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![Page 1: Integrating the Canadian & US Regulatory Systems for GM Crops Presentation to the 19 th ICABR Conference Ravello, Italy June 16-19, 2015 Stuart Smyth,](https://reader030.fdocuments.net/reader030/viewer/2022032803/56649e2d5503460f94b1ca34/html5/thumbnails/1.jpg)
Integrating the Canadian & US Regulatory Systems for GM Crops
Presentation to the 19th ICABR ConferenceRavello, ItalyJune 16-19, 2015
Stuart Smyth, William Kerr &Richard Gray,University of Saskatchewan
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Challenge:To reduce the cost of regulatory approval for new crops
Increasing Regulatory Efficiency is Crucial
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Introduction
• Canada and the US are each others largest trading partners
• 75% of Canadian exports worth C$358 billion go south
• 20% of American exports worth US$300 billion go north
• Signed Canada-US Trade Agreement in 1988 (CUSTA)
• Signed North American Free Trade Agreement in 1994 (NAFTA)
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The role of NAFTA
• NAFTA recognized the cost of regulatory disharmony
• Two specific articles in NAFTA to deal with this:
•Article 906 – Compatibility and Equivalence
•Article 913 – Committee on Standards-
Related Measures
• Considerable efforts taken to ensure that the potential for trade disrupting events were minimized
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Institutional foresight
• Evidence of NAFTA’s shortcomings in regulatory harmonization can be found in the area of beef carcass grading
• After 20 years, there is still no harmonization
• Evidence shows that under NAFTA there is little to no consultation between Canada, the US or Mexico when one country changes regulations
• Sovereignty over regulations appears to be deeply entrenched
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Lack of regulatory harmonization
• Agreement by trade negotiators doesn’t necessarily equal political willpower
• This is certainly the case when dealing with standard marketplace products but even more pronounced when dealing with food products
• Food safety failures have devastating and long lasting impacts on political careers, hence strong aversion to anything that may trigger a failure
• Regulatory harmonization could raise the risk of a food safety failure
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Regulatory integration options
Option 1: Country A harmonizes with Country B’s regulations
Option 2: Country B harmonizes with Country A’s regulations
Option 3: Both countries agree to participate in the establishment of a new regulatory framework
•Political dilemma is who bears the cost of harmonization?
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Regulatory harmonization obstacles
• No country is going to want to bear the full cost of regulatory integration with another country
• Each country will have argued to their political higher-ups that their regulatory system is second to none
• Faced with harmonization, suddenly one nation has to admit that its regulations are not the ‘best system’
• Canadian and US GM crop regulations are quite similar so this may be less of an issue
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Example of regulatory harmonization
• NAFTA established the Technical Working Group on Pesticides, to integrate pest management
• Key objectives:
•Sharing information
•Undertaking collaborative scientific work
•Forging common data requirements
•Collaborating on risk assessments
•Carrying out joint reviews
•Developing common NAFTA standards
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Reality of harmonization challenges
• Designed to collaborate on applications for new chemical use and renewals of existing chemicals
• The first five years (2003-08) seem to have been productive in terms of collaboration and outcomes
• Objectives set for second five year period (08-13)
• Process seems to have stalled during this period
• In 2011, Canada and the US established a new mechanism for regulatory harmonization
• Clearly, lack of progress triggered a failure
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Economic impact of product regulation
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Impact of market size on the AC of reg. compliance
MC
Demand with Reg.
AC Reg. compliance
Reg Compliance Cost
Producer Surplus
$
Price
Quantity
MC
Demand with Reg.
AC Reg. compliance
Reg Compliance Cost
Producer Surplus
$
Quantity
Small Market Large Market
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Impact of regulatory harmonization
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Challenges for Canada and US regulatory harmonization
• No formal super-national body to foster a bilateral agenda
• However, the US resents these types of institutions as sovereignty limitations may be placed on the US
• The ultimate key to moving towards a single regulatory agency for plant variety approvals in Canada and the US relies on developing non-partisan regulatory institutions
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Conclusions
• Regulatory duplication delays ag innovation, creating forgone opportunities
• Governments are risk adverse and this is especially true when it comes to food regulation
• If two economically connected countries such as Canada and the US cannot achieve regulatory integration then the prospect that this be accomplished by other countries is greatly reduced
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Thank You To Our Sponsors
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Questions?Comments?