The Food and Drug Administration (FDA) recently released two proposed rules on U.S. food imports under the Food Safety Modernization Act of 2010 (FSMA). Under the first rule importers would have to establish that imported foods have been produced consistent with U.S. standards. The second one would establish a program for recognizing foreign government agencies and private companies that would accredit third-party auditors of foreign food facilities. These rules would replace a system designed to respond to contamination with one to prevent contamination.
FDA and USDA share responsibilities in monitoring U.S. food imports, with USDA having oversight for livestock, meat and poultry, and FDA regulating most other products. The proposed rules apply only to products under FDA purview. Comments on the proposed rules are due by Nov. 26, although some analysts believe it could be a year or two before final rules are implemented. The law was signed by President Obama over two and a half years ago and numerous deadlines have been missed. A large amount of stakeholder input is expected on the proposed rules, much of it positive, to which FDA is required to respond.
The proposed rule on Foreign Supplier Verification Programs (FSVP) would require importers to perform activities based on hazards identified for each food, conduct or obtain documentation of verification activities which could include onsite auditing, sampling and testing, provide adequate assurances that identified hazards are being controlled, and take corrective actions if needed. FDA will continue to check food at borders, but rather than relying almost entirely on investigators at the ports to detect and respond to food safety problems, importers would be held accountable for verifying that the foods they import is safe.
The proposed Accredited Third Party Certification rule would provide for recognition of agencies of foreign governments or private companies that would accredit third-party auditors of foreign food facilities. These auditors would conduct food safety audits and issue certifications that FDA would use in deciding whether to admit certain imported foods that FDA has determined pose a food safety risk. Both accreditation bodies and auditors would meet standards established by FDA to ensure the quality and credibility of audits. An audit is a comprehensive assessment of a food-producing operation and the report of audits used for certification purposes would be submitted to FDA.
Importers will not generally be required to obtain certifications, but in certain circumstances the FDA may use certifications from accredited auditors in determining whether to admit imported food. The FSMA authorizes the FDA to create a Voluntary Qualified Importer Program (VQIP), which would provide for expedited review and entry of food into the U.S. In order to participate in VQIP, importers must import food from certified facilities.
The FSMA shifts much of the burden to show that imported food is safe to importing businesses. It also creates a basis for FDA to reject food imports in addition to finding the food to be adulterated. Food could be refused import access if FDA finds that an importer does not have an adequate FSVP in place.
The sheer volume of food imported requires a solution other than testing each shipment. In the fiscal year ending on September 30 of this year, agricultural commodities and processed food imports into the U.S. are estimated by USDA at a record $111 billion, which has tripled over the last 15 years. Horticultural product imports this year are expected to total $47.0 billion, followed by sugar and tropical products at $26.0 billion, grains and oilseeds at $20.7 billion and livestock and dairy products at $14.8 billion. FDA estimates that 15 percent of the food supply is imported, including 50 percent of fresh fruit and 20 percent of fresh vegetables.
The $111 billion of food imports for fiscal year 2013 come from around the globe, but are concentrated in a few regions. Imports from Canada are expected to total $22.6 billion. With many integrated supply chains serving both countries, the new rules should have little impact. Mexico is the next largest source of imports at $18.3 billion. Supply chains are mostly integrated, but the new system will likely reduce problems that do exist. Fresh fruits and vegetables account for 45 percent of the dollar value of imports from Mexico. Central America and the Caribbean are expected to ship $6.3 billion of products to the U.S. These countries have food safety issues, but their proximity to the U.S. and supply chain integration are positive factors. Some suppliers may get squeezed out under the new system. These three suppliers account for 43 percent of U.S. agricultural imports.
The next largest exporter of agricultural products to the U.S. is the EU at $17.5 billion. The EU has free trade among the 28 countries and is as concerned about food safety as the U.S. South America is estimated to have exports to the U.S. of $13.2 billion this year. They are upgrading food safety systems to serve developed country markets that demand it. The countries of Southeast Asia will collectively have agricultural exports to the U.S. of $10.1 billion. Distance and unevenness of standards may stress commercial relationships. China is expected to have exports to the U.S. of $5.0 billion. Food safety has been an issue there, domestically as well as for export, and the new FDA programs could be helpful.
Most major developed and developing country are increasing food imports as consumers with rising incomes demand more variety in diets and more healthy foods. If the U.S. and Canada import fresh fruit and vegetables from Mexico, there should be one standard of food safety to simply compliance and lower costs. If the EU and the U.S. reach agreement on the Transatlantic Trade and Investment Partnership trade agreement, they should have similar food safety rules for the many developing countries that serve both markets. The same should be true for the U.S. and Japan in the Trans-Pacific Partnership free trade agreement. Each country can have its own system, but share common elements where it is beneficial to do so.
There is no timeline for when FDA will have final rules completed. November 26 is a common final date for comments for several proposed rules. Even though there is general agreement about what needs to be done, there will be thousands of comments about each proposed rule. At some point FDA will need to move to final rules and make adjustments as implementation moves forward.