The Canadian Produce Marketing Association has delivered a notice to its members advising them that Canada has created new standards for the import of spinach, lettuce and leafy greens from the United States of America.
Now U.S. exporters will be required to indicate if the product is from California or from another state. If it is from California, it must come from a signatory to the California Marketing Agreement (CMA), and the name of the handler must be indicated.
Most in the industry will be happy about this standard as it creates an incentive for CMA members to remain members. And because all large handlers are members of the CMA, presumably no one will challenge this new rule, even the U.S. government.
This is a good thing because the rule probably couldn’t withstand legal challenge.
The basic rule in international trade is that product that is legal to sell in the domestic market cannot be banned by an importing country without compelling scientific evidence. Further, such science-based restrictions must be applied to all countries, not to just one.
On the face of it, this is obviously in violation of those standards because it says that product grown in, say, Arizona, is allowed in while product grown under identical conditions in California is not. In fact, product grown in Mexico is allowed in, but product that may be grown to higher standards in California, but not by a CMA handler, would be banned.
In fact, this restriction isn’t based on what growing standards are used at all. A grower could have standards much tougher than the CMA standards and the product still wouldn’t be enterable in Canada. This is based solely on whether or not a handler has joined a voluntary agreement.
It is simply not for a foreign country to dictate to U.S. companies what voluntary agreements they should join. If the U.S. objected, the rule would almost certainly be overturned. It will probably stand, as an anomaly, only because it will remain unchallenged.
The problem is that this decision may also cloud the waters regarding what type of regulatory structure the produce industry ought to pursue.
One of the problems with voluntary Marketing Agreements is that they are not enforceable against imported produce. So whatever Canada does we will not find the U.S. requiring that Canadian or Mexican imports conform to CMA standards, because such a regulation would violate our NAFTA and WTO obligations.
This is a powerful argument for mandatory FDA regulation as this can be applied to both U.S. and imported product.