end up on the dinner plates of U.S. consumers is unexamined and untested. Today, the Food and Drug Administration (FDA), estimates that it will only conduct border inspections on .6 percent of the food that it regulates (vegetables, fruit, seafood, grains, dairy and animal feed) at the border in 2007 − down from an already disconcerting eight percent prior to NAFTA and WTO. FDA data makes clear that Americans are three times more likely to be exposed to
    dangerous pesticide residues on imported foods than on domestic foods. Even though FDA inspectors have only examined a tiny fraction of imports in recent years, inspectors have caught
    numerous dangerous substances in imports from Peru. The FDA has found illegal pesticide residues on fruits and vegetables, the parasite cryptosporidium in salad vegetables and basil,
    unknown and unapproved drugs and capsules (including filthy and unapproved shark cartilage capsules and unapproved cats claw capsules), Listeria in avocadoes, and unsafe color additives in chocolate bon bons and soft drinks. Similarly, they have caught dangerous products from Panama.
  • Only 11 percent of beef, pork and chicken imported so far in 2007 has been inspected at the border by the U.S. Department of Agriculture (USDA).
  • While over 80 percent of seafood eaten by Americans is now imported, in 2006, the FDA was able to inspect only 1.93 percent of total seafood imports. The vast majority of these inspections were visual. For 2006 only .16 percent of the 859,357 shipments of seafood were refused entry into the United States. The estimated annual incidence of infection with Vibrio, a diarrheal disease associated with seafood, increased 78 percent from 1996 to 2006, according to the Centers for Disease Control (CDC). Vibrio is associated with eating oysters, which are imported increasingly into the United States from South Korea, Colombia, Peru and other nations.
  • Of particular concern regarding the Peru, Panama and Colombia agreements is the anticipated increase in seafood imports. Peru, Panama and Colombia are three of the world’s top 20 exporters of shrimp to the U.S. market. New analysis of government data obtained by Food & Water Watch under a Freedom of Information Act Request shows that FDA inspectors have rejected seafood from Peru and Panama for numerous reasons including filth, adulteration, misbranding and the presence of various dangerous food-borne pathogens. Both Peru and Panama have major export fishing sectors. Peru’s marine and inland capture fisheries production is the second highest in the world at 9.6 million tons in 2004 – second only to China. Currently, the United States is the primary importer of all Panamanian seafood and is one of the main importers from Peru. The FDA’s database has documented the discovery of
    poisonous swordfish, Salmonella in shrimp, dangerous histamines in Mahi Mahi and just plain filth in shipment upon shipment of dried, canned, frozen and fresh fish products from Peru. Similarly, FDA inspectors have documented problems with Panamanian seafood exports to the United States including Listeria in smoked salmon, Salmonella in shrimp and lobster tails, poisonous swordfish and shark loin, and obvious filth in dried, fresh and frozen fish. The report contains startling charts and graphs, including those that break down the reasons for rejection of Panamanian and Peruvian seafood over the past nine years.
  • While currently the four prospective FTA countries’ governments have the ability to challenge U.S. food standards in government-to-government WTO disputes, the proposed FTAs would newly empower the over 10,000 food exporters currently registered from Peru, Panama, Colombia and South Korea to pursue challenges directly against U.S. food safety laws if they believe such laws undermine their FTA-granted foreign investor rights. This is not a speculative threat. Already under NAFTA, Canadian cattle producers have used such foreign investor private enforcement rights to demand $235 million in compensation from the U.S. government over the U.S. temporary ban on Canadian beef imports when several Canadian cattle were initially found to be infected with mad cow disease.
  • The pending FTAs establish new committees to speed up implementation of mechanisms to facilitate trade rules, including “equivalence determinations,” that require the United States to permit imports of meat and poultry products that do not meet U.S. safety standards. Once so-called equivalence is achieved, products to be imported into a country must only meet the standards of the exporting country – not those of the importing country. The Peru FTA specifically provides for consultations on trade in chicken and the Peruvian government is already starting to prepare for this chicken trade. Both agreements include dozens of tariff lines on cuts of beef that will permanently drop to zero when the agreements are fully implemented.
  • While many consumer products, such as Thomas the Tank Engine toys, have mandatory country-of-origin labeling, consumers are none the wiser regarding many food products because the implementation of a federal law passed in 2002 requiring country-of-origin labeling on beef, pork, lamb, fresh fruits and vegetables, seafood and peanuts has been delayed time and time again by intense industry lobbying. Currently only prepackaged retailready foods, and certain non-processed seafood sold in the United States are required to have country-of-origin labeling. Hopefully, an agreement just forged by House Agriculture Committee Chair Collin Peterson (D-Minn.) will lead to country-of-origin labeling (COOL) of imported beef and other red meat. The prospects for labeling of other foods remain unclear. Meanwhile, a newly released Consumer Reports study says an astounding 92 percent of U.S. consumers support country-of-origin labeling.

The report concludes with tips for consumers on how to protect themselves from unsafe imported food. However, these recommendations cannot replace desperately needed reforms to U.S. trade and food safety policies – including the specific recommendations in this report.