Canada and the United States have moved closer to taking steps to streamline the regulatory regimes which apply to a number of industries, including the food and agricultural industries. On December 7, 2011 President Obama and Prime Minister Steven Harper agreed to implement the Action Plan on Regulatory Cooperation (the "Plan"). The Plan will be the responsibility of the Regulatory Cooperation Council (the "RCC").
For years, businesses in both countries have been lobbying for an end to the distinct regulatory regimes on both sides of the border, which they say impede cross-border trade, now standing at approximately $500 billion per year.
The Plan recognizes that each country has its own independent regulatory scheme, which has resulted in a duplication of efforts for both governments and businesses. The RCC maintains that each country will continue to have its own sovereign regulatory regime; however, the objective of the plan is to achieve regulatory alignment.
The Plan proposes a number of initiatives to align regulation of food and agricultural products:
Inspection, Testing and Certification of Food
The Plan acknowledges that while each country independently administers its regulations, and while there can be differences in approach, efforts should be focused on regulatory alignment wherever possible, recognizing common health and safety outcomes. The Plan proposes to:
- develop of common approaches to food safety systems in order to align efforts and minimize the need for each country to conduct inspection activities in the other country.
- streamline requirements, and where possible, reduce duplicative regulatory activities under Canada and US meat and poultry inspection systems;
- ensure food safety testing in one country is acceptable to regulators in both countries and facilitate cross-border use of laboratory results; and
- streamline export certification for meat and poultry, and simply and reduce, where possible, import and administrative procedures.
Marketing of Meat
The Plan recognizes that the different meat cut nomenclature systems create confusion for consumers. For instance, terms such as "peameal bacon", "chicken tenderloin", and "flatiron steak" are used in the U.S. but are not permitted under Canadian regulations. Businesses incur marketing and certification costs to comply with the different regulations in each country. The Plan envisions the creation of a common meat cut nomenclature system to reduce such costs.
Agricultural Products
The Plan proposes further alignment of the regulation of agricultural products such as crop protection products and veterinary drugs . Specifically, the aim is to align the establishment and approvals of pesticide tolerances in the two countries by creating an environment to allow for the simultaneous submission and joint review of pesticide applications, in order to facilitate equal access to crop production products, and minimize differences in maximum pesticide residue limits and tolerances. Another goal is to align marketing applications for the review processes for veterinary drugs.
Next Steps
The Plan will develop joint audit plans by December 2012 to pilot evaluation of foreign food inspection systems. The results of the pilot project will establish plans for future joint audits.
The Plan will also develop assessment processes and site visits with respect to animal and plant commodities from foreign countries. A mechanism will be developed to share the results of the assessment between both countries.
Conclusion
The announcement of the Plan and the creation of the RCC are definitely positive developments for the food and agricultural industries. Elimination of some of the red tape that manufacturers and importers now face is long overdue. The regulatory alignments that have been proposed should reduce costs, facilitate cross- border trade and provide greater certainty on both sides of the border. However, as with other such good initiatives, "the devil is in the detail", and therefore what will be most interesting to see is what specific regulatory changes lay ahead.
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