MEAT EXPORT-CERTIFICATION POLICY DEVELOPMENT DURING TRADE DISPUTES by DWAYNE D. BYERLY B.S., University of Wyoming, 1999 A THESIS Submitted in partial fulfillment of the requirements for the degree MASTER OF SCIENCE Department of Diagnostic Medicine/Pathobiology College of Veterinary Medicine KANSAS STATE UNIVERSITY Manhattan, Kansas 2006 Approved by: Major Professor Justin J. Kastner, PhDABSTRACT After the discovery of bovine spongiform encephalopathy (BSE) in the United States (U.S.) in December 2003, 53 countries banned U.S. beef. In early 2004 the U.S. Department of Agriculture (USDA) Food Safety and Inspection Service (FSIS) developed new safety regulations; however, while these new regulations helped maintain domestic demand for beef, foreign markets—including the lucrative Japanese beef market—remained closed to U.S. beef. Creekstone Farms Premium Beef, located in Arkansas City, Kansas, submitted a request in February 2004 to the USDA requesting access to BSE test kits to satisfy Japanese import requirements. Creekstone’s plans to test all cattle for BSE and meet Japan’s regulations met opposition from the U.S. government. Later that spring the USDA ruled that Creekstone would not be allowed access to testing kits. This essentially put an end to any developing niche export markets for BSE-tested products. The USDA’s decision was based upon the resurrection of the 1913 Viruses, Serums, Toxins, Antitoxins, and Analogous Products Act. Creekstone’s proposal and USDA’s ruling have begged questions about meat export-certification policy and niche-market program development during trade disputes. History has much to say about both. This research project analyzes two high-profile, admittedly controversial trade disputes and their associated export-certification program development. The first trade dispute involves trichinosis and the for-export microscopic inspection program (for trichinosis in pork) that the U.S. developed to maintain trade with various European nations during the late 1800s and early 1900s. The second dispute involves hormone use in beef cattle production and the development of the current Non-Hormone Treated Cattle program (NHTC) for the European Union. In both historical trade disputes, the U.S. government developed niche-market export-certification programs. The pork dispute illustrates animal disease testing to accomplish both food safety and marketing objectives. Animal testing, meat inspection, and diplomatic correspondence during the trichinosis dispute reflect timeless relevance to current BSE-related trade issues. The hormone dispute shows how scientific evidence, World Trade Organization dispute settlement rulings, and niche market development influence tradedispute decisions. Both trade disputes offer insight for not only BSE-related trade friction, but future sanitary and phytosanitary trade disputes as well.iv TABLE OF CONTENTS LIST OF FIGURES ................................................................................................ v LIST OF TABLES................................................................................................. vi ACKNOWLEDGEMENTS.................................................................................. vii DEDICATION....................................................................................................... ix INTRODUCTION .................................................................................................. x Chapter 1: Export-Certification Policy .................................................................. 1 I. Trade Policy Problems During the 21st Century............................................. 1 a. BSE: A Global Preoccupation..................................................................... 5 b. A Proposal for Privatized Testing............................................................. 15 c. U.S. Beef Export-Certification Policy for Japan...................................... 22 II. Research Questions, Hypotheses, and Methodology .................................. 26 III. Subsequent Chapters................................................................................... 30 Chapter 2: The U.S.-European Dispute over Trichinosis (1878-1906) ............... 33 I. Introduction and Context.............................................................................. 33 II. The U.S.-European Pork War ...................................................................... 34 III. Export-Certification Policy Development .................................................. 44 IV. Conclusion and Lessons Learned ............................................................... 47 Chapter 3: The U.S.-European Union Dispute Over Hormones (1979-present) .. 54 I. Introduction and Context.............................................................................. 54 II. The U.S.-EU Hormone Dispute ................................................................... 55 III. Export-Certification Policy Development .................................................. 69 IV. Conclusion and Lessons Learned ............................................................... 75 Chapter 4: Conclusion........................................................................................... 81 I. Summary....................................................................................................... 81 II. Lessons Learned and Application ................................................................ 82 APPENDICES ...................................................................................................... 90 Bibliography ......................................................................................................... 92vLIST OF FIGURES Figure 1. U.S. Domestic Cattle Prices ....................................................................3 Figure 2. Nations with BSE ..................................................................................10viLIST OF TABLES Table 1. Comparison of Three Historical Trade Disputes ....................................31 Table 2. Estrogen Levels in Various Foods (ng/serving) .....................................62 Table 3. Human Daily Estrogen Production (ng/24 hours) ..................................63 Table 4. Comparison of Three NHTC–Certified Companies ...............................77vii ACKNOWLEDGEMENTS The means by which I entered into