March 5, 2007

Regulatory Analysis and Development

PPD, APHIS, Station 3A-03.8

4700 River Road Unit 118

Riverdale, MD 20737-1238

Re: Docket No. APHIS-2006-0186

Ladies and Gentlemen:

We direct our comments to the proposed amendment which would allow the
importation of uncooked pork and pork products from regions where
classical swine fever (CSF) is considered to exist so long as the pork
and pork products originate in a CSF-free region and provisions for
processing and shipping are met. We are all J.D. candidates at Seattle
University School of Law and are presently enrolled in an administrative
law class taught by visiting Professor Victor B. Flatt. The following
comments are not intended to reflect the views of Seattle University
School of Law.

Under 7 U.S.C.A. § 8303, the Secretary of Agriculture may prohibit or
restrict the importation or entry of any animal or means of conveyance
if the Secretary determines that the prohibition or restriction is
necessary to prevent the introduction of animal diseases. "The statute's
terms indicate a congressional intent to give the Secretary wide
discretion in dealing with the importation of plant and animal
products." *Ranchers Cattlemen Action Legal Fund United Stockgrowers of
America v. USDA*, 415 F.3d 1078, 1094 (2005). Accordingly, the Secretary
is not required to act in all circumstances and, as the 9^th^ Circuits
states, "open borders are a default under the AHPA \[Animal Health
Protection Act\]," *id.* at 1095. Therefore, the Secretary is acting
within his discretion in making the proposed rule.

Under 7 U.S.C.A. § 8301, the Secretary of Agriculture must "protect the
agriculture, environment, economy, and health and welfare of the people
of the United States." In *Ranchers Cattlemen,* the court upheld a USDA
rule, which allowed for the resumption of importation of Canadian beef
after a concern over spread of Bovine Spongiform Encephalopathy (BSE).
The court noted that under the AHPA, the USDA was not required to remove
all risk of BSE entering the U.S. *Id.* Additionally, the AHPA does not
require the Secretary of Agriculture to quantify a permissible level of
risk or to conduct a risk assessment prior to promulgating a regulation
thereunder. *Id.* Specifically, 7 U.S.C.A § 8303(a)(1) merely provides
that "the Secretary \[of Agriculture\] *may* prohibit or restrict \...
the importation or entry of any animal, article, or means of conveyance
\... if the Secretary determines that the prohibition or restriction is
*necessary* to prevent the introduction into or dissemination within the
United States of any pest or disease of livestock." (Emphasis added).
*See also* *Cactus Corner v. U.S. Dept. of Agriculture,* 450 F.3d 428
(2006) (holding that the Secretary of APHIS (Animal and Plant Health
Inspection Service) of USDA was not required to quantify a permissible
level of risk or to conduct a risk assessment prior to issuing a final
rule that allowed the resumption of importation of Spanish clementines,
which had been suspended following the discovery of live Mediterranean
fruit fly larvae).

Due to the wide discretion given to the USDA, the Secretary, in this
proposed rule, is not required to quantify a permissible level of risk
or to conduct a risk assessment. The USDA has the discretion over such
decisions as whether or not to close the borders. The court in *Ranchers
Cattlemen,* however, did engage in an evaluation of the "cumulative
effects of multiple, interlocking safeguards." *Id.* at 1095. Likewise,
this proposed rule has a number of interlocking safeguards in place to
limit CSF from entering the US. The rule requires routine inspections by
FSIS, prohibits live swine in the processing plants, prohibits pork
products of swine from CFS areas in the processing plants, requires
routine inspections by APHIS, and requires the shipment of the products
in specially sealed containers. The Supplemental Information to the
proposed rule state that this process presents "a minimal risk of
introducing CSF into the United States."

However, given that APHIS is seeking to promulgate a rule that
effectively opens the borders after they have been affirmatively
restricted, additional consideration should be given in order to justify
this amendment. Specifically, APHIS should clarify (1) to what extent
there will be any increased risk of exposing U.S. consumers to CSF; (2)
whether an estimated \$92,000 net gain justifies such increased risk;
(3) to what extent the amendment will affect American jobs; (4) whether
the proposed amendment is practicable; (5) whether the amendment
contains any conflicts of interest with foreign governments; (6) whether
the amendment contains ambiguous language; (7) whether the Amendment
meets the requirements of the Regulatory Flexibility Act; and (8)
whether the Amendment meets the requirements of the National
Environmental Protection Act.

**(1)** **Whether there is any increased risk of exposing U.S. consumers
to CSF.**

The rule proposal lays out in fair amount of detail the process by which
uncooked pork and pork products will go through in order to maintain
compliance with APHIS standards. Yet, it fails to discuss whether there
is *any* increased risk of CSF exposure to U.S. consumers. The
assumption may be that because the amendment sets forth a stringent
procedure with which the handlers and shippers of uncooked pork must
comply, there is no increased risk of exposure to CSF or other viruses.
However, given the long distances that the pork will travel and all the
different handlers, there is likely some risk of exposure to viruses,
and the sensitivity of the matter, i.e., the food supply of U.S.
consumers, requires that this proposed rule needs more analysis.

**(2) Does an estimated net gain of \$92,000 justify the increased
risk?**

Once the additional risk of CSF exposure is determined, such risk must
be weighed against the relatively small \$92,000 net gain for the U.S.
economy's welfare. The importance of this balancing is amplified by the
fact that a large majority of the entities affected by the proposed
changes would be small entities. Even though current estimates suggest
that small entities would share only a \$1.6 million reduction in
"economic welfare," this figure remains only an estimate and could
likely increase. Furthermore, it is not at all clear whether this
estimated reduction is limited to next year's expected results or
whether it extends out further. Thus, more analysis is needed.

**(3) To What extent will the amendment affect American jobs?**

The regulation at issue is promulgated under 7 USC § 8301-8311, referred
to as the Farm Security Act of 2002. President Bush, at the passing of
this legislation, stated that "the success of America's farmers and
ranchers is essential to the success of the American economy." Statement
by President Bush Upon Signing H.R. 2646, 2002 U.S.C.C.A.N. 410 (May 13,
2002). While this proposed rule can be seen as increasing the
flexibility that pork producers will have in their operations, APHIS
acknowledges that the rule will cost producers \$1.6 million dollars.
This cost to producers will be felt by the true backbone of American
Farms, the farm worker. By allowing the importation of pork products,
this proposed rule will likely be exporting American farm jobs. This
outcome should be avoided.

The regulatory philosophy of this government is one of limitation.
"Federal agencies should promulgate only such regulations as are
required by law, necessary to interpret the law, or are made necessary
by compelling public need." Exec. Order 12866 (1993). The proposed rule
here does not appear to be necessary. APHIS does not state a compelling
public need or material market failure that this rule would address. The
agency appears to be proposing a rule that has no other effect than to
open markets without expressing the necessity for such a decision.

APHIS acknowledges that the overall impact of this rule would be a mere
\$92,000 annual net gain for the U.S. Economy and this small gain does
not appear to warrant the actions proposed. The loss of American jobs is
worth more than the gain if not simply for the intangible effect on the
overall workforce of seeing the U.S. government continuing to encourage
the outsourcing of work.

Moreover, additional analysis should be done on the cost-benefit
analysis of this rule by the OMB. APHIS states that the proposed rule is
not significant and so need not be reviewed by OMB per Executive Order
12866. *Id*. For purposes of Executive Order 12866, a significant
regulatory action means "any action likely to adversely affect jobs in a
material way." Exec. Order 12866 Sec. 3(f)(1). On its face this proposed
rule would adversely affect jobs in a material way because the job of
processing pork and pork products will be sent to areas where CSF is
considered to exist. For these reasons, APHIS should submit this rule
for review by the OMB.

Even if APHIS does not wish to send the proposed rule to OMB, it would
be in their best interest to clarify the potential effect of the rule on
American jobs in order to dispel concerns about job outsourcing. Farmers
and farm workers are the backbone of this country and there is a growing
concern that jobs are being exported for the sake of a meager gain. This
appears to be the case here and the agency should provide additional
reassurances that Americans will not be put out of work if this rule is
made final.

**(4) Whether the proposed amendment is practicable.**

Under the amendment, the processing establishment will not be allowed to
receive or process any live swine. We are skeptical that any prosperous
businessman will be able to operate a processing plant that is so
extremely limited in its activities. It seems that diversification of
activities to take advantage of the processing infrastructure that is
already in place is essential to creating a for-profit business. To
further this point, the numbers set forth in Table 2 under the
Regulatory Flexibility Act analysis section in the proposal show that
the potential profitability from processing American pork is *de
minimus*. Therefore, it does not appear financially practical for a
foreign company to operate a processing plant limited exclusively to
pork products destined for the U.S., which would essentially be the
result because strict U.S. standards prevent the processing plant from
mixing in other products. What businessman would agree to this? It seems
that free markets will work themselves out and even though this
amendment may be passed, it may never be used because foreign processing
companies will refuse to abide by this amendment because it too severely
handicaps their earning potential.

Additionally, there are no firm numbers on the information collection
costs associated with enforcing activities under this amendment,
although they are very likely extremely costly and burdensome. With the
projected annual net welfare gain of only \$92,000, increased
information costs may outweigh the benefits, making activity under this
amendment unpractical.

**(5) Whether the amendment contains any conflicts of interest with
foreign governments.**

Section four under *Handling at Approved Establishment* requires a
full-time salaried meat inspection official of the national government
of the region where the processing facility is located to "supervise"
the processing to ensure that it is in accordance with American
standards. To point out the obvious, a government official has a number
one duty to his government. The government of any foreign country will
obviously want to increase trade and not shoot itself in its own foot by
whistle blowing on operations within its borders. Having a foreign
"supervisor" carries with it a built in incentive to deceive American
businessmen and overlook faulty quality control. Additionally, pursuant
to section five, what processing plant would agree to fully fund APHIS
agents to come into their processing plant for inspection? Even if a
processing plant in Mexico made the imprudent business decision to agree
to these micro-managing regulations, getting the processing plant clean
for a once a year inspection seems like an invitation for at least 48
weeks a year of sub-standard performance. Given the enormous information
costs already associated with this entire process, it is unlikely that
APHIS will spend more money to take advantage of its "unannounced"
inspection visits that the amendment allows them. An infinite number of
seals and certificates will only "certify" that the containers contain
pork that may or may not have been processed correctly.

**(6) Whether the amendment contains ambiguous language.**

Ambiguous statutory language needs to be rectified to avoid endless
litigation. Section 94.9 reads "Uncooked pork...that originated in a
region 'considered to be free' of classical swine fever." "Considered"
seems certain to result in unnecessary litigation. Whose opinion
determines which areas are to be "considered" free of CSF? Will this be
according to locals, or to USDA officials 3,000 miles away, or by
government officials of either country?

[]{.mark}

**(7) Whether the Amendment meets the requirements of the Regulatory
Flexibility Act.**

The Regulatory Flexibility Act requires that agencies conduct analyses
to evaluate the regulatory impacts of a rule and to determine whether
there will be a "significant economic impact on a substantial number of
small entities." 5 U.S.C. §601(a)(1). However, as Congress has not
defined "substantial" or "significant" in the context of this Act, there
is some ambiguity as to whether APHIS's expected impact outweighs the
proposed benefits. APHIS concedes that in any possible result of the
proposed amendment, small entities (both those that process pigs as well
as those who produce pigs) would bear the brunt of any negative impact.
The magnitude of the impact that may result is largely a function of the
increase in trade between the U.S. and CSF-affected regions
(particularly Mexico). Currently, the agency is unable to predict the
size of the increase. However, given Mexico's currently minimal
contribution to United States' pork importation, the agency concludes
that even if Mexico were to double its pork imports (based on figures
from 2005), the domestic production of pork would decrease by only 0.013
percent and demand for pork would only increase by 0.011 percent.
Additionally, by calculating the change in consumer welfare and
subtracting that from the change in producer welfare, APHIS has
determined that the annual net welfare gain would increase by \$92,000
after the adoption of the amendment.

However, in reaching this analysis the agency fails to provide a more
specific and comprehendible roadmap as to how it reached its conclusion.
It would be helpful to have more information on exactly what variables
were taken into account to determine the "change in consumer welfare"
and the "change in producer welfare." By providing fuller disclosure in
the agency's economic analysis, the public may be more assured that the
proposed rule will not have a more serious impact on American citizens
employed in the domestic pork industry as well as on consumers of pork.

**(8) Whether the Amendment meets the requirements of the National
Environmental Protection Act.**

The USDA was not required to file an environmental impact statement if
its action would not have a significant effect on environment. *American
Horse Protection Ass\'n, Inc. v. Frizzell*, 403 F.Supp.1206 (1975). If
the USDA made a faulty assessment that the risk of the introduction of
CSF was minimal, they may be required to comply with NEPA. See *Harlan
Land Co. v. USDA*, 186 F.Supp.2d 1076, 1098 (2001) (court cannot give
deference to decision not to comply with NEPA when the finding of no
significant impact was based on questionable conclusion that the risk of
pest introduction is negligible). However, assuming that the USDA
provides sound scientific evidence on the administrative record in
support of their finding that the risk of introduction of CSF is
minimal, they will be in compliance with NEPA.

In conclusion, we cautiously support this proposed amendment because
this action is within the agency's discretion. However, the agency
should consider the concerns discussed above before issuing a final
regulation.

Sincerely,

Heather O. Elkin

Aoife Gallagher

Hagen Ganem

Anna C. Johnson

Thomas Lee

Elizabeth LePley

Eric W. Robinson

J.D. Candidates

Seattle University School of Law