As we detailed in our recent food safety report, the WTO and pending NAFTA expansions to Peru and Panama place sharp limitations on a strong and flexible food safety inspection system.
And now that some members of Congress are actually trying to do something to improve our food safety, WTO/trade rules are getting in the way. This from today's Inside U.S. Trade:
Durbin has also made an effort to explain ... his pending legislation that would increase Food and Drug Administration (FDA) inspections in the wake of tainted food imports from China. The bill would impose an import user fee to pay for increased FDA inspections to ensure food safety and require foreign exporters to be certified as meeting standards equivalent to those of the U.S...
If a domestic user fee system was also implemented, it could take care of some questions over World Trade Organization (WTO) compliance, as sources said that a user fee for importers could violate international obligations to give foreign producers national treatment in Article 3 of the General Agreement on Tariffs and Trade.
An informed source pointed out that unless 100 percent of all import shipments are inspected, the measure could be challenged in the WTO as importers could allege they did not receive the ‘service’ of having their shipments inspected and therefore, should not be obliged to pay for it. A previous WTO case against U.S. customs user fees established that they can be charged as long as they are based on the cost of performing the service and not based on the cost of the good.
Regardless of one thinks of the Durbin bill - or whether one even knows anything about it (some parts are good, but the user fees are controversial, and the "equivalent" rather than "equal" standard is very problematic - read our report for more) - it is clear that WTO rules which require that a country either:
- do nothing (inspect nothing, make no charges) or
- do the logistically/politically impossible (inspect ALL imports and domestic products, charge EVERY producer foreign and domestic a user fee - let's see how the food companies ramp up lobbying on that one) or
- do the highly byzantine (require an already underfunded and understaffed federal agency to keep records on each shipment, whether they were inspected, how much it costed them to perform the inspection, whether a fee was collected, etc. - but do so in a way that doesn't single out problem countries, etc.)