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LATEST NEWS UPDATES | Walk the talk

Walk the talk

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published Published on Nov 1, 2015   modified Modified on Nov 1, 2015
-The Hindu Business Line

India must fight against its food exports being placed under USFDA scrutiny

When it comes to free trade, the US is the world’s leading evangelist. However, while the US market overall remains one of the world’s most open markets in terms of access, when it comes to politically sensitive constituencies such as agriculture, the picture changes dramatically. The debate over farm subsidies, of course, is fairly well known. While the US has been pushing India hard — both bilaterally and in multilateral negotiations — to cut its subsidies to farmers, and provide greater access to Indian markets for agricultural exports, US farmers remain one of the world’s most heavily subsidised in absolute terms. As for access, although all non-tariff barriers to trade relating to agriculture were nominally ‘tariffised’ after the Uruguay round — that is, converted to purely tariff-based restrictions — the fact remains that the world’s major consumption markets such as the US and the EU, as well as major agricultural export economies around the world, have managed to erect various forms of non-tariff barriers ranging from quantitative restrictions to quality and safety standards, as well as sanitary and phyto-sanitary (SPS) protocols and public health-related measures.

A significant new layer has been added by the recent amendments to US food safety laws. The US Food Safety Modernisation Act — dubbed the most sweeping reform of food safety laws in 70 years — became law in 2011, but a series of measures are slated to come into force over time. The Act requires large-scale exporters to register themselves with the USFDA for inspection and audits by 2017 and medium- and small-scale exporters in the following two years respectively. India has rightly protested this, arguing that such compliance will add substantial costs to exporters, and make Indian exports non-competitive. India has asked for either exemption, or allow acceptance of compliance and safety certifications issued by Indian agencies like the Food Safety and Standards Authority of India or the Export Inspection Council. However, this is unlikely to happen, since the US Act specifically calls for moving beyond standards of ‘Good Manufacturing Practices’, as well as Hazard Analysis and Critical Control Points certifications. According to the US rules, preventive control requirements include those related to recall plans, sanitation, employee hygiene training, environmental monitoring, allergen control programmes, current good manufacturing practices, supplier approval and verification activities, corrective actions, verification activities, and records. Complying with these would add further layers of costs, effectively restricting access.

In the complex world of global trade negotiations, it all boils down to who gets to set the rules. India needs to use the growing clout provided by its rapidly growing consumer market to ensure that it joins the rule setters. That said, we also need to recognise that while our rules and regulations may compare with global standards, compliance and enforcement leave much to be desired. A focused plan to improve standards back home will not only help domestic consumers, but help India negotiate from a position of strength.

The Hindu Business Line, 30 October, 2015, http://www.thehindubusinessline.com/opinion/editorial/walk-the-talk/article7823696.ece?homepage=true


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