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Maximum residue levels an issue that’s coming to a head

New trade agreements should be good for horticultural product exports, but fuzzy rules around MRLs could become non-tariff barriers

Mention maximum residue levels (MRLs) to a grower or a chemical company representative, and you’re likely to receive a frustrated response. In spite of trade deals between continental jurisdictions, the MRL issue continues to be a stick in the cogs of the smooth operation of trade agreements. The Trans-Pacific Partnership (TPP) or the Comprehensive Economic and Trade Agreement (CETA) aside, MRLs continue to confound open trade around the world.

There are two camps in Canada affected by this issue: the horticulture sector, which has been front and centre for the past few years, and the grains sector, which is early in its dealings yet trying to stay ahead of the tolerances and barriers among trading nations. The struggle for each is in making sense of a principle that has few if any standards.

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Much of the challenge in dealing with MRLs comes on two levels. The first is in establishing the tolerance levels for registered chemistries, a process that can be complicated at several stages. The science of detection in the past 30 years has advanced from parts per million to parts per billion, and in certain applications, parts per trillion. Yet as the science has advanced, many of the countries that Canada trades with have not done the same with their tolerance levels and can apply strict zero tolerances, making things unpredictable and a stumbling block on trade relations.

The second factor is the backlog of registrations by Codex Alimentarius, a combined agency of the World Health Organization and the United Nations’ Food and Agriculture Organization (FAO). Codex oversees the development of harmonized food safety standards and fair business practices, yet applications for MRLs can sit for up to four years during which countries might be trading commodities based on mutually recognized and agreed-upon standards. At the end of that backlog period, it’s possible that Codex will establish a different MRL on a crop, even though it’s working with the same data provided by the applicant.

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Negotiating tactic

To be clear, this has nothing to do with food safety and has little impact on Canada’s potato sector. It’s also affecting all growers worldwide. But the impact of MRLs has yet to be fully determined, particularly with opportunities that may result from TPP or CETA. This is a trade “mechanism” that can be used as a political device or, under less scrupulous conditions, to cut the price of commodities. Craig Hunter, who oversees crop protection and research for the Ontario Fruit and Vegetable Growers Association (OFVGA) in Guelph, Ont., knows growers who have had buyers visit to arrange a purchase only to announce they’re unwilling to take the crop because of the use of certain chemicals. At that point they might agree to “take the crop off their hands, —  at a significantly lower price.

Hunter adds that since Codex is so slow and so far behind, countries such as China, South Korea, Malaysia and others are setting their own residue standards. That sounds proactive, but it isn’t because of the measurement capabilities, political stances or trading practices.

“If countries want to use this as a non-tariff trade barrier, they can because the equipment allows them to,” says Hunter, referring to the parts-per-trillion capabilities for detection.

TPP concerns

Potato growers might not have that much to worry about with MRLs  — for the time being. Most of Canada’a potato production stays at home, with most exports bound for the U.S., where MRLs are similar. Where there might be a conflict, however, is with the TPP.

“We do ship frozen and processed potatoes into certain markets, and with the Trans-Pacific Partnership, Japan has agreed to eliminate their tariffs across the board,” says Hunter, adding that South Korea (which is not part of the TPP) will eliminate tariffs as well.

“If they take those tariffs off, we have that much more room to negotiate price and it may open up market potential. But it won’t matter if there are still MRL discrepancies that are used against us.”

To make matters even more challenging, in mid-2014 the federal government dropped its subscription to an international database that provided organizations such the OFVGA and Pulse Canada with up-to-date information on MRL levels in different countries. In the spring of 2015, the MRL working group (under Pulse Canada’s lead) pooled some its own funds and purchased a subscription to a database that provides every MRL from every country that has such standards. It also offers market intelligence about proposed changes, unpublished changes or speculative information from all of those countries.

“That way, we can provide our members with the most up-to-date information,” says Hunter, adding that the federal government is still trying to negotiate something for the rest of Canada. “So we’re using grower money for that information because we absolutely need it.”

Consumer concerns

Another factor that may take an increasing role is that of consumer interest — today’s consumers want to know more about food production, and not just in North America, but around the world. Gord Kurbis, director of market access and trade policy with Pulse Canada, says that could result in more MRL-related trade disputes, particularly with some countries where there are high-profile and genuine food safety concerns.

That could lead to those countries that didn’t monitor MRLs before monitoring them now. If nothing else were to change, those involved in MRLs in Canada wouldn’t be too concerned because of the reputation for clean crops and the willingness to stand behind the compliance with relevant food safety standards around the world. But the ability to monitor at parts per billion and parts per trillion doesn’t guarantee better MRL policies or opening the door on increased trade.

“At 10 ppb, you probably don’t have any detectable residues,” says Kurbis. “But if you can measure down to  one ppb, which is probably well below a level that’s biologically significant, you could be non-compliant if the importing country has a default policy which says, ‘If we don’t have a number on the books, we’re going to default to zero’.”

Another trend is that there are more countries around the world that formerly used Codex as their source for MRLs to evaluate the data, coming up with a risk assessment and a maximum residue limit. But they’re moving away from that process and establishing their own national approaches.

“And that would be fine if governments did a better job of talking to each other but it almost seems as though things are being done in isolation,” says Kurbis. “In some cases, where there are more countries moving towards national approaches and where regulators are trying to get almost identical endpoints in terms of consumer protection, they’re coming with approaches that are completely different. And that’s tough for trade when there are all of these misaligned standards that you have to comply with.”

The one lesson that Kurbis has taken from this process is that a more co-operative effort is needed, hence the government-industry MRL task force that Pulse Canada is spearheading. Ultimately, the goal is to make their priorities known to identify those measures they may need to manage in the future within our own value chains. They’re also trying to identify and get key MRLs needed, and identify long-term fixes for current discrepancies.

This was originally published on the 2016 issue of Potato Guide

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