Facilitating global trade in organics
The US and the EU are brokering a trade agreement that could establish official equivalence between USDA and European Commission organic regulations

By Laura Sayre

June 16, 2004: The United States Foreign Agricultural Service (FAS) and the European Union's European Commission are working on an agreement that would take the world's two biggest organic markets a step closer to harmonized trade in certified organic products.

The two sides have been discussing the deal since June 2002, and most recently met in Washington, D.C., on May 25-27. Some observers believe the talks could draw to a close sometime this summer.

Parties at the table are the FAS, the Agricultural Marketing Service (AMS), the U.S. Trade Representative, the State Department, and—on the European side—the Agriculture Directorate-General and Trade Directorate-General. Although the talks have gone forward with little media attention, they represent a major milestone for organic agriculture at the international level.

"In the event we can conclude something, this would set a precedent; [it] would be the largest agreement of its kind," says FAS international economist Allison Thomas. Mark Manis, FAS international trade specialist and a negotiator on the talks, agrees. "The potential beauty of this deal is that it could be a win-win situation," facilitating organic exports in both directions across the Atlantic, but also increasing the number of domestic organic products by improving the availability of organic ingredients.

The key to the negotiations is to establish 'equivalence' rather than 'compliance' between the U.S. National Organic Standard and the EU organic standard, known as Regulation 2092/91. Compliance, which has been the basis for most international trade in organic products so far, refers to a situation in which one government determines that the organic certification system in use in another country meets the first country's organic standard (in other words, is fully compliant).

Equivalence is the establishment of a broader ruling that two governments' organic standards share the same fundamental objectives, although they may differ in how they meet those objectives.

Among the questions remaining to be resolved between the U.S. and the EU is whether the final outcome will be a bilateral agreement or a non-linked pair of unilateral agreements—each arrangement would have advantages and disadvantages. Also at issue is the use of antibiotics for livestock. The U.S. organic standard stipulates that if antibiotics are used to treat a sick animal, that animal must be permanently removed from the herd, whereas the EU organic rule specifies conditions for bringing the animal back into the herd after treatment. "When we began we had 35 different issues to be resolved," explains the FAS's Mark Manis. "Now we're down to one issue, but it's a big issue because the U.S. rule is very clear in this case. Antibiotics are not allowed in U.S. organic systems."

Sheldon Weinberg, an organic business consultant and a member of the World Board of the International Federation of Organic Agriculture Movements (IFOAM), said in a phone interview that he thinks the measure represents a natural step in the development of organic markets worldwide and that it should be a positive step for the organic community.

In the early years of the development of national organic standards, IFOAM argued for international compliance—a world in which discrepancies among different countries' organic standards would be gradually eliminated, producing a single definition of organic. More recently, IFOAM has advocated equivalence—the idea that national organic rules may vary in details so long as they serve the same underlying objectives.

The ultimate international goal then becomes 'harmonization,' a situation in which equivalence has been established across a large number of countries. Harmonization, Weinberg pointed out, emphasizes what organic movements have in common, rather than the ways in which they conflict.

How international trade in organics works

According to USDA National Organic Program rules, there are three routes by which imported agricultural products may be legally sold, labeled or represented as organic in the United States.

The first, and so far the most common, is for the imported product to be certified organic by a certifying agent accredited by the USDA. There are currently 93 certifying agents accredited by the USDA, 39 of which are based and/or incorporated in foreign countries. (There are six USDA-accredited certifying agencies in Canada, six in Germany, five in Italy, four in Argentina, three in the Netherlands, two in Australia, two in Switzerland, and one each in Austria, Bolivia, Brazil, Costa Rica, France, Greece, Guatemala, Israel, Peru, Spain, and Turkey.) Foreign certifiers apply to the USDA for accreditation according to the same rules governing domestic applicants.

The other two routes by which agricultural imports may be marketed as organic in the United States are via a 'recognition of conformity assessment' or an 'equivalency determination' by the USDA. A recognition of conformity assessment accepts a foreign government's ability to accredit certifying agents to the standards of the NOP. An equivalency determination—like the one in progress between the U.S. and the EU—establishes that a foreign government's organic standard meets the objectives of the NOP.

Both are undertaken at the request of foreign governments. The NOP website states that the USDA has issued recognition of conformity assessments for Denmark, New Zealand, the United Kingdom, and the Canadian provinces of Quebec and British Columbia. Conformity assessments are pending for Israel and Spain. In addition to the EU, equivalency determinations have reportedly been requested by India, Japan, Australia, and Costa Rica.

Under the existing system, exports from the United States into the European Union are subject to a multi-level regulatory process as well. The EU operates under a single organic standard (Council Regulation 2092/91), but responsibility for implementation and enforcement of that standard lies with individual EU member nations. Importers of U.S. organic products into the EU must obtain import authorizations from the applicable national government.

In addition, they must demonstrate that the products are certified to a standard equivalent to CR 2092/91, and show that the certifier has been accredited to EN 45011 or ISO 65 (two internationally-recognized guidelines for agencies handling product certification). The USDA-AMS is responsible for accrediting U.S. certifiers to ISO 65; its authority to do so has been officially recognized by Austria, Denmark, Sweden, Spain, the Netherlands, the United Kingdom, and some German states.

Other international agreements governing trade in organic agricultural products include one which allows most plant-based U.S.-certified organic products into Japan; and another which facilitates importation of certified products from eight countries (Argentina, Czechoslovakia, Hungary, Israel, New Zealand, Australia, Costa Rica, and Switzerland) into the European Union. Future equivalency determinations, according to Manis, "are definitely on the horizon."

Laura Sayre is senior writer for NewFarm.org, and may be contacted at laura.sayre@rodaleinst.org.

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