NEW NON-TARIFF BARRIER IN THE US-IMPACT ON INDIAN EXPORTS

It is but natural that all sovereign countries in the world are concerned about the health and safety of their citizens and putting in place measures to ensure that, is their unquestionable right. That conceded, is there any justification for a country like the US to take decisions unilaterally to put many importers from other countries, especially from the third world, in difficulties by raising the bar too much. Latest to emerge is the new rule that requires every importer from other countries to register their facilities once every two years which is a laborious process. When quality and safety assurance systems like HACCP, ISO 14000, SAP etc are now available for application in all countries, is it not possible if such accreditation and inspection are insisted upon for products originating from each country? How is it possible for small scale exporters from India to go to the US and spend their time and money to deal with the bureaucratic set up there entrusted with registration. This is definitely a non-tariff barrier to put the exporters from developing countries in a disadvantage and must be referred to WTO. Here is a take on this new development which will have far reaching implication on Indian exports.

"The US may ban import of Indian food and dietary supplements if food companies fail to renew their Food and Drug Administration (FDA) registration by the end of this year.  "The US administration, over-cautious about probable acts of terrorism, has made it mandatory for all facilities that manufacture, process, pack or hold food for human or animal consumption in the US to register with the US FDA," said an official of Agricultural and Processed Food Products Export Development Authority (APEDA), a government body which overlooks exports of agri and food products in the country.  The companies will then have to renew their registration every two years to continue their shipment to the US. Food from an unregistered foreign facility would be held at the port of entry unless the FDA directs it to be moved to a secure custody.  The new rule effective January 1, 2013, can create a non-tariff barrier for Indian food products companies, which exported more than $3 billion worth of food to the US in 2011.  The fresh registration rules will be applicable to all food products, all processed and manufactured products, and animal products. Under the new Food Safety and Modernisation Act (FSMA), FDA is to establish a "reliable system" that uses third-party audits conducted either by foreign governments or other third parties to help ensure food safety for food destined for the US. It will help FDA conduct investigations and surveillance operations in response to food-related emergencies". 

There is one aspect about which food industry in India must concern itself, that is the traceability question that haunts food safety agencies world over. Probably Americans are more concerned about the logistics involved in pin pointing the source of a food poisoning episode as and when they occur in there. Present manufacturing systems currently prevalent in most countries do not allow such investigations to proceed too far when there is a blind alley while pursuing the origin and credentials of many suppliers of various ingredients used in the manufacture of a food in a particular factory. It is better Indian food industry collectively thinks about the "one step backward and one step forward" strategy to document the full particulars of immediate suppliers of raw materials and ingredients and immediate buyers of their products. If every player follows this strategy traceability becomes easier though it will take some time to complete the investigation by working through the chain so formed. APEDA which is doing an excellent job in its role as an export facilitator must address this issue more seriously.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com