SPECIAL EDITION IV:
Creates Collateral Damage
Baja Growers Denied Fair Access…
Building Case For WTO
Jim Prevor’s Perishable Pundit, June 12, 2008
Our piece, Free Baja, along with the accompanying interview, Andrew & Williamson Hit Hard By FDA’s Mexican Tomato Ban, was almost unanimously embraced.
Except by the FDA, which agrees in concept but has vaguely asserted “complication” in the matter.
As best as we determine, the “complication” is this: FDA has close working relationships with the authorities in each state. So it has confidence that in Florida, where it now allows product from certain counties to ship, the required “Certificates of Origin” are only being given to loads that meet both the geographic and time requirements the FDA has detailed.
In contrast, FDA does not have the same faith in the Mexican authorities and fears they might issue certificates for products that don’t meet the defined criteria.
To translate, they are afraid of bribery and corruption in Mexico. However, they are also afraid of elevating this to a diplomatic crisis and so don’t want to insult anyone. As a result, the FDA officials are making no public statements.
FDA fears may be legitimate, but it is not clear that they are relevant.
WTO rules require a parallelism in the treatment of imports and domestic producers. It is almost certainly a treaty violation to allow US production to gain market access based on date of production onset but not allow Mexico the same consideration. Especially since the old and new Florida production areas are very close geographically, whereas Baja — the new production area in Mexico — is a thousand miles from Sinaloa and other older production areas.
By its nature, imported product has a paper trail that makes Baja production more easily traceable than that of any domestic production area.
We understand that both the Governor of Baja and the Secretary of Agriculture of Mexico have communicated through appropriate channels the urgency they place on getting fair access to US markets for Baja growers.
FDA can stall a day or two, but it is basically insulting an important US ally, and if FDA doesn’t move expeditiously we can expect this matter to rise to the presidential level.
During the Honduran Cantaloupe Outbreak, the president of Honduras also got involved, though to little effect. But Mexico is not Honduras, and the FDA’s rejection of all production from an entire country elevates the matter to a trade dispute, whereas in the Honduran situation it was just one company being penalized.
In fact, in a piece we wrote during the Honduran cantaloupe controversy, entitled Fix Suggested For FDA’s Vigilante System Of Banning Product Through Import Alerts, our interview with Mitchell Fuerst and Christine M. Humphrey, both attorneys at Fuerst, Humphrey, Ittleman in Miami, FL, presaged this very situation:
Q: Does politics complicate matters when dealing in the international arena?
A: FUERST: A foreign grower has no legal right to do business in the U.S. When FDA takes action in the form of an import alert, if it affects just a particular grower, that grower has no right to go to court and say, ‘you’ve taken away our business.’
But if FDA banned all country imports, it would create the right of that country to go to WTO and contest what FDA has done. In order to avoid that issue, FDA will put out a countrywide alert with one exemption to prove the FDA is not creating a non-tariff trade barrier; but is instead asserting its right under WTO to protect the U.S. public from unhealthy food. The FDA can contentiously say, ‘we’re not revealing what we have,’ and evade the judicial process.
Right now, the FDA would probably contend that its “warning” doesn’t stop anyone from shipping, but that argument won’t hold up.
If FDA doesn’t resolve this quickly, you can expect this to elevate to the highest level, and if Mexico doesn’t get a fair shake, Mexico will take the dispute to the WTO… and it will win.