Honey Standards and Foreign Competition
Just the other day, USTR Ron Kirk mentioned technical barriers to trade as a focus of future U.S. trade enforcement. He said:
The second new tool will take on one of the biggest obstacles our manufacturers face: technical barriers to trade, such as technical regulations and standards that restrict U.S. exports of safe, high quality products. Now, we will seek out these barriers and tackle them head-on.
Technical regulations and standards are a tricky area. Such measures can blur the lines between legitimate regulation and discrimination against foreign products. In addition, there is the even more sensitive question of whether, regardless of any discrimination, these measures are more trade-restrictive than necessary and thus not allowed under trade rules.
It's not just the United States that is concerned about these issues, though. Here's an example of a U.S. regulation that might aggravate some of our trading partners (I had this post mostly written before the Kirk speech, but after the speech it made sense to tie it in here).
The state of Florida has just adopted standards as to what can be sold as "honey." From the Palm Beach Post:
Florida has instituted the first honey regulation in the nation, and perhaps in the world, prohibiting any additives, chemicals or adulterants in honey, that is produced, processed or sold in Florida, Florida Agriculture and Consumer Services Commissioner Charles Bronson said Monday.
The regulation that takes effect July 14 is aimed at protecting both consumers and Florida's beekeeping industry from adulterated honey. Honey containing anything other than the "natural food product resulting from the harvest of nectar by honeybees" will be considered adulterated and mislabeled. Merchants, manufacturers or processors who sell such products could be served with a "stop sale" order, and repeat offenders would face fines of up to $500 per violation.
See also here and here. The main point of this measure seems to be to prevent honey products that are diluted, such as with high-fructose corn syrup, from being sold as honey.
So far, this measure seems fine to me under the relevant trade rules. Developing these kinds of standards helps consumers understand the product they are buying, which is useful. And they are not very trade-restrictive: You can still sell the products, you just can't label them as "honey."
Here's where it gets tricky, though. There is a little bit of history of U.S. honey producers asking for protection from foreign competitors. In particular, there have been anti-dumping duties imposed on foreign honey in the past. And the state of Florida's press release about its new standard explains the circumstances under which it came up with this regulation as follows:
As a result of a flood of adulterated honey from overseas into Florida in 2006, a petition was submitted to the U.S. Food and Drug Administration (FDA) later that year by five major honey producers and processors, asking the federal agency to establish a U.S. standard of identity for honey. Two years later, the FDA responded that due to other pressing matters, it would be unable to review the petition.At that point, the industry asked [Florida Agriculture and Consumer Services Commissioner Charles H.] Bronson’s department if it would consider developing a standard of identity for the product, and today’s announcement is the culmination of that effort.So, it was a "flood" of "overseas" honey that prompted Florida to act.
This leads me to the following questions: Should we view this standard, which on its face seems fine to me under WTO rules, any differently give the history of protection? And does it matter if protection from foreign competition plays a small role in the development of a regulation or standard? These are difficult questions, in my view, and I'm not sure I have any good answers.