By Ching-Fu Lin
In a congressional letter last month, 76 House Members urged United States (US) Trade Representative Michael Froman to push for strong and enforceable sanitary and phytosanitary (SPS) measures in the proposed Transatlantic Trade and Investment Partnership (TTIP). SPS measures – which have been viewed as an area with very little room for convergence between the two sides – cover animal health, plant health, and food safety law and regulation. The differences are evidenced by previous politically salient disputes over hormone-treated beef, genetically modified organisms (GMOs), and more recently, ractopamine in pork. Indeed, given the cultural and institutional divergences between the US and the European Union (EU) food safety regulatory systems, many doubt the possibility that TTIP can come up with an SPS chapter (or an SPS-Plus chapter) that strikes a proper balance between public health and international trade.
As noted by some commentators, given the relatively low tariffs between the EU and US, the chief focus will center upon reducing non-tariff barriers to trade in numerous sectors, including agricultural products, biotechnology, and food safety regulation. The Food and Drug Administration (FDA) has also established a special public health and trade team within its Office of International Programs to take a more active role in the negotiation. Yet the negotiation over such a “sensitive” area has been considered unpromising—transatlantic deadlock, cooperation failure, and several deal breakers (especially regarding GMOs)—because the differences in food safety regulation between the US and EU seem not only significant but also persistent.
However, the outlook may not be as pessimistic as the common understanding.
The recent development in global food safety governance seems to provide the ongoing TTIP negotiation with a decent premise to facilitate fruitful transatlantic regulatory dialogue and cooperation (although not necessarily harmonization), provided some key areas of convergence are identified. What is needed then, may simply be locating appropriate ways of cooperation, either in terms of structure or substance.
First, there has been a tendency to “overgeneralize” from a few friction points in trade and different risk perceptions between the EU and US (such as GMOs) to their approaches to food safety governance as a whole. To be fair, this is a valid point since biotechnology, agricultural policy, and food safety governance are closely intertwined. Nevertheless, it only partly answers the question of the future of transatlantic regulatory cooperation. In fact, the EU General Food Law (Regulation EC/178/2002) and US Food Safety Modernization Act 2011 (FSMA) share a basic mandate and have similar objectives of contemporary food safety governance. For example, the core elements of both legislations are the food industry’s primary responsibility for ensuring food safety, process-based regulation aimed at the whole supply chains, and linking international standards. Some recent regulatory convergences may offer a better chance at giving new momentum to transatlantic cooperation.
Second, institutionalized private regulatory mechanisms by industry actors across the Atlantic have gained increasing dominance as well as importance in shaping the “real rules” in trade in food. Private standards and rules complement (if not replace) public counterparts and drive extensive commercial adaptation through the backing of economically powerful importers or retailers responding to consumer preferences. Therefore, whether both the EU and US can actually harmonize their substantive rules is not necessarily decisive in terms of what actually happens on the ground.
Third, the negotiation uncertainty in other chapters may further reconfigure the SPS chapter of the TTIP. As Mary Lou Valdez, director of FDA’s Office of International Programs concedes, such uncertainty might put the US (rather than the EU) on the defensive. For example, the FSMA’s aggressive regulatory enterprise, such as foreign inspections and third-party auditing requirements, may face challenges in the negotiation on how certain SPS provisions would be enforced. Moreover, the design of the TTIP dispute settlement system and trade remedies (such as an investor-state arbitration) would also considerably affect how the both sides structure provisions in different chapters, including food safety provisions.
It is unlikely that the EU will drop its precautionary principle and deregulate areas like hormones and ractopamine facing intense public criticism. But given lasting failures in multilateral trade talks and the overall economic climate, failure to reach a transatlantic deal may be costly. Thus, cooperative mechanisms such as mutual recognition and expedited entry are probable in most areas; and less procedural obstacles in sensitive areas. After all, the outcome of the negotiation is yet to be observed. What are your thoughts?