April 27, 2006


Secretary Mike Johanns
United States Department of Agriculture
Room 200-A, Jamie L. Whitten Building
12th Street & Jefferson Drive, SW
Washington, DC 20250


Dear Secretary Johanns:

On behalf of the consumer group Food & Water Watch, I am writing concerning the final rule entitled, “Addition of the People's Republic of China to the List of Countries Eligible To Export Processed Poultry Products to the United States,” that was approved by the United States Department of Agriculture (USDA) and which appeared in the April 24, 2006 Federal Register (71 FR 20867-20871).  As you know, I filed comments on the proposed rule.  I am requesting that you consider recission of this rule for substantive and procedural reasons.

Substantive Issues

1.  As I wrote in my January 23, 2006 comments, the Food Safety and Inspection Service (FSIS) was having problems enforcing existing equivalency agreements we already had prior to the addition of the People’s Republic of China (PRC) to 9 CFR Part 381.196.  It did not make any sense to add the PRC to the list of countries eligible to export to the United States if FSIS did not have the capacity to enforce any agreement we reached. 

Specifically, I pointed to the following statement made by the USDA Inspector General in an audit report entitled, “Food Safety and Inspection Service Assessment of the Equivalence of the Canadian Inspection System” (Report No. 24601-Hy; December 2005):

“Timely actions were not taken because FSIS does not have protocols or guidelines for evaluating deficiencies in a country’s inspection system that could jeopardize a country’s overall equivalence determination.” ¹

While this audit report focuses on deficiencies in the Canadian food inspection system that FSIS failed to pursue in systematic manner, the report is an indictment of the entire enforcement program for all of the equivalence agreements FSIS has executed.  The audit report goes on to point out inconsistencies in FSIS actions taken against meat establishments in Australia and Belgium and those in Canada found to have similar violations.  The plants in Australia and Belgium lost their ability to export product to the U.S. Yet, the Canadian plants with similar violations were still allowed to export to the United States and USDA did nothing to take punitive action against the Canadian Food Inspection Agency for allowing these violations to continue.   Consequently, the FSIS reviewer of my comments was incorrect to dismiss my assertion that the findings of the Inspector General only applied to Canada.  The audit report was a critique of the overall ability for FSIS to enforce equivalence agreements in a consistent manner.

I pose this question again as I did in my January 23 comments:  If USDA cannot enforce an equivalence agreement with a major trading partner that is located right on our northern border, what makes USDA think that it can adequately police an equivalence agreement on the other side of the world with the PRC?

2. We have serious questions about the annual FSIS audit program for foreign plants that are eligible to export to the United States.  We do not believe that the frequency of those visits is adequate to ensure that our equivalence agreements are being adhered to.  As I stated in my January 23 comments, FSIS inspectors continually find problems in establishments that are eligible to export to the United States, even in countries with which we have mature trading relationships.  Often, the nature of the violations is similar year after year after year.  The establishments make the required corrections to avoid being de-listed, yet they go back to procedures that violate the equivalence agreement until the next time they get caught by FSIS – which could be years, since FSIS only audits a small sample of foreign establishments eligible to export to the United States annually.  Very rarely does FSIS take strong disciplinary actions against a country that tolerates violations of our equivalence standards; and there has been no example of a country being removed from either 9 CFR Part 381.196 or 9 CFR Part 327.4 (b) for habitual violations.  Therefore, I do not believe that the reviewer of comments adequately addressed the concerns I expressed in my January 23 comments about the FSIS audit program for foreign establishments.  My comments were not directly solely at how FSIS should treat the PRC, but at how FSIS should approach all of our trading partners.  I would like to refer you to a July 2003 report that was issued by the consumer group Public Citizen entitled, “The WTO Comes to Dinner:  U.S. Implementation of Trade Rules Bypasses Food Safety Requirements” ² to understand our concerns regarding FSIS’ equivalence process.

3.  In the case of the rule for the PRC, we have no assurances that poultry raised and slaughtered in the PRC will not be used for export to the United States unless we have USDA inspection personnel stationed in the PRC processing plants at all times.   While I did not address the issue of smuggling of poultry products from the PRC in my January 23 comments, a number of other commenters did.  Documented attempts to smuggle illegal poultry products into the United States should have provided enough reason to terminate the rule-making process.  Since the USDA chose to proceed with the rule, it is incumbent on USDA to guarantee that the PRC is living up to the letter of the rule.  Furthermore, since the rule calls for only cooked poultry to be exported to the United States, there need to be assurances that the poultry is being cooked to the proper temperature to ensure the safety of the product.  Consequently, USDA should consider stationing inspection personnel in the PRC to ensure that the requirements of the equivalence agreement are being met.

4.  The November 23, 2005 Federal Register Notice that announced the proposed rule (70 FR 70746-70749) directed commenters to the FSIS website to read the 2004 audit report prepared by FSIS inspection personnel on the PRC to understand why FSIS was recommending granting the PRC equivalence status for processed poultry products.   That report contained seven Foreign Establishment Audit Checklists.  There was no indication as to whether the establishments were slaughter or process facilities.  The narrative that accompanied the checklists indicated that three of the establishments were slaughter and four were processing facilities.³   Major food safety violations were found in four of those establishments evaluated.  I raised this issue in my January 23 comments.  The FSIS reviewer of comments dismissed my assertion arguing that most of the deficiencies were found in slaughter facilities.⁴   The fact that serious food safety violations were found in any of the processing facilities should have given FSIS pause before granting equivalence status to the PRC. 

The background to the rule indicates that between 10 and 25 processing plants in the PRC will be exporting product to the United States.  Audit reports from all of those processing establishments should have been made available so that commenters could intelligently evaluate the equivalence status of those plants.  Instead, a 2005 audit report for the PRC appeared on the FSIS website this week, as the final rule was published.⁵   The report focused on four slaughter facilities and concluded that all four facilities would have been de-listed had they been eligible to export to the U.S.

5.  The background to the proposed rule made the assertion that U.S. consumers would not be required to purchase processed poultry products from the PRC.  In my January 23 comments, I made the observation that FSIS does not have mandatory country-of-origin labeling authority, so there is no guarantee that consumers will know they are purchasing poultry products from the PRC.  In fact, during the House appropriations hearings this year, both you and Under Secretary for Food Safety Richard Raymond were asked about this issue.  As you know, if processed (cooked) poultry is sold directly to consumers in retail, then the product will be labeled as originating in the PRC. However, if the processed poultry is sold to a firm that uses it as an ingredient, there is no requirement that the final product be labeled with the poultry’s country of origin.  The FSIS comment reviewer chose not to deal with this issue claiming that it was not under FSIS jurisdiction.  If this area of policy is not under FSIS jurisdiction, why was the claim that consumers would be able to determine if poultry was processed in the PRC made as part of the proposed rule? 

6.  The narrative to the rule dismisses the fears expressed by some commenters – including my own – that our domestic processors would face increased competition from cheap imports.  The FSIS reviewer of comments contends that since there is such a small amount of product that will be imported under this rule, it will have a negligible impact on domestic processors.  Furthermore, the narrative states that it would force our domestic processors who could not compete to become more efficient.  So, one can infer from that statement that if “inefficient” operations do not change business practices, they should go out of business.  I find it disturbing that it is official government policy to use trade agreements to force “inefficient” domestic operations to shutter their doors.

It is no secret that the PRC is interested in exporting more food products to the United States.  The imports under this rule are just the beginning.  The PRC will continue to press the United States to import processed poultry raised in that country, and once they satisfy FSIS regarding the operations of their slaughter facilities, we should expect the PRC to export frozen carcasses to the United States in the future.  Out domestic poultry industry could become overwhelmed with cheap imports from the PRC.  In referring to the rule that was just approved, one Member of Congress recently stated during congressional hearings, “This is the camel putting its nose under the tent.” There needs to be more attention paid by this Administration to the implications that the trade deals we are executing will have on the domestic production system.  I am very concerned that you have just opened the floodgates to an onslaught of cheap poultry products from the PRC that are going to put our farmers and processors at a competitive disadvantage.

7.  The narrative to rule does not answer the question I posed in my January 23 comments. Will any of the processed poultry from the PRC be irradiated and, if so, will it be properly labeled?

For all of the above reasons, I believe that USDA was incorrect to grant equivalence status to the People’s Republic of China for processed poultry products.

Procedural Issues

I also have a number concerns regarding the process for the approval of this rule that I would like to raise with you.

Regardless of how much opposition you might have received to this rule, it is my impression that this was a “done deal” months ago and was scripted to achieve a political objective.  I make this statement based on the following observations:

1.     The timing for the comment period on the proposed rule came right in the middle of the Thanksgiving-Christmas holiday season.  USDA has done this before on controversial issues to minimize press exposure.  Not everyone reads the Federal Register regularly, so the vast majority of citizens were not aware of this proposal until it was too late.

2.     While the comment period closed on January 23, 2006, no action on the rule was apparent until I learned from the April 12, 2006 edition of China Daily that the deal was apparently done, in an article entitled, “Chinese Poultry to U.S., U.S. Beef to China.”  Approval of the rule was not posted in the Federal Register until April 24, 2006, but apparently through discussions with the PRC, which were not open to the public, USDA had approved the rule nearly two weeks earlier.

3.    It was obvious to everyone that the approval of the rule was timed for the visit of the PRC President Hu Jintao on April 20, 2006.  Statements made by USDA officials to the contrary were laughable.

4.    The speed with which the Office of Management and Budget (OMB) considered the rule was also astounding – the rule went in their door on April 18 and came out on April 19 – with an official announcement of the approval of the rule by FSIS on April 20 (although official publication in the Federal Register did not come until April 24).   One can only hope that proposed rules that would benefit American consumers would receive the same prompt attention by OMB that it gave to the Chinese processed poultry industry.


Should you have any questions regarding my letter, please feel free to contact me at (202) 797-6550.



Sincerely,


Wenonah Hauter
Executive Director



Cc:  Senator Saxby Chambliss
       Senator Tom Harkin
       Senator Robert Bennett
       Senator Herbert Kohl
       Congressman Robert Goodlatte
       Congressman Collin Peterson
       Congressman Henry Bonilla
       Congresswoman Rosa DeLauro
       Congressman Virgil Goode
       Congresswoman Jo Ann Emerson
       Under Secretary for Food Safety Richard Raymond
       FSIS Administrator Barbara Masters


Footnotes:

1  See http://www.usda.gov/oig/webdocs/24601-05-HY.pdf, p. i.
2 See http://www.citizen.org/documents/EQUIVALENCYFINALREPORT.PDF
3  see http://www.fsis.usda.gov/OPPDE/FAR/China/China2004.pdf, p. 8.
4  See http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/06-3889.pdf, p. 20869.
5  See http://www.fsis.usda.gov/OPPDE/FAR/China/China2005.pdf