Canada’s meat processors, packers and suppliers are the latest businesses to echo the trucking industry’s serious concerns with the U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service’s (APHIS) inspection fee hikes.
The proposed increases to the agricultural quarantine inspection (AQI) fee – which apply to every truck crossing the border regardless of whether the shipments contains agriculture products or wood pallets or not – could be as high as 200 percent.
Like the Canadian Trucking Alliance, the Canadian Meat Council (CMC) has filed a submission with USDA, expressing “significant concerns” with the proposed change to the AQI fee structure.
CMC says it supports government programs that are necessary to prevent the transmission of pests, diseases and food-borne pathogens. However, it says “setting excessive fee increases without consideration of the impacts on industry, or without seeking ways to more effectively and efficiently deploy its resources for better risk assessment and targeting, is troublesome.”
It points out the Canadian meat industry is subject to duplicative U.S. government controls and fees at the border. On top of the APHIS program, Canadian trucks carrying meat shipments must also report to a privately-owned “inspection house” where USDA’s Food Safety and Inspection Services (FSIS) select a portion of the shipment for inspection. The fees are set by the private inspection house.
“The economic trend in the meat industry is not very healthy at present and increasing user fees under the AQI program will not improve the situation. In our view, the impact of the proposed AQI fee increases will exacerbate the production costs and burdens on cross-border trade for both Canadian suppliers and their U.S. customers,” CMC executive director James Laws stated in the submission.
“The regulatory proposal is based on a costing methodology – nothing more – to align fees with actual program costs. When fees are imposed on the basis of full cost recovery, not only is there an absence of recognition of the substantive public good or public health benefit that can derive from the program, there is an absence also of financial incentive for government authorities to fulfill the program in the most cost-effective manner.”
CMC also points out the proposed changes to the AQI fee structure also “run counter to the shared vision” of both federal governments as reflected in the Beyond the Border Action Plan and the Regulatory Cooperation Council (RCC).
“Both initiatives aim to advance our shared interests in economic competitiveness through enhanced perimeter security as well as strengthened regulatory alignment and cooperation.”
APHIS is urging USDA to reconsider its regulatory proposal and to “consult on the basis of the trusted trader principles as championed by both the Canadian and the United States in the Beyond the Border Action Plan.”
Earlier this week, CTA released a legal opinion from the Gowlings legal firm which finds the APHIS fees are “inconsistent” with NAFTA General Agreement on Tariffs and Trade (GATT).