The USDA catfish inspection program: Southeast Asian challenges at the WTO.

• Author: McCannon, Kristen E.
• Position: United States Department of Agriculture

1. INTRODUCTION II. OVERVIEW A. Background B. The 2008 Farm Bill C. The 2014 Farm Bill III. ANALYSIS A. The Measure Must Be Based on and Sustained by Scientific Evidence B. The measure must only limit trade to the extent necessary C. The measure must not arbitrarily and unjustifiably discriminate against the products of another country D. The measure must not be a disguised restriction on international trade IV. RECOMMENDATION I. INTRODUCTION

   In 2008, Congress enacted a law that transferred responsibility for inspecting imported catfish from the Food and Drug Administration to the U.S. Department of Agriculture (uSDA). Since the passage of this bill, the Government of Vietnam has alleged that the new inspection program would violate the United States' obligations to the World Trade organization (WTo), as detailed by the Agreement on Sanitary and Phytosanitary Measures (SPS Agreement). In order to analyze the applicability of the SPS Agreement to the 2008 law, this paper will outline specific provisions of the Agreement that Vietnam may use to challenge the USDA catfish inspection program at the WTo. This paper will conclude that the United States has violated those obligations.

2. OVERVIEW

   1. Background

      The products at issue in this paper are two types of fish that are both commonly known as "catfish." Contrary to popular belief, catfish is not a single species of fish. Rather, catfishes in American supermarkets include a wide variety of species in the taxonomic order Siluriformes. (1) Almost all of these fish have distinctive long barbels, or "slender fleshy protrubances," on either side on their mouths. (2) These barbels appear similar to cats' whiskers and inspire the fishes' common name. (3)

      Vietnam is one of the largest exporters of catfish species in the world. (4) Vietnam primarily produces two types of catfish, which are commonly known as "basa" (pangasius bocourti) and "tra" (pangasianodon hypophthalmus). (5) Both basa and tra are in the taxonomic family Pangasiidae. (6) Pangasiidae, along with all other catfish species, is in the taxonomic order Siluriformes and is sold as "catfish" in many foreign markets. (7)

      However, a substantial catfish industry also operates in the Mississippi River Delta of the United States, which is especially concentrated in northwest Mississippi, southeast Arkansas, and northeast Louisiana. (8) The catfish industry in this region has always sold products in the Southern United States, but sales expanded nationally in the 1980s, coinciding with the rise of catfish as a staple of mainstream American cuisine. (9) Unlike their Vietnamese counterparts, American catfish farmers generally produce fish in the family Ictaluridae, which is also in the order Siluriformes. (10)

      For many years after the Paris Peace Accords ended the Vietnam War, Vietnam did not export any catfish to the United States due to a trade embargo on Vietnamese products. (11) However, Vietnam and the United States resumed their trade relationship in 1995, when President Bill Clinton normalized diplomatic relations with Vietnam. (12) When Vietnamese producers began exporting cheap Pangasiidae to the United States in the late 1990s, American producers of Ictaluridae lost a substantial share of the American catfish market. (13)

      In response to this loss of market share, U.S. congressmen from catfish-producing states and districts pushed for legislation limiting the definition of "catfish" to the family Ictaluridae. (14) They were successful, and Congress limited the use of the term "catfish" to Ictaluridae in the 2002 Farm Bill. (15) Since this definition affected American labeling laws among other regulatory provisions, Vietnamese exporters could not label their products as "catfish" in the United States. (16) However, this law did not substantially diminish Vietnam producers' ability to sell Pangasiidae in the American market. (17) Vietnamese exporters remained highly competitive, even while labeling their fish simply as "basa" and "tra." (18) The Department of Commerce then imposed anti-dumping duties on Pangasiidae from Vietnam in 2003. (19) However, the U.S. catfish industry posted only modest gains in sales after the anti-dumping duties, and Vietnamese producers still dominated the American market. (20)

      American catfish producers continue to face economic difficulties. Although the sales of the U.S. catfish industry peaked at 660 million pounds of fish per year, American farmers sold only 300 million pounds in 2013. (21) Overall, the United States bought $339 million worth of Pangasiidae from Vietnam in 2013. (22) However, although Vietnam has continued to dominate the American market, a program debated for the past six years could potentially challenge Vietnam's economic dominance in the catfish market: the U.S. Department of Agriculture's catfish inspection program. (23)

   2. The 2008 Farm Bill (24)

      Prior to 2008, the U.S. government divided responsibility for inspecting imported foods between two federal agencies. The U.S. Department of Agriculture (USDA) oversaw the inspection of meat, poultry and eggs, while the Food and Drug Administration (FDA) oversaw the regulation of all other foods, including all seafood. (25) USDA's inspection programs are more stringent than those of FDA because meat, poultry and eggs have a high risk of foodborne illnesses. (26)

      USDA relies on "mandatory and continuous inspection" of every animal before and after slaughter. (27) Domestically, USDA validates all of the inspection programs used by individual slaughterhouses to oversee the health of every animal that is slaughtered. (28) For imports, USDA requires the inspection programs of all exporting countries to have "equivalence" with USDA standards. (29) The process of determining "equivalence" is lengthy--USDA personnel must, among other requirements, audit foreign documents, conduct in-person visits to overseas facilities, and publish their initial findings in the Federal Register for public comment. (30) This process generally takes between four and six years. (31)

      FDA, on the other hand, relies on "periodic checks and intermittent sampling" to ensure the safety of food. (32) FDA only checks food that has entered the processing and distribution supply. (33) FDA assumes that all food imported into the United States is safe unless these checks prove otherwise. (34)

      The same group of Senators that supported definitional limitations for catfish in the 2002 Farm Bill added another provision affecting the sale of catfish to the 2008 Farm Bill. (35) This provision required USDA to begin inspecting catfish. (36) The bill does not give USDA added responsibility for inspecting any other product--seafood or otherwise. (37) Thus, in accordance with the 2008 Farm Bills, USDA would only be responsible for overseeing the inspection of meat, poultry, eggs and catfish.

      Proponents of this provision argue that catfish poses a high risk of foodborne illnesses, and thus deserves special scrutiny. (38) They have argued that scientific evidence proves that imported catfish pose a risk from carcinogens, heavy metals and pesticides, unapproved anti-microbial drugs and Salmonella. (39) Proponents furthermore argue that this provision will require USDA to inspect both domestic and imported catfish, and that both domestic and foreign producers will be subject to the same strict regulations as American cattle ranchers and poultry producers. (40)

      Critics of the 2008 Farm Bill however, argue that USDA generally takes four to six years to grant "equivalency" status to inspection programs in foreign countries. (41) During that time, USDA would ban all foreign catfish imports, while still permitting American producers to sell their products. (42) In addition, USDA will likely have difficulty creating new regulations for overseas catfish inspections because USDA has no institutional knowledge of fish or seafood. (43) USDA could therefore easily take longer than four to six years to lift the ban on foreign catfish imports. (44)

      The House of Representatives did not have a similar provision in its version of the 2008 Farm Bill. (45) However, the Conference Report included the Senate's USDA catfish inspection program, and Congress passed the requirement into law as part of the final bill. (46) The Senate overrode President Bush's veto of the bill on June 18, 2008 with a vote of 80-14, enacting the bill into law. (47)

      After 2008, the process of implementing the USDA catfish inspection program stalled. Neither the outgoing Bush Administration nor the incoming Obama Administration took substantial steps to implement the program. (48) Among other issues, the Executive Branch struggled to interpret certain provisions of the law. (49)

      First, the Executive Branch struggled to define "catfish." The 2008 Farm Bill required that USDA inspect catfish, but then explicitly stated that the term "catfish" would be "defined by the Secretary." (50) Since the 2002 Farm Bill had explicitly stated that Pangasiidae was not catfish, USDA considered that Vietnamese imports might not be subject to the new requirements. (51) When USDA proposed a rule on the new program in February 2011, the rule suggested that the definition of catfish could be one of two options: either "catfish" should include only Ictaluridae, or the designation should include all Siluriformes. (52)

      USDA also considered that the new inspection program might be duplicative with FDA's inspection program, since the 2008 Farm Bill never explicitly called for FDA to dismantle its preexisting inspection regime. (53) USDA held public meetings on the proposed rule for catfish inspection in May 2011, but never formulated a final rule. (54) By 2013, the implementation of the program had stagnated. (55)

   3. The 2014 Farm Bill

      Despite early setbacks, the USDA catfish inspection program made a roaring comeback in the 2014 Farm Bill. In a preliminary version of the 2014 Farm Bill, the House of Representatives voted to...