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Business & Economy Briefs

Torrijos changes the agricultural quarantine system

by Eric Jackson

On February 22, President Torrijos and the Cabinet Council issued a decree creating the Panamanian Food Safety Authority, which will replace the Ministry of Agricultural Development's Agricultural Quarantine office and several other parts of different ministries and semi-autonomous governmental bodies. Designees of the ministers of health and of agricultural development will rotate as presidents of the new authority's board of directors and there will be a administrator chosen for a seven-year term. A press release by the Presidencia argued that the new organizational structure will "centralize in only one institution all of the issues related to the importation of food, guaranteeing an elevated level of health protection."

The president was given the power to legislate about this issue and several other matters during the January and February legislative recess by the National Assembly. After the current legislative session began on March 1, the PRD-PP majority coalition voted down an opposition move to debate the contents of the resulting decrees in the legislature.

The decree also provides that "the importation of food does not require any prior permit, license or authorization," provided that the authorities of the country of origin certify that it meets Panamanian phyto-sanitary standards.

Essentially that change ratifies a commitment made in a once-secret letter from the Torrijos administration to the US Trade Representative that Panama would accept US food certifications at face value. That commitment led to the resignation of Laurentino Cortizo as agriculture minister and the walkout of the cattle ranchers's organization ANAGAN from the advisory board of the free trade talks.

The new decree may actually go well beyond the commitment made to the United States because it applies to the decisions of the agricultural authorities of any country. For example, because in most South American countries hoof-and-mouth disease (aftosis) is endemic in their cattle herds, Panama generally prohibits the importation of South American beef. But what if Argentina now certifies that its meat conforms to Panamanian standards?

Because the United States has had isolated bovine spongiform encephalopathy (mad cow or BSE) cases and Panama's restrictions on US beef resulting from these was the principal bone of contention in trade talks, the big questions that remain with respect to the BSE issue are: whether, if there is another mad cow outbreak in the United States, Panama will set as its standard a ban on beef imports from affected countries and the US Department of Agriculture will adjust its certifications accordingly; and if Panama accepts US inspectors' certifications in the face of new BSE cases, whether Japan and the European Union will then allow Panamanian beef onto their markets.

Panamanian farm organizations generally opposed the decree. Alexis Soto, the economic advisor for the National Agricultural Organization, said that "This is very dangerous…. Just one outbreak of an illness like aftosis or mad cow disorder among our cattle would put an end to our future as an agricultural exporter."

On the other hand, the move was applauded by organizations of the nation's grocers, restaurateurs and food importers, who have long complained of politically motivated quarantine policies that amount to protectionism for certain farm sectors but inconvenience and higher costs for their members.

The new quarantine system might be seen as a way to uncouple a hot button issue for farmers from the free trade talks with the United States. However, if that is the intention there is the risk that the move might simply harden the farm sector's opposition to both a free trade pact and to the Torrijos administration.