STC Number - 388

US proposed rule for user fees for agricultural quarantine and inspection services

Maintained by: United States of America
Raised by: Mexico
Supported by:
First date raised: March 2015 G/SPS/R/78 paras. 3.11-3.12
Dates subsequently raised: July 2015 (G/SPS/R/79 paras. 3.56-3.57)
October 2015 (G/SPS/R/81 paras. 3.61-3.62)
Number of times subsequently raised: 2
Relevant documents: Raised orally
Products covered:
Primary subject keyword: Other concerns
Keywords: Control, Inspection and Approval Procedures
Status: Not reported
Solution:
Date reported as resolved:

Extracts from SPS Committee meeting summary reports

In March 2015, Mexico raised a concern regarding the United States proposed rule for user fees for agricultural quarantine and inspection services. Mexico was particularly concerned about an increase of over 200% in the inspection services fees for commercial trucks with electronic transmitters, and an increase of 52% of the current fee for other types of commercial trucks. Mexican agricultural exports entered the United States mainly via land. Since Mexico was one of the main trading partners of the United States and the main source of agricultural products, this measure would not only affect transportation costs for Mexico, but it would also have a direct effect on the prices for final consumers, generating inflation and putting at risk small and medium producers and thousands of jobs directly or indirectly related to this sector. Mexico also noted that the measure could be considered discriminatory against Mexican imports, violating the Article 2.3, since most other trading partners did not export via land and traded much smaller volumes with the United States. The regulation also countervailed Members' obligations on transparency, as it had not been officially notified to the WTO. In Mexico's view the regulation was also incompatible with Article 8 and Annex C of the SPS Agreement, which required that any fees imposed for procedures on imported products be limited to the processing cost and be no higher than the actual cost of the services. The Mexican Government and private sector had participated in the consultation procedures and had submitted their concerns. Mexico hoped that its comments would be taken into consideration and invited the United States to comply with the provisions of the SPS Agreement.

The United States noted that the APHIS proposed rule had been published on 25 April 2014. Due to the interest in this proposed rule by stakeholders, the comment period had been extended to 24 July 2014. Comments had been received from over 200 stakeholders and the review by APHIS was still ongoing. The United States assured Mexico that it would carefully consider its and other comments before proceeding with any decisions on the matter.

In July 2015, Mexico recalled its concern on an APHIS proposed rule for user fees for agricultural quarantine and inspection services. Higher transportation costs would result in higher prices for customers, threatening the livelihood of small-scale producers. In Mexico's views the measure violated the MFN principle, as well as Article 8 and Annex C of the SPS Agreement. Mexico urged the United States to take Members' comments into account.

The United States explained that the rulemaking process was still ongoing and that Mexico's comments would be considered before any decision was taken. The United States welcomed future bilateral discussions.

In October 2015, Mexico recalled its concern on an APHIS proposed rule for user fees for agricultural quarantine and inspection services. Higher transportation costs would result in higher prices for customers, threatening the livelihood of small-scale producers. In Mexico's view the measure violated the GATT, MFN principle, as well as Article 8 and Annex C of the SPS Agreement. Mexico requested an update on the draft regulation and urged the United States to take Members' comments into account as well as to comply with the transparency provisions of the SPS Agreement.

The United States explained that the rulemaking process was still ongoing and that Mexico's comments would be considered before any decision was taken.