### United States Department of Agriculture Animal and Plant Health Inspection Service February 2014 Initial Regulatory Flexibility Analysis
Proposed Rule APHIS

- 2013

- 0061 RIN 0579

- AD96 Importation of Pork and Pork Products from Mexico

Policy & Program Development Policy Analysis & Development

### Summary
This analysis examines impacts for U.S. small entities of a rule that w ould amend APHIS regulations by allowing importation of fresh pork and pork products from an APHIS

- defined Mexican CSF region under conditions that mitigate the risk of introduction of classical swine fever into the United States. The APHIS

- defined Mexican CSF region would consist of all Mexican States except the nine we current ly recognize as CSF

- free and Chiapas. The conditions under which we would allow pork and pork products to be imported from the proposed APHIS

- defined Mexican CSF region pertain to sanitary and biosecurity requirements at the slaughtering facilities and a t the farms where the swine are raised from which the pork and pork products derive. The proposed rule is in response to requests from Mexico for an expansion of the region from which pork and pork products can be exported to the United
States. We do no t have information on how the proposed rule may affect Mexico’s capacity to produce pork and pork products considered free of CSF (as well as meet all other U.S. import requirements). We therefore are not able to estimate the extent to which the proposed rule may affect the volume of pork and pork products exported by Mexico to the United States, and in
turn, impact U.S. pork producers , most of which are small entities. However, even in the event that U.S. imports of pork and pork products from Mexico wer e to triple because of the proposed rule, they would still comprise less than 1 percent of the U.S. market for these commodities

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### Table of Contents Summary

................................ ................................ ................................ .............................. i Introduction

................................ ................................ ................................ ......................... 1 Economic Effects of the Proposed Rule

................................ ................................ ............. 2 Reasons Action is Being Considered

................................ ................................ .................. 3 Objectives of and Legal Basis for the Rule

................................ ................................ ........ 3 Potentially Affected Small Entities

................................ ................................ ..................... 4 Projected Reporting, Recordkeeping, and Other Compliance Requirements

..................... 4 Duplication, Overlap, or Conflict with Existing Rule s and Regulations

............................ 4 Alternatives to minimize Significant Economic Impacts of the Rule

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### Introduction
The Regulatory Flexibility Act requires agencies to evaluate the potential effects of their proposed and final rules on small businesses, small organizations and small governmental jurisdictions. This initial regulatory flexibility analysis describes expected impacts of this proposed r ule on small entities, as required by section 603 of the Act. The proposed rule would amend APHIS regulations by adding a new section to 9 CFR part 94 allowing importation of fresh pork and pork products from an APHIS

- defined Mexican CSF region under condi tions that mitigate the risk of introduction of classical swine fever into the United States. The APHIS

- defined Mexican CSF region would consist of all Mexican States except the nine we currently recognize as CSF

- free and Chiapas. The former would retain their
CSF

- free status and could continue to export live swine and pork products to the United States, subject to the conditions in § 94. 32 . We would not allow pork or pork products to be imported into the United States from Chiapas, however, because we have determined that such imports would present an unacceptably high risk of the spread of CSF to the U.S. swine population. We would continue to prohibit the importation of live swine f rom the APHIS

- defined Mexican CSF region because imports of live swin e are associated with higher levels of CSF risk than imports of pork and pork products. The amended regulations would restrict U.S. imports of pork and pork products from the proposed APHIS

- defined Mexican CSF region by requiring that the commodities be d erived from swine raised on farms operating under a high level of biosecurity and where CSF antigen exposure has not been detected ; and from swine not commingled with swine from herds not operating under the required sanitary standards

. Under the proposed rule, pork and pork products originating and imported from the proposed APHIS

- defined Mexican CSF region may

1not be co m mingled with pork and pork products derived from swine not raised under the required level of sanitary standards. Establishments that s laughter the swine from the pork and pork products are derived would have to allow periodic inspection and evaluation of their facilities, records, and operations by APHIS. 

### Economic Effects of the Proposed Rule
At present, nine States in Mexico are recogn ized as CSF

- free and the rest are considered
CSF

- affected. We do not have information on Mexico’s capacity to produce pork and pork products that could be exported to the United States from the proposed APHIS

- defined Mexican CSF region, that is, that woul d meet the stringent sanitary and biosecurity requirements in the

new § 94. 34

. As a next best approach for considering possible impacts of the proposed rule, we can look at the relative significance of current levels of pork and pork product imports from Mexico. The annual value of U.S. production of pork and pork products for the three years, 2010

- 2012, averaged nearly $ 1 5.86 billion. Over the same three

- year period, the value of U.S. exports of pork and pork products averaged about $4.35 billion , and the average annual value of imports

was about $0.96 billion . Annual U.S. domestic supply of pork and pork products (production minus exports plus imports) for the three years had a total value of about $12.47 billion. The annual value of U.S. imports of pork and pork products from Mexico over the three years, 2010

- 2012, averaged about $31 million, or less than 0. 3 percent of U.S. domestic supply. Thus , even in the event that U.S. imports of pork and pork products from Mexico were to triple because of the proposed rule, they would still comprise less than 1 percent of the U.S. market for these commodities

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### Reasons Action is Being Considered
The proposed rule is in response to requests from Mexico for an expansion of the region from which pork and pork pr oducts can be exported to the United States. The rule would amend the regulations that allow commercial shipments from Mexico by defining a low

- risk CSF region composed of all the States not currently recognized as CSF

- free except Chiapas. APHIS has dete rmined that pork and pork products imported from the APHIS

- defined Mexican CSF region would present a low risk of int ro ducing CSF into the United States swine population, provided that certain conditions designed to mitigate that risk are met. The conditi ons pertain to sanitary and biosecurity requirements at the slaughtering facilities and at the farms where the swine are raised from which the pork and pork products derive. 

### Objectives of and Legal Basis for the Rule
APHIS currently classifies nine Mexic an States as CSF

- free . The proposed rule would allow importation of pork and pork products from an APHIS

- defined Mexican CSF region that conform s to the sanitary and biosecurity requirements newly set forth in 7 CFR 94. 34

. This action would meet APHIS’ commitment under the World Trade Organization Agreement on Sanitary and Phytosanitary Measures to allow the importation of animal products under the least restrictive measures consistent with ensuring sanitary and phytosanitary security. The legal basis for the proposed rule is the Animal Health Protection Act , which authorizes the Secretary of Agriculture to prohibit or restrict the importation of animals, animal products, or other articles when necessary to prevent the introduction or disseminatio n of diseases, such as CSF, or pests of livestock.

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### Potentially Affected Smal l Entities
Pork production is included in the North American Industry Classification System within hog and pig farming (NAICS 112210), for which the Small Business Administration’s small

entity standard is annual receipts of not more than $750,000. In 2007, there we re 30,546 operations classified within this NAICS category, and the average value of the agricultural products sold by these farms was approximately $593, 000 , which is below the small

- entity standard. 1 We can assume that most pork producers in the United States are small entities

. As

no ted above, even in the event that U.S. imports of pork and pork products from Mexico were to triple because of the proposed rule, they would still comprise a minute share of the U.S. market for these commodities. 

### Projected Reporting, Recordkeeping, and Other Compliance Requirement s
Reporting and recordkeeping requirements associated with the proposed rule are discussed in the rule under the heading "Paperwork Reduction Act." 

### Duplication, Overlap , or Conflict with Existing R ules and Regulations

APHIS has not identified any duplication, overlap, or conflict of the proposed rule with other Federal rules.

1 USDA NASS, 2007 Census of Agriculture , Volume 1, Chapter 1, Table 46. Selected Characteristics of Farms by North American Industry Classification System. http://www.agcensus.usda.gov/Publications/2007/Full_Report/Volume_1,_Chapter_1_US/st99_ 1_046_046.pdf 4

### Alternatives to minimize Significant Economic Impacts of the Rule

We do not have information on how the proposed rule may affect Mexico’s capacity to produce pork and pork products considered free of CSF ( and meet all other U.S. import requirements). We therefore are unable to estimate the extent to which the proposed rule may affect the volume of pork and pork products expo rted by Mexico to the United States. We have prepared this initial regulatory flexibility analysis because our understanding of possible economic effects of the rule on small entities is incomplete. However, even if the rule were to result in a tripling of pork and pork product imports from Mexico, they would still comprise less than 1 percent of the U.S. market for these commodities. In the absence of apparent significant economic impacts, we have not identified alternatives that would minimize such imp acts.

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