[Federal Register Volume 84, Number 217 (Friday, November 8, 2019)]
[Rules and Regulations]
[Pages 60318-60324]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-24234]
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DEPARTMENT OF AGRICULTURE
Food Safety and Inspection Service
9 CFR Part 327
[Docket No. FSIS-2016-0002]
RIN [0583-AD64]
Eligibility of the People's Republic of China (PRC) To Export to
the United States Poultry Products From Birds Slaughtered in the PRC
AGENCY: Food Safety and Inspection Service, USDA.
ACTION: Final rule.
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SUMMARY: The Food Safety and Inspection Service (FSIS) is amending the
Federal poultry products inspection regulations to add the People's
Republic of China (PRC) as eligible to export to the United States
poultry products from birds slaughtered in the PRC. FSIS has reviewed
the PRC's poultry laws, regulations, and inspection system, as
implemented, and has determined that they are equivalent to the Poultry
Products Inspection Act (PPIA), the regulations implementing this
statute, and the United States' food safety system for poultry. Under
this final rule, slaughtered poultry, or parts or other products
thereof, processed in certified PRC establishments, are eligible for
export to the United States. All such products are subject to
reinspection at United States ports of entry by FSIS inspectors.
DATES: Effective December 9, 2019.
FOR FURTHER INFORMATION CONTACT: Roberta Wagner, Assistant
Administrator, Office of Policy and Program Development, Food Safety
and Inspection Service, U.S. Department of Agriculture, 1400
Independence Avenue SW, Washington, DC 20250-3700; Telephone: (202)
205-0495.
SUPPLEMENTARY INFORMATION:
Background
On June 16, 2017, FSIS published a proposed rule in the Federal
Register (82 FR 27625) to amend FSIS's poultry products inspection
regulations to list the PRC as eligible to export to the United States
poultry products from birds slaughtered in the PRC. FSIS proposed this
action after the Agency conducted a documentary review of the PRC's
laws, regulations, and poultry slaughter inspection system, as well as
an in-country audit of the system, and determined that it is equivalent
to the U.S. system established under the Poultry Products Inspection
Act (PPIA) and its implementing regulations. This final rule is
consistent with the provisions of the proposed rule.
The PRC is already eligible to export processed poultry products to
the United States if the products are derived from poultry slaughtered
in the United States or in other countries with a poultry slaughter
inspection system equivalent to that of the United States. Under this
final rule, the PRC is eligible to export to the United States poultry
products derived from birds slaughtered in the PRC. The PRC may not
export raw poultry at this time because of restrictions owing to animal
disease risk put in place by the USDA Animal and
[[Page 60319]]
Plant Health Inspection Service (APHIS). Regarding processed poultry,
the PRC may only export Fully Cooked-Not Shelf Stable products, because
FSIS has only assessed information and audited the government controls
for the production of products under this processing category.\1\ The
PRC would need to submit additional information for FSIS to review, and
would likely need to undergo an additional audit before FSIS would
allow the PRC to export other processed poultry products to the United
States.
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\1\ See FSIS Product Categorization guide, available at: https://www.fsis.usda.gov/wps/wcm/connect/abbf595d-7fc7-4170-b7be-37f812882388/Product-Categorization.pdf?MOD=AJPERES.
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As explained in the proposed rule, under the PPIA and implementing
regulations, poultry and poultry products imported into the United
States must be produced under standards for safety, wholesomeness, and
labeling that are equivalent to those of the U.S. system (21 U.S.C.
466). Section 381.196 of Title 9 of the Code of Federal Regulations
(CFR) sets out the procedures by which foreign countries may become
eligible to export poultry and poultry products to the United States.
Paragraph 381.196(a) requires that the standards of a foreign
country's poultry inspection system, its legal authority for the
inspection system, and the regulations implementing the system must be
equivalent to those of the United States. These requirements include:
(1) Ante-mortem and post-mortem inspection performed or supervised by a
veterinarian; (2) national government controls over establishment
construction, facilities, and equipment; (3) verification of
slaughtering of poultry and processing of poultry products by
inspectors to ensure that product is not adulterated or misbranded; (4)
separation of establishments certified to export from those not
certified; (5) maintenance of a single standard of inspection and
sanitation throughout certified establishments; (6) requirements for
sanitation and for sanitary handling of product at certified
establishments; (7) controls over condemned product; (8) a Hazard
Analysis and Critical Control Point (HACCP) system; and (9) any other
requirements under the PPIA and its implementing regulations (9 CFR
381.196(a)(2)(ii)).
The country's inspection program must also impose requirements
equivalent to those of the United States with respect to: (1)
Organizational structure and staffing in certified establishments to
ensure uniform enforcement of laws and regulations; (2) national
government control and supervision over the official activities of
employees or licensees; (3) qualified inspectors; (4) enforcement and
certification authority; (5) administrative and technical support; (6)
inspection, sanitation, quality, species verification, and residue
standards; and (7) any other inspection requirements (9 CFR
381.196(a)(2)(i)).
Evaluation of the PRC's Poultry Inspection System
In 2004, at the request of the PRC, FSIS conducted a document
review of the PRC's poultry (slaughter and processing) inspection
system, concluding that the PRC's laws, regulations, control programs,
and procedures were equivalent to those of the United States. FSIS
proceeded with an on-site audit to verify that the PRC's General
Administration of Quality Supervision, Inspection, and Quarantine
(AQSIQ), which was the PRC's central competent authority (CCA) in
charge of food inspection, had effectively implemented a poultry
inspection system equivalent to that of the United States.\2\ However,
FSIS identified problems involving sanitation, slaughter, processing,
residue controls, supervision, and enforcement. In 2005, FSIS conducted
a follow-up on-site audit and concluded that the PRC had satisfactorily
addressed the previous audit findings for poultry processing only.
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\2\ Since FSIS completed its preliminary determination regarding
equivalence of the PRC's poultry inspection system, the PRC has
reorganized and renamed its CCA, now organized under the General
Administration of Customs of the People's Republic of China. This
reorganization has no substantive impact on FSIS' determination of
equivalence.
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In 2006, FSIS published a final rule in the Federal Register making
the PRC eligible to export poultry products to the United States, but
only from birds slaughtered under Federal inspection in the United
States or other countries eligible to export slaughtered poultry
products to the United States (71 FR 20867, April 24, 2006). Shortly
after the publication, Congress prohibited FSIS from allowing poultry
products to be imported from the PRC (see Sec. 733 of Pub. L. 110-161).
In 2009, Congress removed this prohibition.
In June 2010, FSIS experts traveled to the PRC to collect
information related to legislation applicable to the country's poultry
inspection system, including the PRC's 2009 Food Safety Law. In
December 2010, FSIS conducted separate but concurrent on-site audits of
the PRC's poultry slaughter and processing inspection systems. FSIS
reviewed the effectiveness of the PRC's food safety program based on
whether the following equivalence components were addressed
satisfactorily with respect to standards, activities, resources, and
enforcement: (1) Government Oversight (e.g., Organization and
Administration); (2) Government Statutory Authority and Food Safety and
Other Consumer Protection Regulations (e.g., Inspection System
Operation, Product Standards and Labeling, and Humane Handling); (3)
Government Sanitation; (4) Government HACCP Systems; (5) Government
Chemical Residue Testing Programs; and (6) Government Microbiological
Testing Programs.
The auditors concluded that the PRC was able to meet the principal
requirements for the equivalence components of Government Sanitation
and Government Chemical Residue Programs. However, FSIS identified
systemic inadequacies in both the slaughter and processed poultry
inspection systems regarding the other four equivalence components. For
example, FSIS found that the CCA lacked a standardized method to assign
inspection personnel to slaughter facilities and also utilized
establishment-paid inspectors to conduct official inspection duties.
The CCA responded by developing a comprehensive corrective action plan
addressing the findings.
In March 2013, FSIS conducted follow-up on-site audits to verify
whether the PRC had implemented the corrective actions proffered in
response to the previous audit findings. Based on the audit findings,
FSIS concluded that the PRC's processed poultry inspection system was
equivalent to the U.S. system and announced that the PRC could export
processed poultry products to the United States. However, FSIS also
found that the CCA had not adequately addressed all of FSIS's concerns
about its poultry slaughter inspection system. Specially, the CCA still
lacked a standardized method to assign inspection personnel to
slaughter facilities on the basis of objective measurements. The CCA
responded to these concerns, stating that it would implement changes to
its poultry slaughter inspection system.
In May 2015, FSIS conducted an on-site audit to verify whether the
CCA adopted the necessary corrective measures to its poultry slaughter
inspection system. Based on the audit, FSIS concluded that the PRC had
satisfactorily addressed all issues of concern that FSIS had raised in
its 2013 audit of the PRC poultry slaughter
[[Page 60320]]
inspection system and had met the FSIS equivalence criteria for all six
components.
On August 21, 2014, FSIS published the final rule Modernization of
Poultry Slaughter Inspection (79 FR 49566). The rule created regulatory
changes that apply to all poultry slaughter establishments and
established a new optional post-mortem inspection system, the New
Poultry Inspection System (NPIS). On August 11, 2016, the PRC sent a
letter to FSIS outlining the changes that were made to the PRC's
poultry inspection system to achieve equivalency with the new U.S.
regulations. These included requirements that establishments have
procedures to ensure that carcasses with visible fecal contamination do
not enter the chiller and prerequisite programs to prevent
contamination of carcasses and parts by enteric pathogens and visible
fecal material. The PRC also stated in the letter that it had adopted
the U.S. requirements for NPIS. On September 1, 2016, the PRC sent
copies of its updated inspection manuals to FSIS. The letter and the
relevant portions of the inspection manuals are available at:
www.fsis.usda.gov/wps/portal/fsis/topics/regulations/federal-register/proposed-rules. FSIS reviewed the submitted letter and updated manuals
and determined that the PRC's poultry slaughter inspection system is
equivalent to the U.S. system in regard to the Modernization of Poultry
Slaughter Inspection requirements.
Consequently, on June 16, 2017, FSIS published a proposal to find
that the PRC's poultry slaughter inspection system is equivalent to the
United States' system and, therefore, to remove from the regulations
the limitation that the products must originate from birds slaughtered
under Federal inspection in the United States or in a country eligible
to export slaughtered poultry products to the United States. For more
detailed information on FSIS's evaluations of the PRC's poultry
inspection system see the proposed rule (82 FR 27625) and for the full
audit reports, go to: http://www.fsis.usda.gov/wps/portal/fsis/topics/international-affairs/importing-products/eligible-countries-products-foreign-establishments/foreign-audit-reports.
In November 2018, FSIS conducted an audit of PRC's poultry
inspection system, reviewing the inspection and regulation by the PRC
of both poultry processing and slaughter. FSIS identified no
significant problems and the PRC poultry inspection system was again
found to be equivalent. FSIS will publish the findings from this audit
in the future.
Final Rule
After considering the comments received on the proposed rule,
discussed below, FSIS concludes that the PRC's poultry inspection
system is equivalent to the United States' inspection system for
poultry and poultry products. Therefore, FSIS is amending its poultry
products inspection regulations to permit imports from the PRC of
poultry products, derived from birds slaughtered in the PRC (9 CFR
381.196(b)). Under FSIS's import regulations, the PRC must certify to
FSIS that those establishments that wish to export poultry product to
the United States are operating under requirements equivalent to those
of the United States (9 CFR 381.196(a)).
Although a foreign country may be listed in FSIS regulations as
eligible to export poultry products to the United States, the exporting
country's products must also comply with all other applicable
requirements of the United States, including those of APHIS. These
requirements include restrictions under 9 CFR part 94 of APHIS's
regulations, which regulate the export of poultry products from foreign
countries to the United States to control the spread of specific animal
diseases.
Also, under this final rule, all poultry and poultry products
exported to the United States from the PRC will be subject to
reinspection by FSIS at United States ports of entry for, but not
limited to, transportation damage, product and container defects,
labeling, proper certification, general condition, and accurate count.
FSIS also will conduct other types of reinspection activities, such as
sampling and testing product to detect any drug or chemical residues or
pathogens that may render the product unsafe or any species or product
composition violations that would render the product economically
adulterated. Products that pass reinspection will be stamped with the
official mark of inspection and allowed to enter U.S. commerce. If they
do not meet U.S. requirements, they will be refused entry and within 45
days will have to be returned to the country of origin, destroyed, or
converted to animal food (subject to approval of the Food and Drug
Administration (FDA)), depending on the violation. The import
reinspection activities can be found on the FSIS website at: http://www.fsis.usda.gov/wps/portal/fsis/topics/international-affairs/importing-products/port-of-entry-procedures.
Under current congressional appropriations,\3\ poultry products
permitted for importation under this final rule may not be used in the
school lunch program under the Richard B. Russell National School Lunch
Act (42 U.S.C. 1751 et seq.), the Child and Adult Care Food Program
under section 17 of such Act (42 U.S.C. 1766), the Summer Food Service
Program for Children under section 13 of such Act (42 U.S.C. 1761), or
the school breakfast program under the Child Nutrition Act of 1966 (42
U.S.C. 1771 et seq.). In addition, poultry products from birds
slaughtered in the PRC will be eligible for importation into the United
States only if they are from animals slaughtered on or after the
effective date of this final rule.
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\3\ See Section 749, Consolidated Appropriations Act, 2019,
Public Law 116-6, enacted February 15, 2019.
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Finally, within one year of the effective date of this final rule,
FSIS will conduct an ongoing equivalence audit of the PRC's poultry
inspection system. During the audit, FSIS auditors will verify that the
PRC's CCA has implemented its food safety inspection system as
described in the Self-Reporting Tool and supporting documentation. FSIS
auditors will visit government offices, establishments, and
laboratories to verify that the CCA has implemented its inspection
system as documented and verify that the country's system of controls
remains equivalent to the U.S. inspection system. FSIS will be
conducting such audits for all newly equivalent countries within one
year of the effective date of the final rules granting equivalence.
This policy results from an Agency response to a September 2017 audit
of FSIS equivalence processes by the USDA Office of Inspector General
(Evaluation of Food Safety and Inspection Service's Equivalency
Assessments of Exporting Countries: Audit Report 24601-0002-21).
Summary of Comments and Responses
FSIS received 96 comments from trade associations representing meat
and poultry processors, consumer interest groups, a foodborne illness
research center, a large food-processing corporation, and individual
consumers. Comments from the meat and poultry industry and two
individual consumers supported the proposed rule. Comments from the
consumer interest groups and most individual consumers opposed the
proposal. The following is a brief summary of the relevant issues
raised in the comments and FSIS's responses.
[[Page 60321]]
Comment: Two consumer interest groups and many individual consumers
opposed the rule because of reported outbreaks of avian influenza in
the PRC. A consumer interest group stated that even if cooking killed
the avian influenza virus, consumers should not have to consume poultry
from birds that were sick.
Response: To export poultry products to the United States,
countries need to meet APHIS requirements for animal disease prevention
and control. APHIS uses several methods to ensure that harmful animal
diseases do not enter the United States. These include actively
monitoring the animal disease status of foreign countries and
maintaining lists of countries and regions considered to be free (or
not free) of certain diseases. If an animal disease is found to exist
in a country (or a region within a country) that exports meat, poultry,
or egg products to the United States, APHIS requires specific
processing steps to ensure that any product from that country or region
will not cause the disease to be transmitted to the United States (see
9 CFR part 94).
In addition to these monitoring and processing provisions, APHIS
requires imported meat, poultry, and egg products to have accompanying
documentation regarding their origin, animal disease status, degree of
processing, and intended use. At the U.S. border, Customs and Border
Protection (CBP) officials verify that such documentation is accurate
and that the products do not pose an animal disease transmission risk.
These steps take place before FSIS reinspects imported product for food
safety and other regulatory compliance. All meat and poultry products
that APHIS restricts from entering the United States because of animal
disease concerns will be refused entry by CBP.
As FSIS explained in the proposed rule, APHIS has classified China
as a region where highly pathogenic avian influenza (HPAI) exists.
APHIS also does not currently list the PRC as a region free of Exotic
Newcastle Disease. Therefore, before a shipment of poultry products may
be presented for FSIS reinspection at the port of entry, it must have
been processed in a manner sufficient to inactivate these viruses if
they were present in the meat, in accordance with APHIS requirements at
9 CFR 94.6. FSIS reinspection of this imported poultry, in addition to
the equivalent PRC inspection system, ensures that the product is
otherwise safe, wholesome, and unadulterated.
Any poultry intended for export to the United States from certified
establishments in the PRC will be subject to ante-mortem and post-
mortem inspection (see 9 CFR part 381, subparts J and K), and will be
subject to reinspection at United States ports of entry for any
conditions which may render the product adulterated or misbranded.
Comment: Individuals and consumer interest groups opposed to the
rule questioned whether FSIS can ensure that poultry slaughtered in the
PRC will be safe for consumption in the United States. Many individual
commenters, three consumer interest groups, and a foodborne illness
research center argued that the PRC cannot ensure that their poultry
products are safe, because the PRC has produced and exported unsafe
products in the past. These commenters were concerned that
establishments in the PRC would use antibiotics and chemicals that are
banned in the United States; poultry products would contain antibiotic
resistant pathogens and harmful residues; similar standards of
sanitation would not be maintained; or the products would not be
properly labeled. Two consumer interest groups and a few individuals
stated that on-site audits would not ensure that exporting
establishments meet U.S. requirements. A consumer interest group
questioned how the PRC will ensure that each province consistently
enforces food safety requirements since the PRC is such a large
country. Another such group was concerned that the PRC would certify
establishments that do not meet U.S. requirements. One individual
expressed concern that residues of a certain type of antibiotic would
remain in products.
Response: FSIS has determined that this rule will not adversely
affect human health. FSIS explained in a 2006 proposed rule, and again
in 2013, its determination that the poultry processing system in the
PRC is equivalent to the United States' system. Under FSIS's
regulations, initial eligibility to export poultry products to the
United States depends on the results of FSIS's documentary reviews and
on-site audits of a foreign poultry inspection system. Once the country
becomes eligible to ship product to the United States, it is required
to continue to submit such documents and other information related to
the foreign inspection system as FSIS may find necessary to determine a
foreign country's eligibility (9 CFR 381.196(a)(2)(iii)).
During these reviews and audits, FSIS verifies that foreign
inspection systems: Have in place a chemical residue control program
that is organized by the national government; include random sampling
of chemical residues, including veterinary drugs, identified by the
exporting country or by FSIS as potential contaminants; and employ
methods to deter recurrence of chemical residue violations. FSIS
reviewed the PRC's chemical residue program and found that it met
FSIS's equivalence criteria. In addition, once the country begins
shipping product, the product is subject to reinspection, which
includes periodic testing for residues.
Under the regulations, only those establishments that an official
of the PRC's poultry inspection system certifies as fully complying
with requirements equivalent to the provisions of the PPIA and the
regulations issued thereunder will be eligible to export to the United
States. As with other countries that FSIS has found equivalent, the PRC
may certify any poultry establishment within its territory. The PRC
will be required to renew these certifications annually (9 CFR
381.196(a)(3)). The PRC is required to ensure that certified
establishments separate, by time or space, product destined for export
to the United States from product intended for distribution
domestically. All establishments certified by the PRC are subject to
review by FSIS, which may terminate the eligibility of an
establishment, if it does not comply with FSIS equivalence regulations
or if current information about the establishment cannot be obtained (9
CFR 381.196(a)(3)). All certified establishments and records relevant
to their certification and operation will be available for on-site and
documentary audits by U.S. officials.
The regulations also require that a foreign inspection system, such
as that of the PRC, maintain a program to ensure that the requirements
equivalent to those in the United States are met. Specifically, the
regulations require that a representative of the foreign inspection
system periodically visit each establishment certified as complying
with requirements equivalent to those of the PPIA and implementing
regulations. The regulations also require that this representative
prepare written reports documenting findings concerning compliance with
requirements equivalent to those of the poultry inspection system in
the United States (9 CFR 381.196(a)(2)(iv)). FSIS will evaluate these
reports during audits.
Furthermore, each consignment of poultry products exported to the
United States from a foreign country must be accompanied by a foreign
inspection certificate that certifies that the products: Are sound,
healthful, wholesome, clean and otherwise fit for
[[Page 60322]]
human food; are not adulterated and have not been treated with and do
not contain any dye, chemical, preservative, or ingredient not
permitted by FSIS's regulations; have been handled only in a sanitary
manner in the foreign country; and are otherwise in compliance with
requirements at least equal to those in the PPIA and FSIS's regulations
(9 CFR 381.197). Thus, a representative of the Chinese government must
certify that the product is not adulterated, does not contain harmful
ingredients, and has undergone adequate cooking and processing, as
necessary.
In addition to evaluating the PRC's eligibility and performing
ongoing audits to ensure that products shipped to the United States are
safe, wholesome, and properly labeled and packaged, every shipment of
poultry products exported to the United States from the PRC will be
subject to reinspection at points of entry for transportation damage,
labeling, proper certification, general condition, and accurate count.
Other types of inspection will be conducted regularly, including
testing for pathogens, residues, and species.
Products that pass reinspection will be stamped with the official
mark of inspection and allowed to enter U.S. commerce. If they do not
meet U.S. requirements, they will be refused entry and must be re-
exported, destroyed, or converted to animal food. Imported poultry
products are to be treated as domestic product upon entry into the
United States.
Comment: Many individual commenters stated that they preferred to
purchase only domestically produced poultry products. Other individuals
and two consumer interest groups expressed concern that poultry
products from the PRC would not be subject to labeling requirements
indicating the country of origin.
Response: All poultry product imports are required to bear on the
container in which they are shipped and their immediate container the
name of their country of origin, as well as the number assigned by the
foreign meat inspection system to the establishment in which they were
prepared (9 CFR 381.205-.206). When an imported product is further
prepared or processed, the labeling requirements for the resultant
product are the same as for domestic product. The addition of a
country-of-origin labeling statement is not required by FSIS on
further-processed product, although the Agency would approve product
labels with the original country-of-origin statement if they are
truthful and not misleading and meet all of FSIS's labeling
requirements.
Comment: Several individuals expressed a general concern about on-
farm practices in China regarding animal raising and feed. Other
individuals believed that poultry from the PRC would not be treated
humanely.
Response: FSIS is not authorized to mandate production practices on
farms, either domestically or as a condition of permitting imports from
foreign countries. FSIS regulates the safety of poultry products
through its regulatory requirements that apply to slaughter and
processing facilities, as well as products in commerce. These include
HACCP, sanitation controls, ante- and post-mortem inspection by
government inspectors, residue sampling, and Salmonella and
Campylobacter performance standards, all of which are included in the
evaluation process for foreign country equivalence.
Poultry are not subject to the Humane Methods of Slaughter Act
(HMSA) of 1978 (7 U.S.C. 1901, et seq.), which requires that humane
methods be used for handling and slaughtering livestock. FSIS requires,
however, that poultry be handled in a manner that is consistent with
good commercial practices, which means they should be treated humanely
(see 70 FR 56624, September 28, 2005, Treatment of Live Poultry Before
Slaughter). FSIS verified that the PRC implements good commercial
practices equivalent to those required in domestic establishments.
Comment: A few individuals and a consumer interest group opposed to
the rule questioned the timing of the publication of the proposed rule.
These commenters argued that FSIS only determined that the PRC was
equivalent to re-open U.S. trade of beef products with the PRC. A
consumer interest group questioned whether a particular foreign
establishment would be certified because it sponsored trips for foreign
officials. Several commenters who supported the rule argued that FSIS
conducted a rigorous and lengthy assessment of the PRC's poultry
inspection system. These commenters also argued that the proposed rule
was consistent with U.S. international trade obligations.
Response: FSIS made its equivalence determination based on sound
science, and in accordance with international obligations of the United
States. The PPIA and the World Trade Organization's Sanitary and
Phytosanitary Measures Agreement provide that countries with equivalent
inspection systems may export poultry products to the United States. As
FSIS explained in the proposed rule, the Agency reviewed the PRC's
laws, regulations, and poultry slaughter inspection system as
implemented before determining that the PRC's poultry slaughter
inspection system is equivalent to the United States' system.
Comment: Many individuals and a consumer interest group expressed
support for U.S. domestic poultry production, with an emphasis on
local, free-range, poultry. A few commenters were concerned that the
PRC would export a large amount of poultry products, resulting in
negative effects on domestic poultry producers. One individual asked
which domestic industry segments were unlikely to be competitive due to
lower labor costs in the PRC. However, comments from the poultry
industry argued that the proposed rule would not have a significant
impact on their business because the United States is the largest and
most efficient poultry producer in the world and has a comparative
advantage due to access to cheap, high-quality feed and birds.
According to these comments, the United States is also a technological
leader in poultry genetics and breeding, feed-compounding, and animal
health practices.
Response: As explained in more detail in the economic impact
analysis below, FSIS believes the domestic poultry industry will be
competitive with poultry from the PRC. Recently, labor costs in the PRC
have been rising, which together with high feed costs have pushed the
wholesale price of chicken in the PRC to be higher than in the United
States. FSIS also does not believe that this rule will adversely affect
the U.S. poultry industry, because the volume of trade that results
from this rule will likely be small and have little effect on supply
and prices.
Comment: One consumer interest group questioned whether FSIS was
interacting with the correct PRC government agency. Another such group
asserted that FSIS should not find the PRC equivalent because it
operated parallel systems for domestic poultry products and products
intended for export.
Response: FSIS's equivalence regulations require that before
permitting poultry product imports from a foreign country, it find that
the country's poultry inspection system complies with requirements
equivalent to the PPIA and its implementing regulations, with respect
to establishments preparing products for export to the United States (9
CFR 381.196(a)). While FSIS was evaluating the PRC's food safety system
for poultry exports, that system was administered
[[Page 60323]]
by AQSIQ, the PRC's CCA at that time, in charge of food inspection and
implementing a poultry inspection system equivalent to that of the
United States. As noted above, the PRC's General Administration of
Customs has taken over the functions of the prior CCA, but the
reorganization did not result in substantive changes to the PRC's
inspection system. The China Food and Drug Administration is
responsible for food safety for domestically produced poultry products.
As described above, FSIS has conducted a rigorous, comprehensive review
of the Chinese food safety system and will continue to verify that the
PRC maintains an equivalent inspection system through document review,
systems audits, and reinspection of each shipment of poultry from the
PRC.
Comment: Two consumer interest groups stated that an establishment
in the PRC audited by FSIS was reported in the media as running at
higher line speeds than those permitted under FSIS's poultry inspection
system. One of these groups asserted that FSIS had only audited the way
in which the PRC planned to run its inspection system, instead of
observing the system in operation.
Response: As stated in the 2015 audit report, FSIS observed the
audited establishments in operation, including the establishment
referred to by these commenters. The audit included verification of
adequate line speeds, as documented in FSIS's audit report. The PRC's
system, as documented and observed, includes line speeds that comply
with FSIS's requirements. After the final rule publishes, if the
establishment mentioned in these comments is certified by the PRC, it
must operate at line speeds in conformance with the inspection system
FSIS reviewed and determined equivalent when producing product intended
for export to the United States.
Comment: A consumer interest group questioned why a document on
FSIS's website was not fully translated.
Response: The document the commenter referred was posted as
supporting document to the proposed rule and is available here: https://www.fsis.usda.gov/wps/portal/fsis/topics/regulations/federal-register/proposed-rules. It relates to the PRC's compliance with FSIS's final
rule, Modernization of Poultry Slaughter Inspection (79 FR 49565,
August 21, 2014). It is completely translated by AQSIQ, except for a
short introductory letter, which does not affect the content.
Comment: Commenters also raised concerns regarding Chinese labor
practices and working conditions, the use of a certain pesticide in the
United States, greenhouse gasses produced by agricultural activities,
and FSIS's previous determination that the PRC is eligible to export
processed poultry to the United States if the products are derived from
poultry slaughtered in the United States or in other countries eligible
to slaughter and export poultry to the United States.
Response: These comments are either beyond the scope of this
rulemaking or outside FSIS's authority. This rule is based on FSIS's
determination that the PRC's poultry slaughter system is able to
provide a level of protection equivalent to the United States'
inspection system.
Executive Orders 12866 and 13563, and the Regulatory Flexibility Act
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order (E.O.) 13563 emphasizes the importance of quantifying both costs
and benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This final rule has been designated a ``non-significant''
regulatory action under section 3(f) of E.O. 12866. Accordingly, the
rule has not been reviewed by the Office of Management and Budget under
E.O. 12866.
Expected Costs of the Final Rule
The costs of the final rule will accrue primarily to domestic
poultry producers in the form of greater competition from the PRC. In
the short run, the volume of trade stimulated by this final rule is
likely to be small because the PRC only intends to certify five
slaughter establishments to provide poultry to certified processing
establishments to export fully-cooked poultry products to the United
States. Data from the PRC show that these five slaughter establishments
will supply poultry to five processing establishments that the PRC will
certify as eligible to ship product to the U.S. (three of them intend
to export cooked chicken quarter-legs and chicken breasts, one to
export cooked duck legs and duck breasts, and one to export roasted
boneless duck to the United States).\4\ According to the data, the
projected volume of exports to the United States will be about 324
million pounds per year for the next five years.\5\ Given that the
United States domestic annual production volume of ready-to-eat, fully-
cooked poultry is about 12,325 million pounds,\6\ the projected cooked
poultry products from the PRC would only be about 2.6 percent of total
United States production in the next five years.\7\ The immediate
impact on U.S. consumers and domestic processors is likely to be minor,
as the low volume of trade is likely to have little effect on supply
and prices.
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\4\ Data is from the General Administration of Quality
Supervision, Inspection and Quarantine of the People's Republic of
China, November 2015. The projected annual production of these
chicken and duck products at these five processing establishments
will be about 838 million pounds per year, which could be sold in
the PRC or to other foreign countries.
\5\ Data is from the General Administration of Quality
Supervision, Inspection and Quarantine of the People's Republic of
China, November 2015.
\6\ Calculated from PHIS data in November 2015. This number
cannot be divided by species. If we adjusted it by the proportions
of chicken and ducks in total domestic slaughtered poultry, which is
88.3 percent, the volume would be about 10,833 million pounds per
year.
\7\ If we use 10,833 million pounds (see previous footnote) as
the denominator, the projected PRC export would be about 3 percent
of United States domestic production of fully-cooked chicken and
duck.
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In the long run, domestic producers will probably start to feel
competitive pressure of competition if more PRC establishments become
certified to export to the United States. However, FSIS believes the
domestic poultry industry will be competitive with poultry from the
PRC. Recently, labor costs in the PRC have been rising,\8\ and the
rising labor costs together with high feed costs have pushed the
wholesale price of chicken in the PRC to be higher than the United
States.\9\ Comments from three poultry trade associations on the
proposed rule also asserted that the United States is the largest and
most efficient poultry producer in the world. According to the poultry
trade associations, the United States has a comparative advantage in
poultry production and marketing.
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\8\ Gale, F. and C. Arnade. (2015). Effects of Rising Feed and
Labor Costs on China's Chicken Price. International Food and
Agribusiness Management Review, Vol 18, Special Issue A. 137-150.
\9\ Ibid. In addition, the unit price of exported poultry meat
and products from China is much higher than that from the U.S. in
2016 and 2017, according to Global Trade Atlas data. We downloaded
the data from https://www.gtis.com, and it will be available upon
request.
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Expected Benefits of the Final Rule
The PRC is the second largest poultry producing country in the
world, trailing closely behind the United States.\10\ If the
[[Page 60324]]
PRC begins to export other poultry products (for example, if APHIS
allows the PRC to export raw chicken products) \11\ to the United
States and more PRC establishments become certified to be eligible,
consumers will likely benefit from more choices and more competitive
prices in the marketplace; producers will likely benefit from
efficiency gains as they have to become more efficient to be
competitive.\12\ The Agency did not quantify the value of these
benefits because of the lack of predictability associated with the many
factors that heavily influence trade patterns and volume. These factors
include results of Sanitary and Phytosanitary Standards issues (e.g.
the avian influenza), exchange rates,\13\ and domestic political and
economic conditions.
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\10\ See Food Outlook, Food and Agricultural Organization (FAO)
of the United Nations, October 2015, p. 49, at http://www.fao.org/3/a-i5003e.pdf, accessed 1/11/2016. Also see the same publication of
June 2017, p.122, at http://www.fao.org/3/a-i7343e.pdf, accessed 1/
8/2018.
\11\ As mentioned above, APHIS has classified the PRC as a
region affected by certain animal diseases, so the PRC will only be
allowed to export cooked poultry products to the United States.
\12\ It is well-established that international trade benefits
trade partners because it allows countries to specialize in
producing products at which they have a comparative advantage.
\13\ The exchange rate affects the relative prices of exports
and imports.
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This rule will likely increase trade between the United States and
the PRC in poultry products. In the short run, however, the impact is
likely to be small as the expected volume of trade stimulated by this
rule is likely to be small (see Expected Costs section above).
Regulatory Flexibility Act Assessment
The FSIS Administrator certifies that, for the purposes of the
Regulatory Flexibility Act (5 U.S.C. 601 et seq.), this final rule will
not have a significant impact on a substantial number of small entities
in the United States. The expected trade volume will be small, with
little or no effect on all U.S. establishments, regardless of size.
Executive Order 13771
Consistent with E.O. 13771 (82 FR 9339, February 3, 2017), this
final rule facilitates regulatory cooperation with foreign governments.
Therefore, this rule is an E.O. 13771 deregulatory action.
Paperwork Reduction Act
No new paperwork requirements are associated with this proposed
rule. Foreign countries wanting to export poultry and poultry products
to the United States are required to provide information to FSIS
certifying that their inspection system provides standards equivalent
to those of the United States, and that the legal authority for the
system and their implementing regulations are equivalent to those of
the United States. This information collection was approved under OMB
number 0583-0153. The rule contains no other paperwork requirements.
E-Government Act
FSIS and USDA are committed to achieving the purpose of the E-
Government Act (44 U.S.C. 3601, et seq.) by, among other things,
promoting the use of the internet and other information technologies
and providing increased opportunities for citizens access to Government
information and services, and for other purposes.
Additional Public Notification
FSIS will officially notify the World Trade Organization's
Committee on Sanitary and Phytosanitary Measures (WTO/SPS Committee) in
Geneva, Switzerland, of this rule and will announce it online through
the FSIS web page located at: http://www.fsis.usda.gov/wps/portal/fsis/topics/regulations/federal-register/interim-and-final-rules.
Public awareness of all segments of rulemaking and policy
development is important. Consequently, FSIS will announce this Federal
Register publication online through the FSIS web page located at:
http://www.fsis.usda.gov/federal-register.
FSIS will also announce and provide a link to it through the FSIS
Constituent Update, which is used to provide information regarding FSIS
policies, procedures, regulations, Federal Register notices, FSIS
public meetings, and other types of information that could affect or
would be of interest to our constituents and stakeholders. The
Constituent Update is available on the FSIS web page. Through the web
page, FSIS is able to provide information to a much broader, more
diverse audience. In addition, FSIS offers an email subscription
service which provides automatic and customized access to selected food
safety news and information. This service is available at: http://www.fsis.usda.gov/subscribe. Options range from recalls to export
information, regulations, directives, and notices. Customers can add or
delete subscriptions themselves, and have the option to password
protect their accounts.
USDA Non-discrimination Statement
No agency, officer, or employee of the USDA shall, on the grounds
of race, color, national origin, religion, sex, gender identity, sexual
orientation, disability, age, marital status, family/parental status,
income derived from a public assistance program, or political beliefs,
exclude from participation in, deny the benefits of, or subject to
discrimination any person in the United States under any program or
activity conducted by the USDA.
How To File a Complaint of Discrimination
To file a complaint of discrimination, complete the USDA Program
Discrimination Complaint Form, which may be accessed online at http://www.ocio.usda.gov/sites/default/files/docs/2012/Complain_combined_6_8_12.pdf, or write a letter signed by you or your
authorized representative.
Send your completed complaint form or letter to USDA by mail, fax,
or email:
Mail: U.S. Department of Agriculture, Director, Office of
Adjudication, 1400 Independence Avenue SW, Washington, DC 20250-9410.
Fax: (202) 690-7442.
Email: [email protected].
Persons with disabilities who require alternative means for
communication (Braille, large print, audiotape, etc.), should contact
USDA's TARGET Center at (202) 720-2600 (voice and TDD).
List of Subjects in 9 CFR Part 381
Imported products.
For the reasons set out in the preamble, FSIS is amending 9 CFR
part 381 as follows:
PART 381--POULTRY PRODUCTS INSPECTION REGULATIONS
0
1. The authority citation for part 381 continues to read as follows:
Authority: 7 U.S.C. 138f, 450; 21 U.S.C. 451-470; 7 CFR 2.7,
2.18, 2.53.
Sec. 381.196 [Amended]
0
2. In Sec. 381.196, amend paragraph (b) by removing the footnote 2
designation following ``People's Republic of China.''
Done at Washington, DC.
Carmen M. Rottenberg,
Administrator.
[FR Doc. 2019-24234 Filed 11-7-19; 8:45 am]
BILLING CODE 3410-DM-P