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and Basa and Tra

VIEWS: 13 PAGES: 16

									BEIJING BRUSSELS CHICAGO DALLAS FRANKFURT GENEVA HONG KONG LONDON LOS ANG ELES NEW Y ORK SAN FRANCISCO SHANGHAI SINGAPORE SY DNEY TOKY O WASHINGTON, D.C.




      U.S. Regulation of Catfish – and Basa and Tra
      April 2009
                                                                                                                      Brenda A. Jacobs
                                                                                                                      Sidley Austin LLP
                                                                                                                       Washington, DC
            Catfish . . . Basa and Tra

• Since 2002, U.S. catfish producers have battled
  against competition with imports.
   – First, they initiated an antidumping investigation that
     resulted in an order applying additional duties on
     imports from Vietnam (Certain Frozen Fish Fillets).
   – Second, a law was enacted banning Vietnamese basa
     and tra from being labeled “catfish” in the U.S. market.
   – Most recently, another new U.S. law will make imports
     of catfish subject to inspection upon entry into the
     United States.
      • Is basa and tra subject to this new rule?
      • Can the U.S. say a fish cannot be labeled “catfish” for purposes of
        marketing, but it is considered catfish for purposes of inspection
        requirements?
               Catfish . . . Basa and Tra

• What is going on?
• Different laws, different federal agencies
• U.S. political interests
   – Strong U.S. catfish industry
   – Anti-China backlash
       • China accounts for a large share of U.S. food imports, including
         seafood (As of 2006, China reportedly accounted for 10 percent of
         the seafood consumed in the United States.)
• Increased concern about the safety of the U.S. food supply
   – According to U.S. Department of Agriculture data,
     approximately 85 percent of all U.S. seafood consumption
     (including catfish) is from imports.
       • Compare that with a 15 percent import share for all U.S. food
         consumption
                The Labeling Rule

• In 2002, the U.S. Farm Security and Rural
  Investment Act amended the food misbranding
  provision of the Federal Food, Drug and Cosmetic
  Act, to say that a food is misbranded “if it
  purports to be or is represented as catfish,
  unless it is a fish classified within the family
  Ictaluridae.”
   – Basa and tra are pangasius
• The U.S. Food and Drug Administration (FDA) is
  responsible for enforcing the labeling provisions.
   – FDA is part of the U.S. Department of Health and
     Human Services.
                The Labeling Rule

• FDA provides a guide to “acceptable market names”
  for seafood sold in the United States
• The Guidance defines the different categories of
  names found in THE SEAFOOD LIST and outlines
  principles that can be used to label seafood species
  sold in the U.S. with an appropriate, nonmisleading
  statement of identity.
• http://www.foodsafety.gov/~comm/seaguid7.html
                  The Labeling Rule

• Despite the antidumping duty order and the labeling rule,
  U.S. imports of Vietnamese basa and tra have continued to
  grow.
   – In 2002, Vietnam accounted for 4,361 tons of basa and tra
     into the U.S.; In 2006, Vietnam accounted for 17,998 tons.
   – U.S. imports of basa and tra from Vietnam accounted for
     US$77 million in 2008, up from US$55.7 million in 2007.
• But so have U.S. imports of catfish from China.
   – U.S. imports of catfish from China totaled US$40 million in
     2008 (up from US$29 million in 2007) and
   – China also shipped US$12.5 million worth of basa and tra in
     2008
                The Safety Concern

                               • “During the 12 months
                                 ending January 2007, 49
                                 shipments of Chinese
                                 farmed catfish were
                                 refused by the U.S. FDA,
                                 because they contained
                                 banned and potentially
• “Tainted imported catfish      dangerous chemicals and
  may be reaching                antibiotics. In January
  consumers’ dinner tables.”     2007 alone, 10 shipments
   – Catfish Farmers of          were refused entry, up
     America                     from 2 refusals in January
                                 2006.”
                The Safety Concern

• In response, as part of the “2008 Farm Bill,” the
  U.S. Congress amended the Federal Meat
  Inspection Act to designate catfish, as defined by
  the Secretary of Agriculture, an “amenable
  species.”
   – Amenable species means that it is subject to mandatory
     inspection.
   – Definition of catfish to be decided by implementing
     regulations.
• This new law is implemented by the Food Safety
  and Inspection Service
   – FSIS is part of the U.S. Department of Agriculture.
       The Safety Concern: Inspections

• It is the intent of Congress “that catfish be subject to
  continuous inspection and that imported catfish
  inspection programs be found to be equivalent under
  USDA regulations before foreign catfish may be
  imported into the United States.”
• As a result of the new law, FSIS is responsible for
  ensuring that meat, poultry, egg and catfish in
  interstate and foreign commerce “are wholesome, not
  adulterated, and properly marked, labeled and
  packaged.”
• FSIS is required to implement the new law within 18
  months of enactment (which was June 18, 2008).
  That means it should issue implementing regulations
  by December 2009.
       The Safety Concern: Inspections

• FSIS said that it would issue a “Notice of Proposed
  Rulemaking,” (NPRM) by March 2009, in order to
  meet the December 2009 deadline for a final rule.
   – No NPRM was issued in March.
   – But FSIS says the regulations will define catfish and the
     scope of coverage of the regulations to apply to
     establishments that process catfish and catfish
     products.
      • Chinese production is based on imported brood stock from
        the U.S., so it is the same species (ictalurus) as the U.S.
   – FSIS says the regulations will “take into account the
     conditions under which the catfish are raised and
     transported to a processing establishment.”
               Grading Too?
• Another provision in the new law amends the
  Agricultural Marketing Act to require USDA to
  establish a voluntary grading program for
  catfish, which producers could opt into and
  pay for with user fees.
                       What Next?
• Vietnam should urge FSIS to define catfish consistent with
  the definition applied by FDA, BUT even if FSIS agrees that
  the definition of catfish should be limited to Ictalurus,
  excluding Panga, all signs point to more food safety
  legislation in the United States.
• The recent outbreak of salmonella at a peanut processing
  plant in the U.S., causing more food recalls than ever
  before in the history of the U.S. (with 100 companies
  recalling 3,500 different products), means that both the
  new Administration and the Congress are looking at
  additional updates to existing food safety laws.
            Obama Administration


• In March, President Obama announced
  the creation of a Food Safety Working
  Group.
  – will include the Secretaries of HHS and Agriculture, to
    advise him on which laws and regulations need to be
    changed, to foster coordination across federal agencies,
    and to ensure that laws are enforced.
  – Obama appears to support increased inspections over
    proposals to rely upon third party auditors.
                        The Congress

• A number of food safety bills have been
  introduced in the Congress.
  – There is a debate within the Congress about whether to
    bolster food oversight at the FDA or assign those
    responsibilities to a separate agency that would eventually
    absorb the food-oversight duties of 11 other agencies,
    including the FSIS.
  – Bills already introduced in 2009 seek to increase the
    frequency of inspections and tighten recordkeeping
    requirements.
     • Food import shipments would have to be accompanied by
       documentation that they meet safety standards that are at least
       equivalent to U.S. standards.
        – Certifications might be provided by governments or other accredited
          third parties.
           • Consider the Consumer Product Safety Improvement Act a model.
   Likely Importer (Customer) Demands


• Buyers want to know how product is being handled,
  whether chemicals or antibiotics are used.
• Buyers want a written record of inspections and other
  steps taken or tests administered to ensure the safety
  of seafood and other food products.
   – What systems do you have in place to remove unsafe
     product?
   – What systems do you have to trace product after it
     leaves your plant?
• If you use third party laboratories, how are they
  accredited?
• Buyers may demand that inspection information be
  included on the commercial invoice.
U.S. Regulation of Catfish -- Basa and Tra


                      • Brenda A. Jacobs
                        Sidley Austin LLP
                        1501 K Street, NW
                        Washington, D.C. 20005
                        202-736-8149 direct
                        202-736-8711 fax
                        email: bjacobs@sidley.com

								
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