Agricultural Law Weekly Review—December 8, 2016

Written by M. Sean High – Staff Attorney

The following information is an update of recent, local, state, national, and international legal developments relevant to agriculture:

Labeling: FDA to Extend Menu Labeling Compliance Date

On December 2, 2016, the United States Food and Drug Administration (FDA) announced that the agency “will soon publish a final rule to formally extend to May 5, 2017, the compliance date for the agency’s 2014 menu labeling regulation, which requires disclosure of certain nutrition information for standard menu items in certain chain restaurants and similar retail food establishments.” According to FDA, the change is intended “[t]o bring the official compliance date into alignment with the enforcement date.” Prior to the announcement, the official compliance date had been December 1, 2016. 

Labeling: USDA Proposes Changes to Meat and Poultry Nutritional Fact Panel

On December 1, 2016, the United States Department of Agriculture's (USDA) Food Safety and Inspection Service (FSIS) issued a press release stating that the agency “is proposing to amend the nutrition labeling regulations for meat and poultry products to parallel the U.S. Food and Drug Administration's (FDA) final nutrition regulations, which were published on May 27, 2016.” According to FSIS, the proposed changes are intended to “improve the presentation of nutritional information” so that consumers a better able to make healthy dietary decisions.

Industrial Hemp: PA Opens Application Process for Pilot Research Projects

On December 1, 2016, the Pennsylvania Department of Agriculture (PDA) announced the release of the application and guidelines for persons and institutions of higher learning interested in conducting industrial hemp pilot research projects.  According to PDA, a maximum of 30 projects will be selected for the 2017 growing season and the deadline for application is January 6, 2017.  PDA stated that only “products or uses that would use hemp fiber or seed for industrial purposes” will be approved.

GMO: USDA Finds no Evidence of Washington GE Wheat in Commerce

On December 1, 2016, the United States Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) issued a press release stating that the agency had closed its fact finding and determined that genetically engineered (GE) wheat detected in Washington State did not enter into commerce.  The investigation was the result of a July 2016 discovery of 22 GE wheat plants (developed by the Monsanto Company and referred to as MON 71700) growing in an unplanted agricultural field.

Regulations: USDA Announces Changes to Reporting and Notification of Imported Fruits, Vegetables, and Specialty Crops

On December 5, 2016, the United States Department of Agriculture (USDA) Agricultural Marketing Service (AMS) posted notice in the Federal Register of an interim rule that “updates reporting and notification requirements associated with, and makes clarifying changes to, the fruit, vegetable, and specialty crop import regulations for certain commodities regulated under section 608(e)…of the Agricultural Marketing Agreement Act of 1937” (81 FR 87409).  According to the notice, the effective date of the interim rule is December 8, 2016 and those comments received by February 3, 2017 will be considered prior to the issuance of a final rule.

Dairy: USDA Amends Tariff-Rate Quota Import Licensing Program

On December 6, 2016, the United States Department of Agriculture (USDA) posted notice in the Federal Register that the agency was issuing a final rule amending the Dairy Tariff-Rate Quota Import Licensing Program (81FR 87801).  According to the notice, effective December 9, 2016, “for the purposes of the Dairy Tariff-Rate Quota Import Licensing Program, U.S. Customs and Border Protection import entries submitted electronically, as well as on paper, are acceptable.

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Recent AgLaw HotLinks include:

• Armed federal agents seize milk products from major cooperative - FoodSafetyNews
• Certification would ensure welfare during cattle transport - Feedstuffs
• Confusion over compliance date for menu labeling - FoodSafetyNews
• Untapped potential in precision farming technology - Brownfield
• Bio: GMO labeling is about marketing - Brownfield
• PA to host third organic farms conference in Harrisburg this month - PA.gov
• New food labeling requirements receive thousands of comments from activists - FoodSafetyNews
• Protein company announces plan to reduce greenhouse gas emissions by 25 percent - Brownfield
• 4 million birds in Europe culled to slow spread of pathogenic avian influenza (HPAI) – Meatingplace

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WTO Arbitrator Rules against U.S. COOL Law

Written by M. Sean High – Staff Attorney

On December 7, 2015, the U.S. Country of Origin Labeling (COOL) law suffered a significant blow as a World Trade Organization (WTO) arbitrator determined that COOL violated international trade obligations, and awarded Canada and Mexico the right to impose over $1.2 billion in retaliatory tariffs against U.S. exports.

Under COOL, certain food retailers (such as supermarkets and grocery stores) are required to provide the name of the country of origin on the labels on specific food products including “muscle cut and ground meats: beef, veal, pork, lamb, goat, and chicken; wild and farm-raised fish and shellfish; fresh and frozen fruits and vegetables; peanuts, pecans, and macadamia nuts; and ginseng.” 

According to Canada and Mexico, through the enactment of COOL, the U.S. violated Article 2.1 of the Agreement on Technical Barriers and Trade (TBT Agreement) requiring that all signatory members (which include the U.S., Canada, and Mexico) “shall ensure that in respect of technical regulations, products imported from the territory of any Member shall be accorded treatment no less favourable than that accorded to like products of national origin and to like products originating in any other country.” Canada and Mexico contended that by requiring country of origin labeling, the two nations were “accorded less favourable treatment of imported livestock than to like domestic livestock,” and because of this treatment, the U.S. failed to carry-out its TBT Agreement obligations.

During the arbitration proceedings, Canada and Mexico’s asserted that because of COOL, they each experienced “export revenue losses” and “revenue loss as a result of domestic price suppression.” Canada claimed annual revenue losses totaling $1,054,729,000 and Mexico claimed annual revenue losses totaling $227,758,000.  Ultimately, the presiding arbitrator agreed with Canada and Mexico and awarded each nation the ability to impose retaliatory tariffs on the U.S. commensurate with their claimed annual revenue losses.  

Following the WTO arbitral ruling, U.S. House Agriculture Committee Chairman K. Michael Conaway (R-TX) stated, “We have known for some time that the Country of Origin Labeling law violates our international trade obligations.” Significantly, on June 10, 2015, legislation sponsored by Chairman Conaway that would repeal COOL (H.R. 2393), passed the U.S. House of Representatives by a vote of 300-131.  Currently, H.R. 2393 awaits action by the U.S. Senate. 

U.S. Chicken Import Ban Continues in South Africa

By Katharine Richter

On August 7, 2015, the Office of the United States Trade Representatives (USTR) held a hearing to determine “whether South Africa should be suspended from the recently renewed African Growth and Opportunity Act (AGOA)” because of failure to eliminate specific agricultural trade barriers previously agreed upon.  AGOA, a trade agreement giving South Africa very “liberal access to the U.S. market,” was renewed on June 29, 2015. 

According to a joint statement from USTR, on June 4 and 5, 2015, industry representatives and government officials from the United States and South Africa met in France to discuss agricultural trade issues in relation to renewing AGOA.  South Africa had agreed to allow “renewed market access for U.S. bone-in-chicken.”  Prior to the meeting, South Africa placed anti-dumping duties on American chicken, effectively banning U.S. chicken.  South Africa at the meeting agreed to create the framework allowing U.S. chicken imports.

The President of the National Chicken Council (NCC), Mike Brown, testified at the hearing that South Africa needs to begin to “treat U.S. products fairly… [and] unless South Africa makes significant progress in this regard, the law now requires the president to take action to limit, or even deny, further preferences.” 

This response from NCC is a result of South Africa failing to implement agreements made at the France meeting.  According to the testimony, “South Africa has agreed to open, and the U.S. industry has agreed to accept, an initial annual antidumping duty-free quota of 65,000 MT, with future growth in that quota calculated upon an agreed formula…”  Mike Brown stated in his testimony, “In our view, South Africa will have only made the progress it is required to make under the AGOA renewal legislation when there are actual imports of U.S. poultry moving into South Africa.”