New regulations in Mexico threaten to disrupt more than $100 million in organic food trade with the U.S., and the Biden administration has less than three months to address the situation before the requirements take effect.

The law could tear down Mexico’s acceptance of U.S. organic standards — one more rip in the fraying trade relationship between the two countries — but staffing shortages and travel difficulties during the pandemic are complicating matters, according to U.S. government sources who asked not to be named because talks between the countries are ongoing.

“We’ve got to figure this out,” one government source told Agri-Pulse, but also stressed that time is short.

The U.S. is still shipping organic milk, spinach, carrots, apples and pears south of the border with relative ease, but only because the USDA and the Office of the U.S. Trade Representative convinced Mexico to temporarily delay implementation of the law that would force U.S. organic producers to get separate organic certification from the Mexican government or Mexican certifiers before they could sell their products to Mexican buyers.

Mexico did not officially notify the U.S. that it planned to implement the regulations. It was in mid-December that the U.S.-based Organic Trade Association was tipped off that Mexico’s Health, Food Safety, and Quality Agency, or SENASICA, would begin mandating that all U.S. organic exports would need a separate certification to show that they conformed exactly with Mexican standards. In other words, U.S. standards would no longer be deemed equivalent or sufficient.

The regulations were to take effect Dec. 28, threatening U.S. organic food exports that totaled $117 million in 2017, according to the latest U.S. data. Mexico exported $278 million worth of organic commodities to the U.S. in the same year.

USDA and USTR reached out to Mexico and were successful in convincing the government to extend the implementation deadline to June 26, but even that won’t likely give the U.S. enough time to prevent trade losses.

“This requirement is concerning due to the unrealistic timeline for certification, added financial and personnel burdens, and lack of guidance from SENASICA,” the Organic Trade Association said in a March 22 letter to USDA and USTR. “We understand that USDA has been working to gather additional clarity from the Mexican government as well as extend the compliance deadline for organic exporters.”

Mexico has not yet agreed to a U.S. request to further extend the deadline for implementation — the Ley de Productos Orgánicos (LPO) — according to a U.S. government official.

And if it is not extended and implemented as it stands, the U.S. organic sector and U.S. exports will take a hit, says OTA.

“If this policy is enforced, U.S. organic producers will experience significant trade disruptions as certification can take a year or more for organic companies to become certified to a new organic standard,” OTA said in a section of a separate letter to USDA and USTR, in which several farm groups complained about a variety of trade irritations with Mexico. “These un-notified technical barriers to trade will increase costs of exporting to Mexico that include significant staffing expenses, paperwork, and new certification and inspection costs.”

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OTA asked its members how much they expected the new Mexican regulations to cost them annually. The answers ranged from $100,000 to more than $1.5 million, but there is still a lot of uncertainty in the industry.

“Both certifying agencies and exporters are confused, unsure of total certifications costs and scope, and have very little time to come into compliance with this new requirement,” Alexis Carey, OTA's associate director of international trade, said. “It is our understanding that the USDA (Foreign Agricultural Service) office in Mexico City and (USDA’s National Organic Program) are attempting to gain further information in writing from SENASICA.”

One potential motive behind Mexico’s intention to terminate its recognition of U.S. organic standards is that the U.S. does not reciprocate. Mexican producers must get certified by a USDA-approved agent before their products can be marketed as U.S. organic.

USDA’s Agricultural Marketing Service says it is still working with SENASICA on a full equivalency agreement that treats both countries equally, but that assurance may not be good enough anymore.

Nevertheless, AMS says that there are 24 USDA-accredited certifiers operating in Mexico to meet the certification needs of more than 1,600 operations that export organic commodities to the U.S.

And those Mexican operations that have been certified continue to ship crates of organic avocados, blueberries, strawberries and more to U.S. buyers.

And while the United States has not threatened to terminate its certifying operations in Mexico, it is one potential outcome, according to U.S. government and industry sources.

Furthermore, concerns have been mounting in USDA over Mexico’s ability to enforce its own organic standards, a U.S. government official said. USDA has been unable to conduct audits of Mexico’s organic program for more than a year during the pandemic, and that has heightened those concerns, the U.S. official said.

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