United States 

Department of 

Agriculture 

Animal and 

Plant Health 

Inspection 

Service 

January 2012 

Regulatory Impact Analysis & 

Initial Regulatory Flexibility Analysis 

Proposed Rule 

APHIS 2008-0010 

RIN 0579- AC68 

Bovine Spongiform Encephalopathy; 

Importation of Bovines and Bovine Products 

Policy & Program Development 

Policy Analysis & Development
i 

Summary 

The proposed rule would make our bovine and bovine product import restrictions related 

to bovine spongiform encephalopathy (BSE) more reflective of current scientific thinking while 

continuing to guard against the introduction of BSE. The proposed process for classifying 

regions with respect to BSE risk would be based on the comprehensive review of relevant, 

internationally accepted scientific literature and would be consistent with the process employed 

by the World Organization for Animal Health (OIE). The proposed rule would also remove 

BSE-related restrictions on the importation of live cervids and camelids and their products. 

While benefits of the proposed rule are expected to exceed its costs, effects on U.S. 

imports are expected to be minimal. Potential impacts of the proposed rule on U.S. export 

markets, by influencing trading partners’ import policies, are not considered in this analysis. 

Live Bovines (Cattle and Bison) 

Canada and Mexico are the sources of nearly all U.S. bovine imports. In the past 15 

years, they have accounted for 99.9 percent of all cattle and bison imported into the United 

States. APHIS is proposing to classify Canada and Mexico as countries of controlled risk for 

BSE (their classification by the OIE). 

Imports from Canada are likely to be unaffected by this proposed rule because the 

proposed requirements would cause no change in the number or type of animals that are eligible 

for importation, based on Canada’s status as a BSE minimal-risk region. Imports from Mexico 

also are likely to be largely unaffected, since nearly all cattle imported from Mexico (98 to 99 

percent) are estimated to be less than 24 months of age and APHIS is proposing in this rule to 

establish November 30, 2007, as the date of effective enforcement of a ruminant-to-ruminant 

feed ban in Mexico (the earliest date that bovines imported from Mexico could be born). 
ii 

Products Derived from Bovines 

Six countries, Argentina, Australia, Brazil, Canada, New Zealand, and Uruguay, 

accounted for 93 percent of all U.S. bovine product import volume (and 92 percent of the import 

value) over the five-year period, 2006-2010. Imports from each of the six countries should 

continue essentially unchanged and without interruption under the proposed rule, because the 

protocols in place in these countries are already in full compliance with the proposed criteria. 

Argentina, Australia, New Zealand, and Uruguay are APHIS-proposed negligible risk regions for 

BSE that have never reported a case of BSE. Canada and Brazil, as proposed controlled risk 

regions for BSE, already satisfy FSIS inspection requirements and prohibitions on certain animal 

stunning or pithing and mechanically separated meat. 

Imports from the 36 (primarily European) countries listed in 9 CFR § 94.18 as prohibited 

from shipping bovine products to the United States likely would be insignificant under the 

proposed rule. In none of the years from 1990 through 1996, that is, prior to the prohibition on 

ruminant product imports from all of Europe in 1997, did the volume of U.S. bovine product 

imports from the 36 countries account for more than 0.6 percent of imports of these products. 

Nor does the current trade climate suggest a significant volume of imports from the 36 

countries in the future, at least in the near term. U.S. imports of beef and other bovine products 

have been in decline, a situation that makes it increasingly difficult for foreign exporters to 

compete in the U.S. market. Second, while bovine product exports by the European Union (EU27) more than doubled in nominal value in five years, from $0.43 billion in 2006 to $1.01 billion 

in 2010, the value of bovine product imports by EU-27 member countries in 2010 ($2.1 billion) 

was twice the value of their bovine product exports. The EU-27 continues to be a large net 
iii 

importer of bovine products overall. Emerging markets, such as Russia, are likely to take a 

growing share of Europe’s bovine product exports. 

Bovine product imports from other countries that are not currently subject to BSE-related 

restrictions are not expected to be significantly affected. Over the five years, 2006-2010, annual 

imports from such countries as a group averaged 6 to 7 percent of all U.S. bovine product 

imports by volume (7 to 8 percent by value), with virtually all of the products coming from 

Mexico, Nicaragua, and Costa Rica. Imports from Mexico already meet the proposed 

requirements of a region of controlled risk for BSE largely by way of FSIS requirements. The 

potential impact on imports from Nicaragua and Costa Rica, which APHIS is proposing to 

recognize as regions of undetermined risk for BSE, should be minimal at most. Almost all 

imports from those two countries are of boneless beef that already satisfy the proposed rule’s 

requirements, again, largely by way of FSIS requirements. 

Live Cervids and Camelids and their Products 

Removal of the prohibition on the importation of live cervids and camelids and their 

products from the 36 countries listed in 9 CFR § 94.18 would likely have little or no impact. The 

United States has not imported any live cervids or camelids from these countries since at least 

1990. In none of the years from 1990 through 1996, before the prohibition of ruminant meat, 

meat products, and other edible products from all of Europe in 1997, did the volume of U.S. 

imports of meat and edible offal of deer from the 36 countries account for more than 3.3 percent 

of total imports. Moreover, U.S. imports of meat and edible offal of deer have declined since 

2005, a situation that makes it increasingly difficult for foreign exporters to compete in the U.S. 

market. The volume of U.S. imports of camelid products is very small. Their annual value 
iv 

averaged less than $50,000 over the five-year period, 2006-2010, and 90 percent of those imports 

were supplied by Canada and China. 

Benefits, Costs, and Alternatives 

Consumers benefit from imports to the extent that consumer choice is broadened and the 

increased supply of the imported commodity leads to a price decline. We anticipate that the 

proposed rule would have little impact on consumer choice or import volumes. Likewise, we 

anticipate little or no impact for U.S. businesses because of changes in import volumes. 

Although the impact of this proposed rule on U.S. consumers and producers is expected 

to be minimal, the benefits of the rule are expected to outweigh its costs. Leaving the bovine 

regulations unchanged would be unsatisfactory, because it would perpetuate the current situation 

in which our BSE-related import conditions are not fully supported by scientific evidence. 

Additionally, maintaining the status quo would not provide an opportunity to recognize a 

region’s BSE risk status in a more timely fashion than is possible under current regulations. 

Another alternative, amending the BSE regulations related to the importation of bovines and 

bovine-derived products to match precisely the OIE Code without allowing for modification 

deemed necessary by APHIS, would also be unsatisfactory, because it would not allow APHIS to 

independently interpret the scientific literature and findings that underlie OIE risk categorization 

recommendations. Making no changes to the regulations that govern the importation of cervids 

and camelids would also be unsatisfactory, because it would perpetuate an unnecessary 

constraint on trade in those commodities. 

Small entities are prevalent in industries potentially affected by the proposed rule, but as 

described, we expect at most a minimal economic impact for U.S. businesses. We invite public 
v 

comment on the rule’s potential economic impact, including comment on the potential impact on 

small entities. 

 
vi 

Table of Contents

Summary .............................................................................................................................. i

Introduction ......................................................................................................................... 1

Expected Effects of the Rule on U.S. Imports .................................................................... 2

Live Bovines and Bovine Products ................................................................................. 2

Cervids and Camelids and their Products ..................................................................... 12

Expected Benefits and Costs, and Alternatives to the Proposed Rule .............................. 13

Initial Regulatory Flexibility Analysis .............................................................................. 14
1 

Introduction 

APHIS is proposing to amend the regulations that govern the importation of live bovines 

and products derived from bovines with regard to bovine spongiform encephalopathy (BSE). 

We are proposing to base importation conditions on the inherent risk of BSE infectivity in 

specified commodities, as well as on the BSE risk status of the region from which the 

commodities originate. We are proposing to establish a process for classifying regions as to BSE 

risk that is consistent with the process employed by the World Organization for Animal Health 

(OIE), the international standard-setting organization for animal health. 

The conditions we are proposing for the importation of specified commodities are based 

on internationally accepted scientific literature and, except in a few instances, are consistent with 

the OIE Code. We are also proposing to classify certain specified countries as to BSE risk and 

are proposing to remove BSE restrictions on the importation of cervids and camelids and 

products derived from such animals. 

This economic analysis provides a cost-benefit analysis, as required by Executive Orders 

12866 and 13563, which direct agencies to assess all costs and benefits of available regulatory 

alternatives and, if regulation is necessary, to select regulatory approaches that maximize net 

benefits (including potential economic, environmental, public health and safety effects, and 

equity). Executive Order 13563 emphasizes the importance of quantifying both costs and 

benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The economic 

analysis also examines the potential economic effects of this rule on small entities, as required by 

the Regulatory Flexibility Act. 
2 

Expected Effects of the Rule on U.S. Imports 

To the extent that it would amend APHIS live animal and animal product import 

regulations as they relate to BSE, this proposed rule’s impact would stem largely from its 

potential effect on U.S. imports of those commodities.1 For the reasons discussed below, we 

believe the effect of this proposed rule on imports into the United States would be minimal at 

most. The anticipated impact on live bovines (and their products) and live cervids/camelids (and 

their products) are discussed separately. 

Live Bovines and Bovine Products 

Live Bovines (Cattle and Bison) 

Together, Canada and Mexico have been the source of almost all imports of cattle and 

bison into the United States. In the past 15 years, the two countries accounted for no less than 

99.9 percent of all U.S. cattle and bison imports. Canada exports both cattle and bison to the 

United States; Mexico exports cattle only. In 2009 and 2010, the United States imported 2.0 

million and 2.3 million live bovines (all from Canada and Mexico), with values of $1.3 billion 

and $1.6 billion, respectively.2 

Imports from Canada, which is classified by the OIE as a country of controlled risk for 

BSE and which APHIS likewise is proposing to classify as controlled risk, are likely to be 

unaffected by the proposed rule; the proposed requirements would cause no change in the 

 

1

 The proposed rule has the potential to expand the U.S. export market, to the extent that it causes our 

trading partners to alter their trade policies. Because predicting if and when foreign countries would 

make changes to their trade policies is highly speculative, this analysis assumes no trade policy changes 

in foreign countries as a result of the proposed rule and therefore no impact on U.S. exports. 

2

 Unless otherwise indicated, all trade data in this analysis are from the Department of Commerce, U.S. 

Census Bureau, as reported by Global Trade Information Services, Inc. 
3 

number or type of animals that are eligible for importation based on Canada’s status as a BSE 

minimal-risk region. Importation of live bovines from Canada is limited to those born on or after 

the date a ruminant-to-ruminant feed ban was effectively enforced in that country.3

 Under the 

provisions we are proposing, imports of live bovines from Canada would continue to be subject 

to that requirement. Canada would also be able to satisfy the proposed requirements relating to 

the identification of live bovines from regions of controlled risk for BSE, because current 

regulations require that all imports of cattle and bison from Canada be individually identified, 

and that all of those not for immediate slaughter be permanently identified as originating in 

Canada.4 

We expect that these proposed changes would have, at most, minimal impact on the 

number and type of bovines eligible for importation from Mexico. Mexico, like Canada, is 

classified by the OIE as a country of controlled risk for BSE and APHIS is likewise proposing to 

classify Mexico as controlled risk for BSE. Currently, there are no BSE age-related restrictions 

on cattle from Mexico. As a region of controlled risk for BSE under this proposed rule, Mexico 

would be allowed to export to the United States only those live bovines born on or after the date 

a ruminant-to-ruminant feed ban was effectively enforced in that country. In this rule, APHIS is 

proposing to establish November 30, 2007, as the date of effective enforcement of a feed ban in 

Mexico. 

Bovine imports from Mexico would be essentially unaffected by the establishment of the 

feed ban requirement in this proposed rule. Virtually all cattle imports from Mexico (98 to 99 

 

3

 The effective enforcement date in Canada was March 1, 1999. 

4

 Under the proposed rule, live bovines from Canada for immediate slaughter would not be subject to the 

country of origin identification requirement. 
4 

percent) are estimated to be less than 24 months of age.5

 Furthermore, any impact of the rule on 

the relatively small volume of cattle imported from Mexico born before November 30, 2007, 

would be short-lived, since it would allow for imports of increasingly older animals over time. 

Nor should the proposed requirements relating to animal identification pose a significant 

problem for Mexican exporters. As with imports from Canada, current regulations require that 

all imports of cattle from Mexico be individually identified. Current regulations also require that 

all steers and spayed heifers from Mexico be permanently identified as originating in that 

country. Virtually all U.S. imports from Mexico in past years have been steers and spayed 

heifers that are not for immediate slaughter. Because opportunities for feeder cattle sales within 

Mexico are limited, cattle imports from that country tend to be lighter cattle for stocker 

operations and eventual finishing in U.S. feedlots. Most, or all, of the few imports that are not 

steers and spayed heifers are also permanently identified as originating in Mexico, by way of 

requirements established by the importing U.S. Border States. 

We anticipate that this proposed rule would be unlikely to have a significant impact on 

imports of cattle and bison into the United States from countries other than Canada and Mexico. 

Such imports have been extremely limited in the past, primarily because exporters in 

geographically distant countries are at a significant competitive disadvantage in the U.S. 

 

5

 Data on the age of cattle imported into the United States from Mexico are not available. This estimate 

of the percentage of animals less than 24 months of age was provided by USDA Economic Research 

Service. It is consistent with other anecdotal evidence, including the observations of APHIS port 

veterinarians. It is also consistent with trade statistics that classify cattle imports by the animals’ weight, 

thereby providing a strong clue as to their age. In 2010, for example, 56.0 percent of all cattle imports 

from Mexico weighed less than 200 kilograms (KG), a weight category likely to be comprised almost 

entirely of cattle less than 12 months of age. Cattle imports from Mexico in 2010 weighing from 200 KG 

to less than 320 KG, which accounted for 42.6 percent of all cattle imports from Mexico that year, are 

likely to be comprised almost entirely of cattle between 12 and 24 months of age. Many cattle weighing 

320 KG or more (1.4 percent of all 2010 imports from Mexico) are also likely to be less than 24 months 

of age. 
5 

livestock market, given the added cost of transporting the animals to the United States. The 

proposed rule would not remove that disadvantage. Therefore, we believe importation of more 

than a minimal number of live bovine from countries other than Canada and Mexico would be 

highly unlikely, with or without the proposed rule in effect.6

 Nearly all of the 36 countries 

subject to the BSE ban on live bovines are located in Europe. 

Products Derived from Bovines 

The potential for increased U.S. imports of bovine-derived products under this proposed 

rule is greater than that for live bovines, if for no other reason than the former can be shipped 

more easily and at less cost. For foreign exporters of bovine products, geographical proximity to 

the U.S. market is not necessarily predictive of export potential, as evidenced by imports from 

Australia and New Zealand. Nevertheless, any impact of the proposed rule on bovine product 

imports would likely be at most minimal. 

We expect that this rule would have little or no impact on imports from Argentina, 

Australia, Brazil, Canada, New Zealand, and Uruguay. These six countries have been the source 

of nearly all U.S. imports of bovine products in recent years.7 Over the five-year period, 2006-

 

6

 Imports of live bovines from regions classified as being of undetermined risk for BSE would be 

prohibited under this proposed rule. Therefore, some regions that are not currently subject to any BSErelated restrictions under APHIS regulations would be prohibited from shipping live bovines to the 

United States under this proposed rule. However, the prohibition should have little or no practical impact, 

as the United States has imported only one live bovine since 1996 from any region currently classified by 

the OIE as undetermined risk (from Guatemala in 2002). 

7

 Unless noted otherwise, “bovine products” in this analysis includes commodities categorized by the 

Harmonized Tariff Schedule (HTS) as meat of bovine animals (fresh/chilled, frozen); bovine edible offal 

(fresh/chilled, frozen); bovine meat and edible offal, cured; beef sausage and similar products; and bovine 

meat and edible offal, not elsewhere specified, prepared or preserved. The HTS does not offer the level 

of detail necessary to identify all of the products specified by this proposal. It does not, for example, 

allow for the disaggregation of imports of meat and meat products derived from animals over and under 

12 months of age at the time of slaughter, a factor affecting certain imports from OIE countries of 

undetermined risk. Nor does the HTS allow for the identification of imports of ruminant meat and bone 

meal (MBM), or products that contain ruminant MBM as an ingredient, possibly including some pet 
6 

2010, they accounted for 93 percent of all U.S. bovine product import volume (and 92 percent of 

the import value).8

 Imports from each of the six countries should continue essentially unchanged 

and without interruption, because the protocols in place in those countries are already in full 

compliance with the criteria that would be established by this proposed rule. In this regard, for 

imports from Argentina, Australia, New Zealand, and Uruguay—all of which are APHISproposed negligible risk countries for BSE that have never reported a case of BSE—the product 

import conditions related to a ruminant-to-ruminant feed ban would not be a factor.9 

Imports from Canada and Brazil, both of which we are proposing to recognize as 

controlled risk regions for BSE, already satisfy, by way of FSIS requirements, the proposed 

requirement that products from regions of controlled risk for BSE not contain mechanically 

separated meat from the skull and vertebral column of animals over 30 months of age. Also by 

way of FSIS requirements, all six countries already satisfy the proposed requirement for 

satisfactory ante- and post-mortem inspections, and Canada and Brazil already satisfy the 

proposed provisions prohibiting the export of certain animal tissues and certain animal stunning 

or pithing.10 

 

foods. To the extent that the volumes and values shown in this analysis for U.S. imports of bovine 

products include products unaffected by this proposal, or exclude products affected by this proposal, those 

data overstate or understate imports of affected commodities. However, any such overstatement or 

understatement is minor relative to overall U.S. bovine product imports. 

8

 During the 5-year period, 2006-2010, U.S. imports of bovine products from all sources averaged 0.92 

million metric tons annually. 

9

 For negligible risk regions that have never reported a case of BSE, there would be no product import 

conditions related to the date of a feed ban. However, we are proposing that in countries of negligible 

risk for BSE where there has been an indigenous case of BSE, the commodity be derived from 

bovines that passed ante-mortem and post-mortem inspection and were subject to a ban on the 

feeding of meat and bone meal or greaves derived from ruminants to ruminants. 

10 With certain exceptions, the prohibition on animal tissue imports from countries of controlled risk for 

BSE covers: (a) tonsils and distal ileum from animals of any age; and (b) brains, eyes, spinal cord, skull 
7 

The volume of imports from the 36 (primarily European) countries prohibited from 

shipping bovine products to the United States would be likely insignificant. (Most of these 

countries are classified by the OIE as either controlled or negligible risk for BSE.) Even prior to 

the prohibition on ruminant meat, meat products, and other edible products from all of Europe in 

1997, U.S. imports of bovine products from the 36 countries were negligible when judged 

against total U.S. imports of those commodities.11 In none of the years from 1990 through 1996 

did the volume of U.S. bovine product imports from all 36 countries account for more than 0.6 

percent of the volume of those imports from all countries combined. In 1996, the year 

immediately prior to the prohibition of most ruminant commodities from all of Europe, U.S. 

imports of bovine products from all 36 countries combined totaled 1,146 metric tons, with a 

value of $5.4 million. By comparison, overall U.S. imports of bovine products that year totaled 

730,270 metric tons, with a value of $1.38 billion.12 

In 1996, U.S. imports of bovine products from all 36 countries were spread over 11 

different product categories. In none of those categories did the volume of U.S. imports from all 

36 countries combined exceed 828 metric tons; for 9 of the 11 categories, the volume of U.S. 

imports from all 36 countries combined was 87 metric tons or less. Moreover, for each of the 

two categories that did exceed 87 metric tons—bovine cuts with bone in (fresh/chilled) at 119 

 

and vertebral column from animals over 30 months of age at the time of slaughter. For countries of 

negligible risk for BSE such as Argentina, Australia, New Zealand, and Uruguay, such provisions would 

not apply. 

11 BSE-related restrictions on imports of ruminant products were first established by APHIS in 1991, but 

the restrictions did not prohibit beef imports if certain conditions were met. In late 1997, APHIS 

prohibited ruminant and ruminant product imports from all of Europe. (Imports from Japan were 

prohibited in September 2001 but the prohibition was lifted—for whole cuts of boneless beef only—in 

December 2005.) 

12 Department of Commerce, U.S. Census Bureau, as reported by USDA Foreign Agricultural Service. 
8 

metric tons and bovine meat (prepared/preserved) at 828 metric tons—the volume of imports 

from the 36 countries accounted for less than two percent of the volume of U.S. overall imports 

of these commodities. For 9 of the 11 categories, the 36 countries’ combined share of total U.S. 

imports was no higher than 7.8 percent; for beef sausages (canned) and beef sausages (in airtight 

containers, but not canned), the 36 countries’ combined share of total U.S imports was 77 

percent and 100 percent, respectively, but the volume of imports of those products was 

miniscule.13 These data indicate that, in the past, the 36 countries have not been a source of 

significant quantities of bovine products for the U.S. market. 

Nor does the current trade climate suggest a significant volume of imports from the 36 

countries in the future, at least in the near term. There are a number of reasons. First, U.S. 

imports of bovine products, including beef, have been in decline, a situation that makes it 

increasingly difficult for foreign exporters to compete in the U.S. market.14 Second, while 

bovine product exports by the European Union (EU-27) more than doubled in nominal value in 

five years, from $0.43 billion in 2006 to $1.01 billion in 2010, the value of bovine product 

imports by EU-27 member countries in 2010 ($2.1 billion) was twice the value of their bovine 

product exports.15 The EU-27 continues to be a large net importer of bovine products overall. 

 

13 Ibid. In 1996, the U.S. imported 22 metric tons of beef sausage (canned) and 0.1 metric ton of beef 

sausage (in airtight containers, not canned) from all sources, including the 36 countries. During the 

period, 2006-2010, Brazil was the source of 94 percent and Canada was the source of 3 percent of U.S. 

imports of all beef sausage (including sausage not in airtight containers). Annual imports over these five 

years averaged 838 metric tons. 

14 U.S. imports of bovine products from all sources over the five years, 2006-2010, fell by 23 percent in 

volume (from 1.03 million metric tons to 0.79 million metric tons) and by 11.6 percent in nominal value 

(from $3.3 billion to $2.9 billion). 

15 Data for the EU-27 members exclude intra-EU trade. While member countries of the European Union 

for the most part match the European regions listed in 9 CFR § 94.18, for which importation of meat and 

edible products from ruminants are restricted due to BSE, there are some differences. EU-27 members 

not listed in § 94.18 are Cyprus, Estonia, Latvia, Lithuania, and Malta. European regions listed in § 94.18 
9 

Emerging markets, such as Russia, are likely to take a growing share of Europe’s bovine product 

exports.16 

Over the five years, 2006-2010, EU-27 bovine product exports averaged 201,545 metric 

tons. Even if it is assumed that 5 percent (10,077 metric tons) of those exports were diverted to 

the U.S. market as a result of the proposed rule, imports from the EU-27 countries would be 

equivalent to only about 1 percent of total U.S. bovine product imports, which averaged 919,276 

metric tons over the same period. 

Imports of boneless beef from Japan, which is classified by the OIE as a country of 

controlled risk for BSE and which APHIS likewise is proposing to classify as controlled risk for 

BSE, would be unaffected by the proposal.17 This is because those imports already satisfy, 

largely by way of FSIS requirements, the proposed requirements for imports from regions of 

controlled risk for BSE. Any new imports from Japan, which is allowed to ship whole cuts of 

boneless beef to the United States under certain conditions, would likely be miniscule. Over the 

15-year period from 1990 to 2004, Japan’s exports of bovine products worldwide never exceeded 

772 metric tons in any one year.18 Given the aforementioned factors, as well as U.S. import 

 

that are not EU-27 members are Albania, Andorra, Bosnia-Herzegovina, Croatia, the Federal Republic of 

Yugoslavia (now Kosovo under UN Security Council Resolution 1244, Montenegro, and Serbia), the 

former Yugoslav Republic of Macedonia, Liechtenstein, Monaco, Norway, San Marino, and Switzerland. 

16 The nominal value of Russian Federation bovine product imports rose 40 percent over the five-year 

period, 2006-2010, from $1.69 billion to $2.37 billion. 

 

17 Over the five-year period, 2006-2010, Japan’s annual exports of boneless cuts to the United States 

averaged 210 metric tons, less than 0.03 percent of all U.S. boneless cut imports. Beef imports from 

Japan are a unique product that serves a high-priced specialty market. The specialty meat, called "Wagyu 

beef," comes from cattle genetically predisposed to intense marbling. The term “Kobe beef” refers to 

Wagyu beef that is produced in the Kobe area of Japan. 

18 United Nations Statistics Division. Japan’s exports of beef sausages, if any, are not included. 

 
10 

history, we believe this proposed rule would be unlikely to result in a significant volume of 

imports from the 36 countries listed in 9 CFR § 94.18. 

Finally, although this proposed rule has the potential to affect imports from countries 

other than Argentina, Australia, Brazil, Canada, New Zealand, Uruguay, and the 36 countries 

listed in 9 CFR § 94.18, we believe that any such impact would be minimal. Imports from such 

other countries are not currently subject to BSE-related restrictions under APHIS regulations, but 

would be subject to BSE-related restrictions under this proposed rule. Over the five years, 2006-

2010, annual imports from such other countries as a group averaged 6 to 7 percent of all U.S. 

bovine product imports by volume (7 to 8 percent by value), with virtually all of the products 

coming from Mexico, Nicaragua, and Costa Rica.19 Imports from Mexico, which we are 

proposing to recognize as a region of controlled risk for BSE, would likely be unaffected by the 

proposed rule, because such imports already meet the proposed requirements largely by way of 

FSIS requirements. 

The potential impact of this proposed rule on imports from Nicaragua and Costa Rica, 

which we are proposing to recognize as regions of undetermined risk for BSE, should be 

minimal at most. This is because almost all imports from those two countries are of boneless 

beef that already satisfy the proposed rule’s requirements, largely by way of FSIS 

requirements.20

The rule’s potential impact on imports from other countries in this grouping (i.e., other 

than Mexico, Nicaragua, and Costa Rica) is uncertain. As regions of undetermined risk for BSE, 

 

19 Together, Mexico, Nicaragua, and Costa Rica were the source of 96 percent of all U.S. imports of 

bovine products from these other countries, 2006-2010. 

20 Over the five-year period, 2006-2010, boneless products comprised 95 percent of Nicaragua’s and 

Costa Rica’s bovine product exports to the United States (USDA FSIS Office of International Affairs). 
11 

they would be required to certify that the bovines from which certain commodities intended for 

export were derived were not fed meat and bone meal or greaves derived from ruminants, a 

requirement they are not subject to now. Whether these other countries would be able to make 

such a certification is unknown. Also, as countries of undetermined risk for BSE, these other 

countries would be prohibited from exporting products that contain mechanically separated meat 

from the skull and vertebral column of animals over 12 months of age. Currently, they are 

prohibited from exporting products that contain mechanically separated meat from the skull and 

vertebral column of animals over 30 months of age.21 Under this proposed rule, these other 

countries would have the option of requesting that APHIS conduct an evaluation to determine if 

they qualify for a BSE risk classification other than undetermined. However, even if shipments 

from these other countries were to cease altogether under the proposed rule, the impact on the 

overall volume of U.S. bovine product imports would be insignificant, given their extremely 

small share (0.3 percent by volume and 0.4 percent by value, 2006-2010). 

In sum, we believe that any impact of this proposed rule on imports into the United States 

of products derived from bovines would be minimal at most. In this regard, a very possible 

scenario is one in which a small volume of new imports (from the 36 countries listed in 9 CFR § 

 

21 In addition to the feed ban certification for certain products and the prohibition on products that contain 

mechanically separated meat from the skull and vertebral column of animals over 12 months of age, the 

conditions for imports from BSE-undetermined risk regions: (1) require satisfactory ante- and postmortem animal inspections; (2) prohibit the import of certain animal tissues; and (3) prohibit the import 

of products derived from animals subjected to an air- or gas-injected stunning process or a pithing 

process. With certain exceptions, the OIE prohibition on animal tissue exports from undetermined risk 

countries covers: (a) tonsils and distal ileum from animals of any age; (b) brains, eyes, spinal cord, skull 

and vertebral column from animals over 12 months of age at the time of slaughter; and (c) nervous and 

lymphatic tissues exposed during the deboning process. 
12 

94.18) is offset entirely or in large part by a small decline in the volume of imports from other 

countries. 

Cervids and Camelids and their Products 

Live Cervids and Camelids 

Under this proposed rule, the removal of the prohibition of the importation of live cervids 

and camelids from the 36 countries listed in 9 CFR § 94.18 would likely have little or no impact. 

Cervids and camelids are not typically imported into the United States from those countries. The 

trade data indicate that the United States has not imported any live cervids or camelids from the 

36 countries since at least 1990. Furthermore, nearly all of the 36 countries subject to the ban are 

located in Europe, a situation that puts potential exporters in those countries at a significant 

competitive disadvantage in the U.S. market, given the added cost of transporting the animals to 

the United States. This proposed rule would not remove that disadvantage. Importation of more 

than a very small number of live cervids and camelids from the 36 countries, therefore, would be 

highly unlikely, with or without the proposed rule in effect. 

Products Derived from Cervids and Camelids 

We anticipate that the volume of imports from the 36 (primarily European) countries 

listed in 9 CFR § 94.18 of products derived from cervids or camelids would likely be insignificant 

under the proposed rule. Before the prohibition of ruminant meat, meat products, and other 

edible products from all of Europe in 1997, U.S. imports of meat and edible offal of deer from 

the 36 countries were negligible when judged against total U.S. imports of those commodities.22 

 

22 A search of the trade data shows that since 1990, U.S. imports of cervid and camelid products from all 

sources have been in three different product categories: (1) meat and edible offal of deer; (2) deer skins; 

and (3) camel hair. Only meat and edible offal of deer would be affected by this proposal; APHIS 

regulations do not currently restrict or prohibit the importation of deer skins or camel hair. 

 
13 

In none of the years from 1990 through 1996 did the volume of U.S. imports of meat and edible 

offal of deer from all 36 countries account for more than 3.3 percent of the volume of those 

imports from all countries combined, and in none of those years did the volume of U.S. imports 

of meat and edible offal of deer from all 36 countries combined exceed 23 metric tons.23 Nor, as 

is the case with bovine products discussed above, does the current trade climate suggest a 

significant volume of imports of meat and edible offal of deer from the 36 countries in the near 

term. U.S. imports of meat and edible offal of deer have declined since 2005, a situation that 

makes it increasingly difficult for foreign exporters to compete in the U.S. market.24 

The volume of U.S. imports of camelid products is very small. Their annual value 

averaged less than $50,000 over the five-year period, 2006-2010, and 90 percent of those imports 

were supplied by Canada and China.25 

Expected Benefits and Costs, and Alternatives to the 

Proposed Rule 

As discussed, this proposed rule is expected to have, at most, a minimal impact on U.S. 

imports of live bovines, cervids, camelids, and their products. Consumers benefit from imports 

to the extent that consumer choice is broadened and the increased supply of the imported 

commodity leads to a price decline.26 We anticipate that the proposed rule would have little 

 

23 Department of Commerce, U.S. Census Bureau, as reported by USDA Foreign Agricultural Service. 

24 Ibid. For the five years, 2006-2010, the annual value of U.S. imports of meat and edible meat offal of 

deer averaged $10.8 million. Over 99 percent was supplied by New Zealand. The volume of imports 

declined from 1,303 metric tons in 2006, to 945 metric tons in 2010. 

 

25 Ibid. 

26 Imports of a commodity generally serve to increase net social welfare. To the extent that consumer 

choice is broadened and the increased supply of the imported commodity leads to a price decline, gains in 

consumer surplus will outweigh losses in domestic producer surplus. (Consumer surplus is the difference 
14 

impact on consumer choice or import volumes. Likewise, we anticipate little or no impact for 

U.S. businesses because of changes in import volumes. 

Although the impact of this proposed rule on U.S. consumers and producers is expected 

to be minimal, the benefits of the rule are expected to outweigh its costs. Leaving the bovine 

regulations unchanged would be unsatisfactory, because it would perpetuate the current situation 

in which our BSE-related import conditions are not fully supported by scientific evidence. 

Additionally, maintaining the status quo would not provide an opportunity to recognize a 

region’s BSE risk status in a more timely fashion than is possible under current regulations. 

Another alternative, amending the BSE regulations related to the importation of bovines and 

bovine-derived products to match precisely the OIE Code without allowing for modification 

deemed necessary by APHIS, would also, we believe, be unsatisfactory, because it would not 

allow APHIS to independently interpret the scientific literature and findings that underlie OIE 

risk categorization recommendations. Making no changes to the regulations that govern the 

importation of cervids and camelids would also be unsatisfactory, because it would perpetuate an 

unnecessary constraint on trade in those commodities. 

Initial Regulatory Flexibility Analysis 

The Regulatory Flexibility Act (RFA) requires agencies to evaluate the potential effects 

of their proposed and final rules on small businesses, small organizations and small 

governmental jurisdictions. Section 603 of the Act requires agencies to prepare and make 

 

between the amount a consumer would be willing to pay for a good and the amount actually paid. 

Producer surplus is the difference between the amount a seller actually receives for a good and the 

amount he would be willing to receive.) 
15 

available for public comment an initial regulatory flexibility analysis that describes expected 

impacts of a proposed rule on small entities. 

The purpose of the proposed rule is to amend the import regulations related to BSE such 

that they would continue to sufficiently guard against the introduction of BSE into the United 

States, while making the bovine and bovine product import restrictions more reflective of current 

scientific thinking. The proposed process for classifying regions as to BSE risk would be based 

on a comprehensive review of relevant, internationally accepted scientific literature and would 

be consistent with the process employed by the OIE. The proposed process would use risk 

categories for bovines and bovine products (negligible, controlled, and undetermined) and 

criteria that are also used in the OIE Code. Whether a bovine or a bovine-derived product would 

be eligible for importation into the United States, and under what conditions, would in many 

cases be determined by the BSE category of the region from which the animal or product 

originates. We are also proposing to remove BSE restrictions on the importation of cervids and 

camelids and products derived from such animals. 

The legal basis for this proposed rule is the Animal Health Protection Act (7 U.S.C. 8301 

et seq.), by which the Secretary of Agriculture may restrict the importation of any animal or 

article if the Secretary determines that the prohibition is necessary to prevent the introduction 

into or dissemination within the United States of any pest or disease of livestock. The objective 

is to bring the import regulations related to BSE into closer alignment with our scientific 

understanding of this disease. 

Trade in live bovines, cervids, and camelids, and their products, has the potential to affect 

U.S. entities engaged in the production, processing, and sale of those commodities. They include 

cow-calf producers, cervid and camelid producers, feedlot establishments, slaughtering 
16 

establishments, meat packing and processing establishments, meat wholesalers, importers and 

exporters, grocery stores and meat markets, and manufacturers of cosmetics and 

pharmaceuticals.27 Sales and employment information underscores the prevalence of small 

entities in the industries potentially affected, as categorized by the North American Industry 

Classification System (NAICS). The small-entity estimates are based on U.S. Small Business 

Administration (SBA) size standards. 

In terms of numbers of entities, beef cattle ranching and farming (NAICS 112111) is the 

largest single industry that could be affected. In 2007, there were 656,475 establishments in this 

industry, and their average annual sales were less than $42,000, significantly below the smallentity standard of not more than $750,000.28 That same year, there were 57,318 entities engaged 

in dairy cattle and milk production (NAICS 112120), and their average annual sales were about 

$606,000, much higher than for beef producers but still well below the small-entity standard of 

$750,000.29 In 2007, there were 31,065 cattle feedlots (NAICS 112112). Average receipts for 

these establishments were $974,000, compared to the small-entity threshold of $2.5 million.30

For the industries, animal (except poultry) slaughtering (NAICS 311611) and meat 

processed from carcasses (NAICS 311612), the small-entity standard is not more than 500 

employees. Based on numbers of full-year establishments in these industries in 2007 (1,597 and 

 

27 Animal products such as gelatin are used in the manufacture of cosmetics and pharmaceuticals. 

28 USDA NASS, 2007 Census of Agriculture. 

http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_1_US/st99_1_046_04

6.pdf 

29 Ibid. 

30 Ibid. 
17 

1,379, respectively), 92 percent and 80 percent of the establishments employed fewer than 100 

employees.31

The small-entity standard for meat and meat product merchant wholesalers (NAICS 

424470) is not more than 100 employees. Of the 2,295 full-year establishments in this industry 

in 2007, over 96 percent were small according to this criterion.32 For supermarkets and other 

grocery (except convenience) stores (NAICS 445110), there were 55,926 establishments that 

operated throughout 2007 and their average receipts were $8.2 million, significantly below the 

small-entity threshold of $30 million.33 The small-entity standard for meat markets (NAICS 

445210) is annual receipts of not more than $7 million; average receipts for the 5,108 

establishments in this industry in 2007 were about $1 million.34

Clearly, most businesses that may be directly affected by the proposed rule are small. 

However, as has been described, any effects in terms of changes in U.S. imports of bovines and 

bovine products are expected to be minor. This proposed rule contains no mandatory reporting, 

recordkeeping, or other compliance requirements for U.S. entities. 

The RFA requires agencies to identify, to the extent practicable, any Federal rule that 

may duplicate, overlap or conflict with this proposed rule. APHIS has not identified any 

duplication, overlap, or conflict of this proposed rule with other Federal rules. 

 

31 Department of Commerce, 2007 Economic Census. 

http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-ds_name=EC0731I1&-_lang=en. 

 32 Department of Commerce, 2007 Economic Census. 

http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-

_skip=2900&-ds_name=EC0742SSSZ2&-_lang=en 

33 Department of Commerce, 2007 Economic Census. 

http://factfinder.census.gov/servlet/IBQTable?_bm=y&-geo_id=&-fds_name=EC0700A1&-_skip=900&-

ds_name=EC0744SSSZ1&-_lang=en

34 Ibid.
18 

Finally, the RFA requires agencies to describe any significant alternatives to the proposed 

rule that accomplish the stated objectives of applicable statutes and that minimize any significant 

economic impact of the proposed rule on small entities. As indicated above, this rule is expected 

to have, at most, a minimal economic impact on small entities. 

We invite public comment on the rule’s potential economic impact, including any 

comment on the potential impact on small entities.