- The Washington Times - Tuesday, March 11, 2003

RIO DE JANEIRO, Brazil, March 11 (UPI) — Brazilian officials say new regulations in the Bioterrorism Act targeting food products entering the United States may heavily burden exporters in developing nations.

In the wake of the Sept. 11, 2001, terror attacks, the U.S. Congress passed a far-reaching bill last year to safeguard the country from future dangers.

Part of the safety net covers imported edible goods and the effort to halt any materials from entering the United States that may be used by terrorists to threaten the nation's food supply.

But some analysts say the new regulations — for which the U.S. government is still taking suggestions, and which are set to go into effect in mid-December — may go too far, encumbering exporters of fresh foods and other items with added costs.

"In legal terms, the measures can't be considered restrictive to trade because they have support in the WTO for being related to questions of national security," Rubens Barbosa, Brazil's ambassador to the United States, told the Brazilian newspaper Valor on Tuesday.

"They go against, however, the mechanisms of 'facilitating trade' as foreseen in the WTO and in the negotiations for the FTAA (Free Trade Area of the Americas)."

As the regulations now stand, companies wishing to export food items, as well as nutritional supplements, will have to register a permanent agent in the United States, give prior notice for each shipment sent, and keep extensive records to allow U.S. authorities to better track exactly where each product originated.

While analysts disagree on exactly how much this will cost those who export to the United States, a generally accepted figure is about $380 million in the first year, with undetermined permanent costs to follow.

Eugenio Diaz-Bonilla, a senior research fellow at the International Food Policy Research Institute in Washington, agrees that the new regulations will place a heavy burden on exporters.

But he thinks it inevitable, given the climate of insecurity in the United States.

"It will certainly impose additional things — more paperwork, more registration procedures — that exporters will have to go through," he said.

"But it is difficult to see what a developing country — or a developed country, for that matter — can do, considering the concerns that the U.S. has in terms of the possibility of someone shipping a bomb in a container."

The regulations will be enacted on all shipments after Dec. 11.

Brazilian authorities, in addition to being concerned about the extra costs for their exporters, say many businessmen are still unaware of the new regulations they will have to meet.

"We keep seeing people here and they don't know anything about the regulations," a top official at the Brazilian Embassy in Washington told United Press International on condition of anonymity.

"We say: 'Have you heard about this?' and they say 'No, no, no! What a surprise!' We want them to wake up and see what they will have to be doing."

For Diaz-Bonilla — a former Argentine diplomat in Washington — the costs of the new protections are worth it for the sake of security. But he thinks exporters — and importers in the United States — should be prepared for a headache.

"I think it is in the interest of everybody to have a tighter control of these trade flows. But certainly that will throw some sand in the wheels of trade," he said.

"It is similar to the notion of having a better control of capital flows and money laundering that may fuel terrorism. There is some tension there between free trade, free captial flows and the need to address concerns about how to control the possible misuse of that freedom."

Some key foods which are regulated by the Agriculture Department and not the Food and Drug Administration — beef, chicken and some egg products — are exempt from much of the new regulations.

But analysts say those products may see tougher regulations in the future.

For years many developing countries — led by Brazil — have accused the United States of using health and safety regulations as a cloaked means of protectionism in keeping foreign agricultural products out.

But Barbosa told the Valor newspaper he doesn't think this to be the case with the regulations stemming from the Bioterrorism Act.

But, he clearly states that the new regulations could have a strangling effect on some sectors of trade.

Additionally, Brazilian officials say the United States is pushing hard for certain key ports around the world to bulk up security and perform their own searches and inspections of products bound for the United States.

In 2002, the United States imported $46.9 billion in foodstuffs.

Brazilian officials lament that because of stiff barriers to their orange juice and sugar, their country — Latin America's biggest economy and one of the world's most agriculturally rich nations — was only able to export $1.1 billion of that total to the United States.

Diaz-Bonilla said that while the new regulations will present challenges, it is essentially up to exporters to work with their respective embassies in the United States to raise red flags and make the regulations more efficient.

"It is a new barrier to trade and perhaps it could be used for protective reasons," he said. "Exporters from our countries and importers in the U.S. must work closely with the customs agencies to identify the problems, where you could have the same level of protection against a terrorist act but with the lowest possible impact on trade."

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