Creation of International Dairy Hygiene Standards

By Jill S. Stoffers

June 1, 2000
M.A. Project

Professor, Geza Feketekuty
Faculty Advisor, Brian Russell   
 

This paper was researched and written to fulfill the M.A. project requirement for completing the Monterey Institute of International Studies’ Master of Arts in Commercial Diplomacy. It was not commissioned by any government or other organization. The views and analysis presented are those of the student alone.

For more information about the Commercial Diplomacy program and the M.A. project requirement, please visit www.commercialdiplomacy.org.

Introduction

The harmonization of international food safety standards has significant implications for U.S. businesses and consumers. International standard setting provides opportunities to raise international standards and thus protect U.S. commercial interests and American consumers. However when harmonized standards are set lower than domestic standards, the U.S. Food and Drug Administration (FDA) can come under pressure to lower domestic health and safety regulations to international levels, which can increase liability risk for businesses and decrease protection for American consumers.  

The Codex Committee on Food Hygiene (CCFH) is currently drafting The Code of Hygienic Practice for Milk and Milk Products (Milk Code)—a set of harmonized hygiene standards for internationally traded dairy products. To date, the U.S. cheese industry has not gotten involved in the drafting process. However the Milk Code will have an immediate affect on the industry:  

• If a standard lower than the current U.S. domestic standard is adopted (and the current draft of the Milk Code is lower than the U.S. standard), the United States will at a minimum be forced to defend its higher standard in the WTO because the WTO Dispute Settlement Body (DSB) relies on Codex standards when settling international trade disputes involving food safety regulations.
• If a low standard is adopted, the United States also will come under pressure to lower its standard, and a lower standard will increase the incidence of food-born illnesses linked to cheese consumption—a significant financial and consumer confidence issue for the industry.
• If a standard equivalent to the current U.S. domestic standard is adopted, U.S. cheese producers will enjoy an advantage in international cheese markets until foreign producers can modify their production practices to conform to this high standard.

Goals

This paper is designed to demonstrate to U.S. Cheese Industry Association (USCIA) members that the costs of participating proactively in the Codex process are much less than the costs they would incur if an international standard lower than the current U.S. standard is adopted. The paper presents the history and current challenges of creating international dairy hygiene standards, as well as a description of the legal and commercial implications for the U.S. cheese industry of the Code of Hygienic Practice for Milk and Milk Products as it is currently drafted. The paper also analyzes the political, institutional, and policy aspects of the issue and provides both policy recommendations and an action strategy for USCIA members.

This paper does not address whether or not the WTO should rely on Codex to set standards, recommendations and guidelines; to what degree the U.S. should adhere to Codex standards, recommendations and guidelines; whether the WTO needs to clarify how its DSB will interpret Codex recommendations and guidelines as opposed to Codex standards; or issues of transparency within the WTO and in Codex. While these are interesting and timely questions, they are beyond the scope of this paper.

Scenario

For the purposes of this project I assume the fictitious role of assistant to the Vice President for International and Government Affairs of a fictitious industry association, the U.S. Cheese Industry Association (USCIA). I have been tasked with writing a report that 1) updates USCIA members on the status of the Codex standards, and 2) offers recommendations and a strategy for ensuring that USCIA’s interests are reflected in the Codex standards.  

I chose harmonization of dairy hygiene standards for my project topic because I am interested in food safety, dispute settlement and international harmonization of standards. As traditional barriers to trade fall, international cooperation and harmonization will become increasingly important to achieve universal goals such as food safety.

Executive Summary

Issue

The Codex Committee on Food Hygiene (CCFH) is in the process of drafting The Code of Hygienic Practice for Milk and Milk Products (Milk Code)—a set of harmonized standards for internationally traded dairy products. As currently drafted, these standards are lower than U.S. standards; they do not require pasteurization or other equivalent measures although such measures have been scientifically proven to protect consumer health. Because WTO dispute settlement panels often rely on Codex standards in settling food safety disputes, the standard as currently written could put pressure on the U.S. Food and Drug Administration (FDA) to lower its standards. Among other outcomes, this could expose the U.S. cheese industry to greater liability, increase USCIA’s lobbying costs, change commercial conditions for the industry, and decrease consumer confidence in cheese as a safe product. All of these outcomes would have a negative affect on the profitability and competitiveness of the U.S. cheese industry.

Background

The Codex Alimentarius Commission (Codex), headquartered in Rome, Italy is an international non-governmental organization that was established to promote both food safety and international trade. The World Trade Organization (WTO) recognizes Codex as the body responsible for setting international food safety standards, and it uses Codex standards as benchmarks in settling international trade disputes. According to the WTO’s Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement), nations that maintain standards higher than Codex must provide scientific justification for doing so.

For the past 15 years, the Codex Committee on Food Hygiene (CCFH) has worked continuously to harmonize international dairy hygiene standards. Progress has stalled primarily due to differences between the United States and France regarding the acceptable level of public health risk associated with raw milk products, particularly cheese. 

·       The U.S. position is that raw milk products are “potentially hazardous foods” that can support the rapid growth of toxigenic microorganisms and may pose significant public health threats. U.S. law mandates that pasteurization or equivalent processing methods be used to ensure the safety of milk products sold in the United States.

·       The French (and EU) position is that the health threats posed by these foods can be minimized through good veterinary practices and that pasteurization or other equivalent measures should not be required. EU law (which the French follow) mandates that raw milk cheese be free from harmful bacteria but does not mandate pasteurization or equivalent production methods.

Last March, in order to break this 15-year impasse between the United States and France, U.S. delegates, as well as the other CCFH members, agreed to a French proposal to first determine the end use of milk and then identify steps necessary to reduce consumer risk for these end uses. With this as the basic framework, the CCFH is currently developing international dairy hygiene standards that will be forwarded to the Codex Alimentarius Commission for adoption.

Implications for the U.S. Cheese Industry

If Codex were to adopt standards for cheese that are lower than those maintained by the United States, the FDA would come under pressure to lower its current sanitary requirements for domestically produced and imported cheese. Lower standards would expose American consumers to more food-born pathogens and would dramatically increase the U.S. cheese industry’s liability risk. Outbreaks of food-born illness related to cheese cost the U.S. cheese industry several million dollars annually. Lowered safety requirements could dramatically increase these costs.

In the past, the U.S. cheese industry has been among those most protected by the government. However new U.S. commitments in the WTO have already begun to erode this protection, and future agriculture negotiations are expected to continue if not accelerate this trend. The U.S. cheese industry must become involved in the Codex drafting process if it is to ensure that its interests will be protected in the future.

Recommendations

USCIA’s International and Governmental Affairs Department recommends that USCIA pursue a strategy to ensure that the Codex Milk Code protects the interests of the domestic cheese industry and American consumers.  

The Code should include a general principle that recognizes the health risks associated with raw milk cheese, and it should include the following standard. Annexes can be used to provide specific detail, scenarios, and exceptions. 

All ready to eat (RTE) cheese sold internationally shall be aged for no less than 60 days at a temperature of no less than 39 degrees Fahrenheit, or the milk used in cheese production shall be subject to one of the following measures: irradiation, pasteurization, sterilization, heat-treatment, or other technologies not yet developed but that achieve results comparable to these processes.

This recommendation is likely to be accepted by all CCFH member countries for several reasons:

• It includes a pasteurization or equivalent measure requirement, and therefore, will likely be acceptable to the FDA, the body that negotiates in Codex on behalf of the U.S. cheese industry.
• It fits the structure of the existing agreement and can easily be incorporated into it.
• It is based on scientific evidence.
• It is pragmatic; it allows multiple options to meet the standard and even allows for exceptions.
• It does not affect domestic cheese production for domestic sale in any country.
• It mirrors existing U.S. law and has support from the U.S. government, most of the U.S. industry, and U.S. NGOs.

The current listeriosis[1] outbreak in France has increased the likelihood that France will accept a pasteurization or equivalent measure standard as part of the Code. The outbreak has heightened public awareness of the potential dangers of raw dairy products and increased public calls for the government to take steps to protect the French population. 

U.S. Codex delegates are well positioned to shape international dairy hygiene standards; as the lead drafting country, the United States is charged with structuring the Milk Code and creating drafts.

Strategy

USCIA has developed a three-part strategy for ensuring that the Codex Alimentarius Commission (CAC) adopts the standard outlined above.

• The first part is designed to secure U.S. industry or government support for a pasteurization or equivalent measure standard.
• The second and largest part of the strategy focuses on ensuring that the French will accept the standard. By providing the French citizenry with information on listeria and other harmful bacteria commonly present in cheese, USCIA can build on the momentum created by the French public’s concerns about listeria.
• The third part of the strategy is designed to garner support among other Codex delegates who serve on the CCFH and have a substantial interest in ensuring that Codex adopts high dairy hygiene standards.

USCIA should implement this strategy immediately after receiving approval from its members. The goal should be to get the CCFH, at its next (October 2000) meeting, to unanimously agree to the recommended standard and to incorporate it into the Code of Hygienic Practice for Milk and Milk Products. The standards could then be forwarded to the full CAC for adoption at its July 2001 meeting.  

If this timeline cannot be met, USCIA recommends that the standard be incorporated into the Code as soon as possible and that the full set of standards be forwarded to the CAC for approval in July 2003. The costs for a one-year strategy are estimated at $575,000; a three-year strategy will cost an estimated $900,000. This is a relatively small price to pay to ensure that U.S. industry interests are satisfied in the Codex international dairy hygiene standards. USCIA will not ask for additional funding, but will draw this money from annual membership dues.

Conclusion

The timing is right for USCIA to take a proactive role in the creation of Codex dairy hygiene standards:

• The standards are currently being drafted.
• U.S. Codex delegates are well positioned to influence the drafting process.
• The listeria outbreak in France has opened a window of opportunity to overcome French opposition.
• A proactive approach will be less costly to the industry than a reactive one.
   

Background

Agreement on the Application of Sanitary and Phytosanitary Measures

Rules for trade in agriculture and food products were incorporated into the General Agreement on Tariffs and Trade (GATT) for the first time as part of the Uruguay Round (UR) of multilateral trade negotiations (1986-1993). In order to ensure that these newly negotiated agricultural tariff reductions would not be circumvented by the establishment of non-tariff, standards measures, the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) was also negotiated.[2]  The SPS Agreement imposes discipline on how member countries may restrict trade in order to protect human, animal and plant populations, yet it also reaffirms a member’s sovereign right to protect human, animal and plant life or health at the level it considers appropriate. The most important features of the Agreement are: 

•  Sound Scientific Evidence
   
  Under the SPS Agreement, any protective measure must be “based on scientific principles and . . . not maintained without sufficient scientific evidence . . . .”[3] Scientific evidence can take the form of either a risk analysis or adherence to an international standard.[4] When scientific evidence is insufficient, a member may adopt a provisional measure based on the best information available. The provisional measure must be temporary and the information for an objective risk assessment must be obtained within a reasonable period of time.[5]
   

• Risk Assessment
  Protective measures must also be shown to be “based on an assessment, as appropriate to the circumstances, of the risks to human, animal, or plant life or health, taking into account risk assessment techniques developed by the relevant international organizations.”[6] While each country is allowed to decide how to conduct its own risk assessments, Articles 5.2 and 5.3 of the Agreement contain scientific and economic factors, respectively, which must be taken into account during all assessments. Codex Alimentarius delegates and other experts are currently developing risk assessment methodologies in an attempt to standardize them.
   

• Appropriate Level of Protection
  Once science provides evidence of the need to protect against risk, a country is also allowed to decide for itself what measure will best protect its population. Such decisions involve determining an “acceptable level of risk,” or the amount of risk to which the government believes its population can safely be exposed. The determination remains within the sovereign discretion of each member country and can be based on a country’s societal values. It does not need to be based on scientific evidence. [7] Articles 5.4 and 5.5 provide only a few conditions for establishing the appropriate level of protection. For example, a country “should . . . take into account the objective of minimizing negative trade effects” and “shall avoid arbitrary or unjustifiable distinctions in the levels it considers to be appropriate in different situations, if such distinctions result in discrimination or a disguised restriction on international trade.”[8]
  

• Higher Level of Protection
  After a risk assessment, a country is free to adopt a higher level of protection than the international standard or the standard adopted by its trading partners: 1) if there is scientific justification or; 2) as a consequence of the level of protection a country determines to be appropriate to protect its population.[9] The burden of proof for justifying a standard is on a country that adopts a higher standard; it must show that a lower standard would not provide the appropriate level of protection.
  

• International Harmonization
  The SPS Agreement encourages harmonization of sanitary and phytosanitary measures “on as wide a basis as possible”[10] based on the standards, recommendations, and guidelines of three organizations: the Codex Alimentarius Commission (for food standards); the International Office of Epizootics (for animal standards); and the international and regional organizations operating within the framework of the International Plant Protection Convention (for plant standards).[11] Harmonization is defined as the “establishment, recognition, and application of common sanitary and phytosanitary measures by different Members.”[12]  
  

• Equivalence
  Uruguay Round negotiators recognized that countries would not always be willing to accept full standards harmonization, so they negotiated an equivalency provision. Article 4 of the SPS Agreement says that a country must accept as equivalent the measure of another country that provides the same level of protection. Equivalency determinations are to be based on science and must be verifiable through inspection, testing and other procedures.[13]
  

• Transparency
  Countries must make known their sanitary and phytosanitary measures. They must publish for notice and comment any proposed regulation that is not based on an international standard and that may have a significant effect on trade; they must notify other countries of the product coverage and must explain the objective and rationale of a proposed regulation.[14] There must be a delay between the publication of a final regulation and its effective date so that producers have time to adapt to the new rule.
  

• Committee on Sanitary and Phytosanitary Measures
  Article 12 of the SPS Agreement established a Committee on Sanitary and Phytosanitary Measures to implement the Agreement. The Committee monitors the harmonization and use of standards, provides a regular forum for consultations, encourages the use of international standards, and acts as an intermediary in disputes. The Committee must promote and encourage the use of harmonized standards through the international bodies identified in the Agreement. It also must maintain close contact with these bodies to ensure that harmonization is proceeding and to avoid unnecessary duplication of efforts. [15]

Footnotes

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