Importation of Beef From Argentina

DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection Service

9 CFR Part 94

[Docket No. 94-106-5]

RIN 0579-AA71

Importation of Beef From Argentina

AGENCY: Animal and Plant Health Inspection Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: We are amending the regulations concerning the importation of

animal products to allow, under certain conditions, the importation of

fresh, chilled or frozen beef from Argentina. This change is warranted

because it removes unnecessary restrictions on the importation of meat

from Argentina into the United States.

EFFECTIVE DATE: August 25, 1997.

FOR FURTHER INFORMATION CONTACT: Dr. Gary Colgrove, Chief Staff

Veterinarian, National Center for Import and Export, VS, APHIS, 4700

River Road Unit 38, Riverdale, MD 20737-1231, (301) 734-8590.

SUPPLEMENTARY INFORMATION:

Background

The Animal and Plant Health Inspection Service (APHIS), United

States Department of Agriculture (USDA), has promulgated regulations

regarding the importation of animals and animal products in order to

guard against the introduction into the United States of animal

diseases not currently present or prevalent in this country. These

regulations are set forth in the Code of Federal Regulations (CFR),

title 9, chapter 1, subchapter D.

On April 18, 1996, we published in the Federal Register a proposed

rule (61 FR 16978-17105, Docket No. 94-106-1) to revise the regulations

in six different parts of 9 CFR to establish importation criteria for

certain animals and animal products based on the level of disease risk

in specified geographical regions. In proposing the amendments to the

regulations, we stated that we considered the proposed regulatory

changes to be consistent with and to meet the requirements of

international trade agreements that had recently been entered into by

the United States.

We solicited comments concerning our proposal for 90 days ending

July 17, 1996. During the comment period, several commenters requested

that we extend the period during which we would accept comments. In

response to these requests, on July 11, 1996, we published in the

Federal Register a notice that we would consider comments on the

proposed rule for an additional 60 days ending September 16, 1996 (61

FR 36520, Docket No. 94-106-4). During the comment period, we conducted

four public hearings at which we accepted oral and written comments

from the public. These public hearings (announced in the Federal

Register on May 6 and May 29, 1996, 61 FR 20190-20191 and 26849-26850,

Docket Nos. 94-106-2 and 94-106-3, respectively) were held in

Riverdale, MD; Atlanta, GA; Kansas City, MO; and Denver, CO.

We received 113 comments on the proposed rule on or before

September 16, 1996. These comments came from representatives of State

and foreign governments, international economic and political

organizations, veterinary associations, State departments of

agriculture, livestock industry associations and other agricultural

organizations, importing and exporting associations, members of

academia and the research community, brokerage firms, exhibitors,

animal welfare organizations, and other members of the public.

Based on our review of the comments received, it is clear that

drafting a final rule in response to recommendations submitted by

commenters will require close analysis of numerous and complex issues.

However, it is also clear to us that there are a limited number of

provisions within the proposal that we can make final at this time.

Where these provisions involve trade, we believe that delaying their

implementation is unwarranted and not in the best interests of trade

relations with other countries. On June 26, 1997, we published a final

rule in the Federal Register to allow the importation of

[[Page 34386]]

fresh, chilled or frozen pork from the State of Sonora, Mexico (62 FR

(INSERT FR CITE), Docket No. 94-106-6), based on the provisions for

such importation set forth in our proposed rule. Similarly, in this

final rule, we are establishing provisions, described below, to allow

the importation, under certain conditions, of fresh, chilled or frozen

beef from Argentina. Among these provisions are those that would allow

the importation of fresh, chilled or frozen beef from Argentina under

specified conditions. Therefore, in this final rule, we are

establishing provisions to allow such importation, as described below.

Although the regulations in current 9 CFR 94.1 prohibit the importation

of fresh, chilled or frozen beef from countries affected with either

foot-and-mouth disease (FMD) or rinderpest, the rule changes described

below deal only with the status of Argentina with regard to foot-and-

mouth disease (FMD). This is because rinderpest has never been known to

exist in Argentina, and the regulations in part 94 restricting

importations from Argentina have been based on its FMD status.

As part of the proposed rule, we proposed to designate Argentina as

a region in which there has been no case of foot-and-mouth disease

(FMD) for at least 1 year, but from which certain animals and animal

products would pose some disease risk if imported into the United

States without mitigating measures. We cited the fact that vaccination

for FMD is still being conducted in Argentina as one reason for certain

animals and animal products presenting a risk if imported into the

United States without mitigating measures being applied. Vaccination of

animals for FMD makes it difficult to distinguish between responses

because of the actual disease and responses from the vaccinations.

Further, if the disease is present in a region, vaccinating an infected

animal can suppress the symptoms of the disease and thus prevent those

symptoms from manifesting themselves at a clinical level, so that it

appears as if the disease is eradicated. This is referred to as masking

the disease. Additionally, we noted that Argentina supplements its

national meat supply by importing fresh, chilled and frozen meat of

ruminants and swine from countries of greater risk for FMD.

Mitigating Measures

In our proposal, we set forth a number of mitigating measures that

we believed to be adequate to reduce to a negligible level the risk of

disease introduction from importations of fresh, chilled and frozen

meat of ruminants from Argentina. These measures included certification

of the following: (1) That the meat has not been in contact with meat

from regions of greater disease risk; (2) that the meat originated from

premises where FMD and rinderpest have not been present during the

lifetime of any ruminants or swine slaughtered for export; (3) that the

meat originated from premises on which ruminants or swine have not been

vaccinated with modified or attenuated live viruses for FMD during the

lifetime of any of the ruminants or swine slaughtered for export; (4)

that the meat is from ruminants or swine that have not been vaccinated

for other specified diseases; (5) that the meat comes from carcasses

that have been allowed to maturate at 40 to 50 deg.F (4 to 10 deg.C)

for a minimum of 36 hours after slaughter and have reached a maximum pH

of 6.0 in the loin muscle at the end of the maturation period; and (6)

that all bone, blood clots, and lymphoid tissue have been removed from

the meat.

Public Comments

Of the comments we received on our proposed rule, a small number

addressed our proposed classification of Argentina and mitigating

measures for animals and animal products from Argentina. The commenters

on these issues included members of the domestic livestock industry, a

State department of agriculture, representatives of foreign governments

and meat producers, and other members of the public. We discuss below

each of the issues raised by the commenters with regard to the

importation of beef from Argentina, since this final rule addresses

only the importation of beef from Argentina. We will discuss all other

comments on the proposed rule, as appropriate, in future rulemaking

documents.

Some commenters expressed general concern that the regulations as

proposed would increase the risk of FMD being introduced into the

United States, without providing specific information supporting those

concerns. Other commenters expressed general support for our proposed

classification of Argentina with regard to FMD. Some commenters stated

that meat may not present as much risk as live animals, because any FMD

virus in meat may be inactivated by pH change. These commenters

suggested no changes and we are making no changes based on their

comments.

One of the mitigating measures in our proposal for the importation

of fresh, chilled or frozen meat of bovines from Argentina was that the

meat must originate from premises where FMD has not been present during

the lifetime of any bovines slaughtered for export of meat. One

commenter stated the regulations should instead require that the

premises have been free of FMD during the lifetime of any ruminant or

swine currently living on the premises. We are making no changes based

on this comment. Under the scenario suggested by the commenter,

premises infected with FMD during the lifetime of any ruminants or

swine currently living on the premises could not export beef to the

United States until all animals on the premises at the time of the

infection were sold or slaughtered. We consider such a restriction

unnecessarily stringent. The proposed regulations required that meat

originate from premises where FMD and rinderpest have not been present

during the lifetime of any bovines slaughtered for export of meat.

Moreover, under the regulations we proposed, fresh, chilled or frozen

beef could not be imported from Argentina if the meat originated from

premises where ruminants or swine have been vaccinated with modified or

attenuated live viruses for FMD at any time during the lifetime of the

bovines slaughtered for export of meat. In effect, this prohibition of

vaccination makes the animals intended for export sentinel animals for

FMD. Absence of disease in these animals is an excellent indicator that

the premises is free of FMD.

A commenter addressed the criteria we used in proposing to consider

Argentina as a country of low risk for FMD. Instead of 1 year with no

reported cases of the disease, as was proposed, the commenter

recommended that the criterion be 5 years with no reported cases of the

disease. The condition we proposed of at least 1 year with no reported

cases of FMD is consistent with the standards set forth in our existing

regulations. Research and our experience enforcing the regulations has

shown that from the time of the last reported case of FMD in a country,

some period of time should pass before importation restrictions are

relieved, due to the possibility that some animals not showing clinical

evidence of the disease might be carrier animals. Internationally, a

number of countries recognize 12 months as a sufficient ``waiting

period.'' We believe that after a waiting period of 12 months, it is

safe to conclude that no carrier animals exist in that country.

The difference between Argentina and countries we have recognized

in the past as free of FMD is that Argentina continues to vaccinate for

FMD in some situations and areas where that country

[[Page 34387]]

perceives an increased risk of disease introduction. Although the

practice of vaccination does not mean that FMD exists in a country, it

does introduce risk factors such as the possibility of introducing

disease from improperly inactivated vaccine or the masking of chronic

cases of FMD. To mitigate these additional risk factors, we proposed to

require the measures described above in this SUPPLEMENTARY INFORMATION

under the heading ``Mitigating Measures,'' including the requirement

that the meat to be exported originated from premises on which

ruminants or swine have not been vaccinated with modified or attenuated

live viruses for FMD during the lifetime of any of the bovines

slaughtered for export. We believe from our experience that the

mitigation measures we proposed will reduce any disease risk to a

negligible level.

Some commenters objected to the proposed classification of

Argentina. Of those commenters expressing concern, some cited the

reliance in Argentina on vaccination for FMD. As discussed above, we

agree that the practice of vaccination can reduce the certainty that a

country or other region is free of a specific disease, and so we are

imposing restrictions, also described above, on the importation of beef

from Argentina to mitigate to a negligible level any risk that might

exist. Moreover, due to the continued practice of vaccination in

Argentina, we have determined that an additional mitigating measure

should be required to ensure that animals slaughtered for beef for

importation do not come into contact with animals that might not meet

the other required mitigating measures. Therefore, we are requiring in

Sec. 94.21, as set forth in this rule, the requirement that fresh,

chilled or frozen beef to be imported from Argentina come from bovines

that were moved directly from the premises of origin to the

slaughterhouse without any contact with other animals.

One commenter stated that under the recommendations of a 1994

assessment for disease risk for Argentina, that country should be

considered a country in which FMD exists, or, at the minimum, as a

country with an unknown status. The commenter expressed concern that

cases of FMD were reported in Argentina until 1994. The commenter also

pointed out that Argentina has 380 km of unprotected border with

Bolivia and 500 km of unprotected border with Chile. We are making no

changes based on this comment. Although the report recognized the

existence of FMD in Argentina until 1994, there have been no reported

cases of the disease in Argentina since that year. With regard to

borders, Chile is listed in the regulations (9 CFR 94.1) as a country

free of FMD and rinderpest. The border area with Bolivia referenced by

the commenter is in a desert area, with little vegetation and very few,

if any, cattle. Consequently, there is very little risk of any animal

crossings of concern from that area. Additionally, the national police

in Argentina have authority to enforce sanitary regulations along the

border and elsewhere in the country, and are active in carrying out

such enforcement.

Some commenters stated that the proposed classification of

Argentina contained no quantitative risk assessment for that

classification. One commenter recommended that Argentina be considered

to have an unknown risk status for FMD until a quantitative risk

assessment has been done to determine the final risk and the

appropriate biosecurity measures for that country and the public has

had an opportunity to comment on it. The commenter stated that a

careful review of the situation in Argentina might lead to a decision

to divide that country, for risk classification purposes, into regions

separated by the Parana River and the Barrancas-Colorado Rivers. We are

making no changes based on this comment. We conducted an extensive

review of the data made available to us by Argentina, developed a

quantitative risk assessment following a site visit to that country,

and did not find any disease risk basis to differentiate between

various regions in Argentina. The factors used in developing the risk

assessment are discussed below.

Some commenters stated that the proposed rule contained no

discussion of how the proposed disease classification of Argentina was

arrived at, and no final risk analysis calculation. Some commenters

requested that the risk assessment results and methods be publicized.

In our proposed rule, we included a discussion of the basis for the

proposed disease classification of Argentina. This discussion was set

forth on page 16988 of the proposed rule and included the following

points. The last outbreak of FMD in Argentina occurred in 1994.

Vaccinations for FMD in Argentina continue, and Argentina supplements

its national meat supply by importing fresh, chilled and frozen meat of

ruminants and swine from countries in which FMD is known to exist.

Additionally, APHIS reviewed information submitted by the government of

Argentina, and sent a team of APHIS officials to Argentina in 1994 to

conduct an on-site evaluation of that country's animal health program.

In assessing the risk of the introduction of FMD virus into the

United States through the importation of up to 20,000 metric tons of

fresh, chilled or frozen beef from Argentina, we created a scenario

tree for the risk assessment. As part of the scenario tree, we

identified factors and potential situations that could contribute to an

increased risk of the introduction of FMD. We then estimated, based on

the information available to us and on our 1994 site visit to

Argentina, the likelihood of each of the factors or situations

occurring.

The factors or situations we identified included the following: (1)

The prevalence of residual infection in Argentina; (2) the risk of

disease re-introduction from neighboring areas; (3) the likelihood of

not detecting disease outbreaks; (4) the likelihood of infected animals

not being detected before leaving the farm; (5) the likelihood of

infected animals not being detected in transit; (6) the likelihood of

FMD not being detected at antemortem inspection; (7) the likelihood of

FMD not being detected at postmortem inspection; (8) the likelihood of

FMD-infected material not being removed during slaughter; (9) the

likelihood of the FMD virus surviving the process of meat maturation;

(10) the likelihood of FMD virus not being eliminated during deboning

of meat; and (11) the likelihood of the virus not being eliminated

through pH meter checks.

After estimating the likelihood of each of the above situations

occurring, we concluded in our risk assessment that if 20,000 metric

tons of beef were exported indefinitely at the level of risk calculated

in 1994, this would result in the movement of FMD-infected meat to the

receiving country once every 444,537 years. We stated that these values

were time-sensitive, and that the longer Argentina went without

additional cases of FMD, the less the risk of exporting FMD would

become. From the time the risk assessment was developed until the

present, no cases of FMD have been found to exist in Argentina. Based

on the information available to us, and on the risk assessment we used,

we consider the FMD risk from the importation of fresh, chilled or

frozen beef from Argentina to be low. Details concerning the on-site

evaluation, including the APHIS 1994 risk assessment for Argentina and

an updated risk assessment recently prepared by APHIS, are available by

contacting the person listed under FOR FURTHER INFORMATION CONTACT.

One commenter stated that, although vaccination has historically

been viewed as an indicator of a disease

[[Page 34388]]

presence, and it is true that many vaccines can hide the incidence of a

disease or produce false positives, the assessment of vaccination use

should be reconsidered. The commenter stated that vaccination should be

an acceptable risk reduction or ``biosecurity'' measure in some

instances, without resulting in an automatic classification to a higher

risk status. The commenter inquired whether the role of vaccination has

been fully evaluated, or whether such an evaluation will take place on

a case-by-case basis. We are making no changes based on this comment.

We agree that vaccination is a useful tool in areas that present a

higher risk because of factors such as proximity to areas where FMD

exists, or past disease experience. We also agree that vaccine use is

not necessarily an indicator of the existence of a disease agent.

However, we do not believe it can be definitely assumed that vaccine

use is not masking a disease agent at a low level. We intend to

continue to evaluate the issue of vaccine use and the risk it presents

with various diseases and vaccines. We will, if appropriate, propose

changes in the future with regard to the regulatory assessment of the

use of vaccination, when we believe we can be sure of a region's

disease status, notwithstanding the use of vaccination within that

region.

Some commenters stated that, in general, a country or region should

not be designated as an area of low risk if that country or region

imports products from a country or region of a higher risk, or if it

borders a country or region of higher risk. In particular, the

commenters cited the fact that Argentina imports fresh, chilled and

frozen meat of ruminants and swine from countries where FMD is known to

exist, and shares land borders with countries of an unknown risk. The

commenters stated that Argentina should be considered to present the

same level of risk as the highest risk country or region from which it

imports. We are making no changes based on these comments. In

determining the risk of importations from Argentina, we considered the

factors cited by the commenters. Although Argentina does share borders

with countries of higher risk, access across those borders is

restricted through either natural barriers or border patrols.

Additionally, among the restrictions we proposed to impose on the

importation of fresh, chilled or frozen meat from Argentina are the

requirements that the meat has not been in contact with meat from

regions of greater disease risk, and that the meat comes from deboned

carcasses that have been allowed to maturate to a pH level sufficient

to inactivate the FMD virus.

Some commenters requested we eliminate the proposed requirement for

deboning fresh meat before importation from Argentina, and also for

other countries that may be similarly classified for FMD. We are making

no changes based on these comments. We consider deboning, and the other

measures described in the following paragraph, necessary to minimize

the disease risk from such importations. Furthermore, much of the meat

shipped internationally is already deboned and cryogenically packed. We

do not believe, therefore, that requiring meat to be deboned before

shipment to the United States from such regions will present a

significant hardship.

In Sec. 94.1 of our proposal, we proposed that fresh, chilled or

frozen meat from ruminants or swine raised and slaughtered in regions

classified as proposed for Argentina for FMD could not be imported into

the United States if the meat has not reached a maximum of 6.0 pH in

the loin muscle. Additionally, all bone, blood clots, and lymphoid

tissue would need to have been removed from the meat. Several

commenters stated that these requirements should not apply to regions

classified as proposed for Argentina, because such regions would

already need to be free of the disease agent for at least 1 year. We

are making no changes based on these comments. Argentina is a country

where vaccination for FMD is still carried out. This may mask low-level

infections in the animals. The mitigation measures proposed will

significantly reduce any potential FMD risk from the importation of

beef from Argentina.

In the Supplementary Information section of our proposed rule, we

stated that acidic or alkaline conditions readily kill the FMD virus.

One commenter took issue with this statement, stating that research has

shown that although a pH below 6.0 or above 11.5 will inactivate the

FMD virus, the virus resident in the micro-environment of animal

tissue--such as lymphatic tissue, bone marrow, or coagulated blood--is

resistant to inactivation over a practical pH range. Although we agree

with the commenter, the regulations as proposed already address the

concerns raised. We assume that by ``micro-environment,'' the commenter

is referring to those areas of meat in the carcass that are in the

immediate area of the bones, lymphatic tissue, or coagulated blood. In

the proposed regulations, one of the conditions for importing fresh,

chilled or frozen meat from Argentina was that all bone, blood clots,

and lymphoid tissue be removed from the meat.

We are, however, making a change to one of the proposed provisions

discussed by the commenter--the pH level considered necessary to

inactivate the FMD virus. We proposed to require that fresh, chilled or

frozen meat to be imported from Argentina ``have reached a maximum pH

of 6.0.'' Upon review of the comment we received and of generally

accepted literature on the subject, we agree with the commenter that

the pH level reached should be less than 6.0. The literature showed

that, while a pH level of 6.0 was sufficient to inactivate the bulk of

an FMD virus population, small fractions of that population were able

to withstand the 6.0 level (Cottral, et al.). A majority of available

literature on this topic indicates that a pH level of 5.8 or less will

relieve this concern. Therefore, we are making this change in

Sec. 94.21 as set forth in this rule.

Equivalency of Mitigation Measures

One commenter stated the proposed requirements for the importation

of animal products under part 94 do not allow for the exporting

countries to apply different, but equivalent, risk mitigation measures.

The commenter stated such an omission is contrary to the equivalence

principle under WTO-SPS. We are making no changes based on this comment

at this time. In our proposal, we proposed quantitative risk assessment

options that would allow different risk mitigation measures. We are

currently reviewing the comments we received on these options and will

address them in future rulemaking. Additionally, should alternative

risk mitigation measures be submitted to APHIS, we will review and

consider them carefully and, when appropriate, we will incorporate them

into our regulatory system.

Comments on Initial Regulatory Flexibility Analysis

Several commenters addressed the Initial Regulatory Flexibility

Analysis we published in our proposed rule. The commenters objected to

the statement in our analysis that selected cuts of meat from grass-fed

cattle from Argentina could possibly be classified as grain-fed beef.

The commenters stated that, under standard industry practice, such a

classification would not be made by the exporting country. We agree

that our statement as written could be misleading. Our intent in the

proposal was not to imply that grass-fed beef could potentially be

identified as grain-fed beef by the exporting country. Rather, we were

referring to the system

[[Page 34389]]

of quality grading carried out by the Department's Agricultural

Marketing Service. At the retail level, the USDA grades most familiar

to the consumer are ``prime,'' ``choice,'' and ``select.'' These grades

are followed in descending order by a number of other grades. Beef from

grass-fed cattle is much less likely to achieve the higher grade

classifications familiar to consumers than is beef from grain-fed

cattle, because beef from grass-fed cattle does not generally have the

characteristic marbling of grain-fed beef required for the higher

quality grades. However, in theory, certain cuts of meat from certain

grass-fed cattle might qualify for some of the higher grades. In order

to clarify our meaning, we have worded our Final Regulatory Flexibility

Analysis in this document to read that ``selected cuts from grass-fed

cattle could possibly be graded as the same quality as grain-fed beef

available to consumers at the retail level.''

Executive Order 12866 and Regulatory Flexibility Act

This rule has been reviewed under Executive Order 12866. The rule

has been determined to be economically significant for purposes of

Executive Order 12866 and, therefore, has been reviewed by the Office

of Management and Budget.

Under the ``Regulatory Flexibility Act'' (5 U.S.C. Sec. 603), we

are required to include in this Final Regulatory Flexibility Analysis a

description of significant alternatives to this rule. In developing

this final rule, APHIS considered either (1) taking no action on the

proposed requirements for the importation of fresh, chilled or frozen

beef from Argentina, (2) allowing the importation of fresh, chilled or

frozen beef from Argentina under conditions that are either more or

less stringent than those adopted in this rule, or (3) adopting the

proposed conditions which reduce the risk of introduction of FMD into

the United States to a neglible level.

We rejected the first alternative, which essentially would have

been to retain the restrictions on the importation of fresh, chilled

and frozen beef from Argentina that are set forth in the existing

regulations. Because fresh, chilled, or frozen beef can be imported

under certain conditions from Argentina with negligible FMD risk,

taking no action would not be scientifically defensible and would be

contrary to trade agreements entered into by the United States. We also

rejected the second alternative, which would allow the importation of

fresh, chilled or frozen beef from Argentina under conditions other

than those proposed. In developing the proposed criteria for the

importation of such beef, we determined that criteria and mitigating

measures less stringent than those proposed would increase the risk of

the introduction of FMD into the United States to more than a

negligible level, and that more stringent conditions would be

unnecessarily restrictive. We consider the proposed conditions to be

both effective and necessary in reducing to a negligible level the risk

of the introduction of FMD because of beef imports from Argentina.

Under 5 U.S.C. 603, we are also required to include in this

analysis an assessment of comments received on our Initial Regulatory

Flexibility Analysis. When we proposed the conditions for the

importation of meat from Argentina, we did so based on the information

available to us from Argentina, USDA sources, an APHIS site visit to

that country, and scientific literature. We requested comments on the

proposed conditions for such importation of meat, along with the rest

of the proposed rule. We received and considered comments on the

proposed conditions, and our responses are discussed in the

SUPPLEMENTARY INFORMATION section, above. After reviewing the comments

received and preparing a risk assessment which is available upon

request, we continue to consider the proposed conditions for the

importation of beef from Argentina to be effective in reducing the risk

of the introduction of FMD to a negligible level, and have determined

that it is neither warranted nor necessary to revise those conditions

in this final rule. As discussed above, we are making a wording change

in this Final Regulatory Flexibility Analysis to clarify our

description of certain cuts of beef from grain-fed cattle.

Over 95 percent of the beef and dairy industries are composed of

producers and firms that can be categorized as small according to the

Small Business Administration's (SBA) size classification. Economic

impacts resulting from this rule would therefore largely affect small

entities. The analysis of economic impacts discussed below would thus

fulfill the requirement of a cost-benefit analysis under E.O. 12866, as

well as the analysis of impacts of small entities as required by the

Regulatory Flexibility Act. A discussion of the size distribution of

these industries is also provided to support the above rationale to

merge these required analyses based on their size classification.

Analysis of Anticipated Economic Impacts

Under this rule, fresh, chilled and frozen beef may be imported

from Argentina. Currently, meat processed by curing, cooking, and

canning is allowed to be imported from Argentina. Practically speaking,

fresh beef cannot be transported from Argentina to the United States

without being chilled or frozen. This rule change is expected to

increase the amount of beef imports from Argentina, because the United

States has prohibited the importation of fresh beef from Argentina

since enactment of the 1930 Tariff Act.

Background of the Argentine Beef Industry

Argentine cattle inventories (about 54.7 million head at the end of

1994) are about 50 percent of U.S. cattle inventories (estimated at

103.3 million head on January 1, 1995). Argentina was the world's

leading beef exporter for many years, up until the early 1970's.

Argentina's decline has been attributed to national policies that

discouraged production and trade and also to unfavorable

weather.1 Nevertheless, historical data indicate that the

costs of producing Argentine beef is one of the lowest in the world. In

many years, Argentine beef cow and steer prices are less than one half

U.S. cow prices.2 Both the history and cost structure

suggest that Argentina has the natural resources to increase beef

production and trade. Long-standing working commercial arrangements

exist between Argentine and U.S. firms. Although trade has been

restricted to cooked product, the U.S. ranks as the second most

important beef market for Argentina. In 1992 and 1993, Argentine beef

export markets totaled 297 KT (thousand metric ton) and 279 KT.

Destinations for this product (and their volumes for 1992 and 1993, in

parentheses) were: the European Economic Community (137 KT and 125 KT);

the U.S. (101 KT and 86 KT); Chile (16 KT and 22 KT); and all others

(0.038 KT and 0.037 KT).

---------------------------------------------------------------------------

\1\ Source: McCoy et al., Livestock and Meat Marketing, 3rd

Edition, Van Nostrand Reinhold, 1988, pg. 546.

\2\ Source: USDA, Ag. Statistics 1972, Table 455 and USDA, ERS,

The World Beef Market-Government Intervention and Multilateral

Policy Reform, pg. 37.

---------------------------------------------------------------------------

Although the Argentine cattle inventory is about 53 percent of the

U.S. cattle inventory, its beef production is roughly 25 percent of

U.S. production due to differences between the Argentine and U.S. beef

production systems. U.S. beef cattle is fed predominately grain-based

rations, while Argentine cattle is fed largely on

[[Page 34390]]

grass. The U.S. system results in cattle reaching slaughter weights

more quickly and heavier at slaughter than cattle fed on grass.

Cattle fed grain produces beef that is often times referred to as

``fed beef''. Argentine beef produced from cattle raised on grass and

U.S. beef produced from culled, older animals produce beef commonly

referred to as ``nonfed beef''. Both the Argentine and domestically

produced nonfed beef are suitable for lower quality uses in the U.S.

beef market. Such uses include hamburger meat patties, sausages, and

other prepared meals and foods. Selected cuts of Argentine beef could

possibly meet the quality requirements comparable to U.S. grain-fed

beef products.

Assumptions of Analysis

This analysis assumes that Argentine uncooked beef exports to the

U.S. do not exceed their 20 KT tariff-free quota limit. These

assumptions are based on the difficulties that will likely be

encountered by Argentine beef producers and processors in increasing

production and aligning production with consumer demands in export

markets. The economic impact on U.S. beef producers will depend on

demand-side factors, such as consumer acceptance of Argentine product,

but probably most heavily on two supply-side factors: Whether the

uncooked beef imports consist mainly of beef that can be substituted

for U.S. nonfed beef and the total quantity of uncooked beef shipments

to the U.S. The higher returns from uncooked product (as compared with

current shipments of cooked product) will likely cause an immediate

shift to chilled or frozen uncooked beef product shipments. However,

current production and export commitments are expected to constrain

increases in beef exports for some time. Given adequate adjustment time

to increase production and shift markets, it is possible that Argentina

could increase its beef exports and its potential to produce a beef

product that could grade up to the quality requirements comparable with

US fed beef. However, at this time, USDA and many trade analysts

conclude that Argentina exports to the U.S. will most likely consist of

nonfed beef within tariff-free specified levels.

Method of Analysis

This analysis is based on results generated by the USDA's Economic

Research Service's United States Mathematical Programming (USMP) model.

USMP is a static, programming model of U.S. agriculture with

considerable regional and cross-commodity detail. U.S. beef production,

use and trade are broken into two main classes: grain fed beef and

nonfed beef. For this analysis, USMP was used specifically to determine

the effect of an additional 20 KT carcass weight equivalent (CWE) of

nonfed beef. All estimates reflect a 3-to 5-year adjustment period.

These results represent historical relationships in production,

consumption, and trade, and are based on existing industry structure

and pricing arrangements in agricultural markets, and 1995 base-year

prices and quantities.

The increase in imports represents less than one-fifth of one-

percent of total U.S. beef availability (11,573 KT CWE) in 1995, and

less than a 2-percent increase in imported beef. This beef availability

came from domestic production (10,390 KT); beginning stocks at 172 KT;

and imports of 1,011 KT. Utilization of these supplies in 1995 were

distributed as follows: 10,776 KT in domestic food uses; 625 KT

exported; and, 172 KT in ending stocks. The market clearing price was

$4,402.17 per MT CWE at wholesale level. The implied price elasticity

of demand for nonfed beef in the USMP model is almost negative one;

that is, given a 3-to 5-year adjustment period, a one percent decline

in price elicits about an equal percentage increase in quantities

demanded. The lack of supply response registered in the model implies

that the supply of U.S. nonfed beef is perfectly price inelastic. This

outcome is consistent with the observed behavior of U.S. dairy and beef

cow-calf operations. The decision to market these animals is largely

determined by factors other than the price of nonfed beef.

Impact on U.S. Consumers

An increase of 20 KT of Argentine nonfed beef product in U.S.

uncooked beef market is estimated to increase consumer welfare gains by

$89.15 million annually. This increase in welfare results from beef

supplies that would be added to other nonfed beef supplies used mainly

in ``non table cut'' beef applications, such as in hamburger meat

patties, sausages, and other prepared meals and foods. Increased market

quantities reduced average wholesale U.S. beef prices by $8.27 per MT

CWE (from $4,402.17 to $4,393.9 per MT CWE), less than a fifth of one

percent drop in price.

Although most of the welfare gains are expected to accrue directly

to consumers, some of the consumer welfare gains from increased beef

imports may be initially retained by beef importers. Given time,

competition among importers in sales to the domestic market will force

prices lower and thus transfer welfare gains to consumers.

Impact on U.S. Livestock Sector

Primary producers of livestock and beef products are negatively

affected by beef imports increases solely through lower prices. The

price effect generated in the model is not sufficient to force

producers to lower their production. In the aggregate, producer welfare

losses of $40.15 million were estimated to result from the additional

nonfed beef supplies on the U.S. beef market (Table 1). These losses

result from a drop of around $3.85 per MT CWE across total U.S. beef

production. For purposes of this analysis, these losses were

distributed across firms in the following three sub-sectors: beef cow-

calf operators and milk producers; feedlot operators; and, cattle

slaughterers and processors.

Beef Cow-Calf Operators and Milk Producers

Increased imports of nonfed beef would compete with U.S. domestic

sources of this type of beef such as cull beef and dairy cow slaughter.

Thus, the resulting impact of increased nonfed beef imports is lower

prices for both cull beef and dairy cows. Because the sale of cull cows

is a by-product of these farming operations, production does not

decrease.3 Thus, even though increased beef imports lower

cull dairy prices by almost 0.3 percent (from $541.71 per head to

$540.17, or $1.54 per head), lower prices do not cause producers to

cutback production. The lower returns reduce producer welfare of milk

producers by about $18.65 million. Similarly, the lower returns on cull

beef cows reduce producer welfare of beef cow-calf operators by $12.7

million. In total, these cow-calf beef operators and dairy farmers

experience producer welfare declines of $31.35 million.

---------------------------------------------------------------------------

\3\ The majority of producers receipts of these two commodities

are realized through the sale of primary outputs (feeder calves in

the case of beef cow-calf operators and milk in the case of dairy

producers). The minor role of cull cow sales to total income is

particularly evident on dairy operations which typically generate up

to 90 percent of their returns from milk sales.

---------------------------------------------------------------------------

Feedlot Operators

It is shown above that increased imports of nonfed beef displaces

low-quality beef, mainly affecting dairy and beef cow-calf operations.

The beef sector is further affected due to fewer feeder calves received

at feedlots as a result of increased culling of beef cows. A reduction

in supply of feeder calves caused prices for both yearling beef

[[Page 34391]]

calves and fed cattle to rise. The feedlot gains from output price

increases on fed cattle at slaughter nearly offset the increased costs

to purchase yearling beef calves. The net losses in feedlots of $0.24

per head multiplied over the estimated number of cattle fed (22,500,000

head) produced an aggregate feedlot operators' producer welfare loss of

$5.4 million.4

---------------------------------------------------------------------------

\4\ Yearling beef calf prices go up more per head ($0.64 per

head) than for fed cattle ($0.40 per head). These changes are based

on: a $76.34 per cwt live weight beef yearling calf price and animal

weights of 600 pounds and a $71.99 per cwt live weight fed slaughter

cattle price and animal weights of 1200 pounds.

---------------------------------------------------------------------------

Cattle Slaughterers/Primary Processors

Slaughterhouses received the same number of marketings as under the

baseline, but received cull beef and dairy cows at lower prices. These

benefits were off-set slightly by price increases on purchases of fed

cattle to be slaughtered. In addition, slaughterers faced lower

wholesale prices on their nonfed beef output. Combining these three

effects--the benefit of lower cull beef and dairy cow prices, offset by

slightly higher fed cattle prices and lower wholesale nonfed beef

prices--resulted in an average net loss to cattle slaughters and

primary beef processors of $3.7 million. The slaughterers principally

affected by this rule would be those that handle cull beef and dairy

cows and supply manufacturing beef.

Table 1.--Producer Welfare Losses

[In millions of dollars]

------------------------------------------------------------------------

Welfare

Item losses

------------------------------------------------------------------------

Subtotal--Dairy Sector....................................... 18.65

Subtotal--Beef Sector........................................ 21.8

==========

--Beef Cow-Calf Operators.................................. 12.7

--Beef Feedlot Operators................................... 5.4

--Beef Slaughterers........................................ 3.7

==========

Total beef and dairy sectors............................. 40.45

------------------------------------------------------------------------

Producer losses, on a per farm or firm basis, are relatively small.

It is shown in Table 2 that the losses incurred per farm range from $16

for cow-calf producers to roughly $2,700 for slaughters. These losses

are small compared with total gross sales from livestock sales for

either beef or dairy operations, representing on average less than 0.1

percent of the value of sales.

Table 2.--Distribution of Economic Impacts on U.S. Agricultural Sector of Beef Imports

--------------------------------------------------------------------------------------------------------------------------------------------------------

Numbers in Market share Economic loss

size ------------------------------------------------------

Sub-sector Size category category Total Per entity % of sales

------------- (Percent) ----------------------------------------

(Numbers) (million) (loss/firm) (Percent)

--------------------------------------------------------------------------------------------------------------------------------------------------------

Beef Cow-Calf.................................. Small.............................. 801,940 99.8 $11.82 $14.74 0.07

All................................ 803,240 100 12.70 15.84 0.07

Dairy Farms.................................... Small.............................. 152,500 68.5 12.72 83.41 0.09

All................................ 159,500 100 18.65 116.93 0.09

Feed Lots...................................... Small.............................. 57,141 30 1.65 28.80 0.03

All................................ 57,541 100 5.3 93.43 0.03

Slaughterers................................... Small.............................. 1,330 81 2.98 2,253 0.01

All................................ 1,385 100 3.68 2,657 0.01

--------------------------------------------------------------------------------------------------------------------------------------------------------

Impact on Small Entities

Beef Cow-Calf Operators and Milk Producers

Beef and dairy farms with annual sales of less than $0.5 million

are considered small according to Small Business Administration (SBA)

size criteria. Recent Census data show that about 99.8 percent of

operations with beef cows have fewer than 1,000 head-herd

size.5 On average, these 801,940 operations had sales of

under $0.5 million while maintaining 92.9 of beef cow inventories.

Farms with less than $0.5 million of cattle and calves sales averaged

sales of $20,976 in 1992, as opposed to average sales of $1.3 million

on larger farms. Similarly for dairy operations, most producers fell in

the ``small'' business category. Recent USDA data show that 95.6

percent of operations with milk cows have fewer than 200 head in their

herds. Census data is available on farms with dairy product sales, but

not by herd size. These data show that 95.2 percent of these farms have

sales less than $0.5 million. Assuming that both USDA and Census data

were tracking roughly the same dairy operations, it is estimated that

68.2 percent of milk cow inventories are on the 152,500 operations with

sales less than $0.5 million with average dairy product sales of

$93,800 per farm in 1992. Besides the sale of dairy products, the sale

of cull dairy cattle and young stock (not selected to be retained for

milking or breeding purposes) contribute to farm income. USDA budget

data for 1992 indicated that, on an average U.S. dairy operation, the

sale of culled cattle contributed $1.27 (around 8 percent) for every

$15.85 of receipts.6 Census data indicate that cattle sales

contributes about $8,000 toward gross farm sales on a small dairy farm

(making total sales average about $102,000): also, about 8 percent of

total gross farm income. Net farm income drops of about $15 on

``small'' beef farms and $83 on ``small'' dairy farms were estimated by

dividing the adjusted aggregate economic impact estimated by the model,

by the number of small U.S. beef and dairy operations.7

---------------------------------------------------------------------------

\5\ Source: 1992 U.S. Census, Beef Cow Herd Size by Inventory

and Sales: 1992, Table 28, pg. 30.

\6\ USDA, Ken Mattrews, USDA, ERS, ``Economic Indicators of the

Farm Sector: Costs of Production, 1992--Major Field Crops and

Livestock and Dairy''.

\7\ This adjustment was obtained by multiplying the total

aggregate economic impact by the percentage of cattle inventories

held on small dairy and beef farms.

---------------------------------------------------------------------------

Feedlot Operators

The number of ``small'' entities in the feedlot industry was

estimated using data and information from various sources. U.S. Census

of Agriculture data show that there were 57,541 beef feedlot operations

(SIC 0211) with total agricultural sales of over $20.7 billion ($0.8

million in crop sales and $19.9 billion in livestock

sales).8 No distributional data on sales are

[[Page 34392]]

available, but using the aggregate totals gives average annual sales

per feedlot at $345,840. (SBA classification of feedlots put small

operations as those establishments with sales at $1.5 million or less.)

Although casual observation would suggest that most cattle placed on

feed occurs on highly concentrated (both geographically and size-wise)

feedlots, without any additional information or data, all feedlots in

the U.S. would fall into SBA's small entity category. However, other

data sources indicate that the cattle feeding business is dominated by

a few feedlots with high sales. Crom notes that large feedlots (with

8,000 head capacity) marketed 63 percent of the fed cattle in 1984 and

numbered only 379.9 Sales on such operations would average

over 35,000 head per year and take them out of SBA's ``small entity''

category. Updating Crom's estimated by a 1993 CF Resources, Cattle

Industry Reference Guide (CIRG) which reported a total number of 46,141

feedlot operations with over 22.388 million fed cattle marketings in

1992 with the feedlot numbers from Census, and assuming that large

feedlot marketings' percentage grew to 70 percent and numbers increased

to 400 by 1990, would imply that less than 7 million head of fed cattle

are distributed across the 57,141 ``small'' feedlots. Given this recent

production and marketing data, these ``small'' feedlots appear to

average sales of about 120 fed cattle per year valued at about

$103,666. These size and small feedlot extrapolations do not seem to

violate Crom's earlier findings that ``farm feedlots made up 97 percent

of all lots but fed only 19 percent of the cattle in 1984''. Almost all

of the cattle fed by large and small lots alike purchased a high

percentage of the cattle fed out (on average 60 percent in 1984). Thus,

most feedlots are large operations (making up roughly 70 percent of all

operations) and market a high percentage of national total fed cattle

marketings. Using the above data on feedlot size, the impact on

``small'' feedlot operators from increased imports of nonfed beef

translated into less than a $30 per year drop in gross sales on an

average ``small'' feedlot (about a 0.03 percent drop).

---------------------------------------------------------------------------

\8\ Source: U.S. Census, Selected Characteristics of Farms by

Standard Industrial Classification: 1992, Table 18, pg. 25.

\9\ Source: USDA, ERS, Agricultural Information Bulletin Number

545, Economics of the U.S. Meat Industry, Richard J. Crom, November

1988, pg. 57.

---------------------------------------------------------------------------

Cattle Slaughterers/Primary Processors

The size distribution of firms in this sub-sector made it difficult

to allocate the small losses estimated above across large and small

firms. In the past, the desire to cut transportation costs of cattle

and product, to gain economics of scale in plant operations, and to

shift to newer plants (without existing labor contracts) has lead to

increased industry concentration in this U.S. sub-sector. The exit of

many older, smaller plants and companies have also contributed to

increased market concentration. Most firms have multi-million dollar

operations made up of new, large, state-of-the-art slaughter and

packing plants located close to areas of high concentration of fed

cattle (Kansas, Nebraska, Texas, Colorado, and Iowa). Still, there are

substantial numbers of packers that ``can be characterized as having

small slaughter capacities and often only one or two slaughter plants.

They typically possess only about one percent of the industry slaughter

and often slaughter cows as well as fed cattle.'' 10 The

main output of packers is boxed beef which make up the bulk of beef

shipments (up from 43 percent of beef shipments in 1979 and over 80

percent in 1988.11 12 In 1992, there were 1,385

meat packing establishments in the U.S. down from 1,434 such

establishments in 1987.13 The 1987 data indicate that 214

establishments exclusively processed beef, however no such data is

available for 1992 at this time. Also, the 1987 data indicated that

most plants fell in the SBA classifications of ``small'' with 96

percent of the establishments employing less than 500 employees,

shipping almost 81 percent of total product.14 15

At the present time, the 1992 firm distribution data is not available.

Thus, this analysis assumes that 81 percent of the volume is handled by

the 1330 ``small'' firms (96 percent times 1,385 firms). This is

despite the fact that concentration studies have found that slaughter

activities are highly concentrated among the top 3-4 companies, but

that substantial competition exists for cattle on the local level due

to local inter-firm bidding for slaughter animals.16 Four-

firm concentration ratios rose steadily throughout the 1980s and

reached levels of 70.3 for steers and heifers and 55.8 for all cattle

in 1990.17 Using the aggregate slaughterers/processor

producer welfare losses calculated above (and adjusted to reflect the

volume handled by ``small'' entities), producer welfare losses incurred

by ``small'' beef slaughterers/processors was estimated at $2,253 per

year when increased imports consisted of nonfed beef. These losses

compare with average ``small'' firm value of shipments of over $30

million in 1992.

---------------------------------------------------------------------------

\10\ Source: Marion, Bruce W., The Organization and Performance

of the U.S. Food System, NC 117 Committee, Lexington Books, 1985,

pg. 128.

\11\ Agricultural Input and Processing Industries, Iowa State

University, pg. 6.

\12\ These boxed beef products are fairly substitutable and

provide processors with meat cut into primal or subprimal cuts

sealed in vacuum-pack bags, shipped in 60-pound cardboard boxes.

Boxed beef has cut transportation costs and labor costs of

retailers, increased product quality and shelf life and made for

more product standardization.

\13\ Source: 1992 Census of Manufacturers, MC92-SUM-1(P),

Preliminary Report, Summary Series, pg. 9.

\14\ SBA classification of meat packing plants put small

operations as those establishments with less than 500 employees.

\15\ Census of Manufacturing, Industry Series--Meat Products,

SIC 2011,2013,2015. 1987.

\16\ (Iowa, pg. 7; Crom, pg. )

\17\ (Iowa, pg. 5)

Table 3.--Average ``Small'' Entity Welfare Losses in Dollars Per Farm or

Firm Per Year.

------------------------------------------------------------------------

Loss per

Farm type affected entity per

year

------------------------------------------------------------------------

Beef Cow-Calf Operators................................... ( 14.72)

Dairy Producers........................................... ( 83.41)

Feedlot Operators......................................... ( 30.00)

Slaughterers/Primary Processors........................... ( 2,253.00)

------------------------------------------------------------------------

Summary

This rule would allow the importation of fresh, chilled or frozen

beef from Argentina. If Argentina were able to fill its 20 KT quota to

the U.S.'s uncooked beef market with nonfed beef product, consumer

welfare gains of around $90 million annually are possible. These

consumer gains, as well as the likely producer welfare losses, would

depend on the type of beef and total quantities received in the U.S.

from Argentina. The 20 KT of imports will likely consist mainly of

nonfed beef. Consumers would enjoy both lower prices and greater

supplies, while producers realize lower returns from lower prices, but

not lower quantities produced. These gains, even after taking into

account the likely producer losses discussed below, produce a net

social welfare gain to the United States of $48.7 million (Table 4).

Primary producers of livestock and beef products are negatively

affected by beef import increases solely through lower prices. The

price effect generated is not sufficient to discourage producers from

continuing traditional levels of production. In the aggregate, producer

welfare losses of $40.45 million are distributed between the dairy and

beef sectors, the latter sector being composed of cow-calf, feedlot and

slaughter operations.

[[Page 34393]]

Nonfed beef imports are expected to add to sales of low-quality

beef made from both beef and dairy cows at lower prices. With nonfed

beef, the prices for cull beef and dairy cattle are lowered, reducing

milk producers' welfare by almost $19 million and beef producers'

welfare by almost $13 million. On a small farm basis, these losses

translate into reduced net farm incomes of just over $15 on beef farms

and $83 on dairy farms. These drops are small compared with total gross

sales from livestock sales for either beef or dairy operations.

Feedlot operations are expected to be negatively affected, albeit

marginally, by increased beef imports. The impact on feedlots is low in

the case of nonfed beef due to the fact that milk producers share part

of the negative effect on cull cows while no quantity effect in numbers

marketed occurs. In the aggregate, feedlot net incomes are expected to

be reduced by $5.4 million.

Cattle slaughterers and primary meat processors will be faced with

the same amount of livestock at lower prices--both concerning what

processors purchase from producers and what they sell. The net effect

of these price changes are lower net returns to slaughterers of $3.7

million.

Over 95 percent of the beef and dairy industries are composed of

producers and firms that can be categorized as small according to the

SBA's size classification. This rule would therefore largely affect

small entities, and the economic impacts analyzed would be directly

applicable to these entities.

Table 4.--Aggregate Consumer and Producer Welfare Changes

[In millions of dollars]

------------------------------------------------------------------------

Welfare

Item change

------------------------------------------------------------------------

Total Consumer Welfare Gain (Loss)........................ 89.15

Total Producer Welfare Gain (Loss)........................ (40.45)

Net Social Welfare Gain (Loss)............................ 48.7

------------------------------------------------------------------------

Small Business Regulatory Enforcement Fairness Act of 1996.

This rule has been designated by the Administrator, Office of

Information and Regulatory Affairs, Office of Management and Budget, as

a major rule under the Small Business Regulatory Enforcement Fairness

Act of 1996 (SBREFA) (Pub. L. 104-121, 5 U.S.C. 801-808). Therefore, it

has been submitted for a 60-day Congressional review in accordance with

that Act, and will not become effective until that review period ends.

Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil

Justice Reform. This rule: (1) Preempts all State and local laws that

are inconsistent with this rule; (2) has no retroactive effect; and (3)

does not require administrative proceedings before parties may file

suit in court challenging this rule.

National Environmental Policy Act

An environmental assessment and finding of no significant impact

have been prepared for this rule. The assessment provides a basis for

the conclusion that the actions required or authorized by this rule

will not present a significant risk of introducing or disseminating FMD

and will not have a significant impact on the quality of the human

environment. Based on the finding of no significant impact, the

Administrator of the Animal and Plant Health Inspection Service has

determined that an environmental impact statement need not be prepared.

The environmental assessment and finding of no significant impact

were prepared in accordance with: (1) The National Environmental Policy

Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.), (2) Regulations of the

Council on Environmental Quality for implementing the procedural

provisions of NEPA (40 CFR parts 1500-1508), (3) USDA regulations

implementing NEPA (7 CFR part 1b), and (4) APHIS' NEPA Implementing

Procedures (7 CFR part 372).

Copies of the environmental assessment and finding of no

significant impact are available for public inspection at USDA, room

1141, South Building, 14th Street and Independence Avenue SW,

Washington, DC, between 8 a.m. and 4:30 p.m., Monday through Friday,

except holidays. Persons wishing to inspect copies are requested to

call ahead on (202) 690-2817 to facilitate entry into the reading room.

In addition, copies may be obtained by writing to the individual listed

under FOR FURTHER INFORMATION CONTACT.

Paperwork Reduction Act

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.

3501 et seq.), the information collection or recordkeeping requirements

included in this final rule have been approved by the Office of

Management and Budget (OMB). The assigned OMB control number is 0579-

0015.

Unfunded Mandates Reform Act of 1995

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public

Law 104-4, establishes requirements for Federal agencies to assess the

effects of their regulatory actions on State, local, tribal

governments, and the private sector. Under section 202 of the UMRA,

APHIS generally must prepare a written statement, including a cost-

benefit analysis, for proposed and final rules with ``Federal

mandates'' that may result in expenditures to State, local, or tribal

governments, in the aggregate, or to the private sector, of $100

million or more in any one year. When such a statement is needed for a

rule, section 205 of the UMRA generally requires APHIS to identify and

consider a reasonable number of regulatory alternatives and adopt the

least costly, more cost-effective, or least burdensome alternative that

achieves the objectives of the rule.

This rule contains no Federal mandates (under the regulatory

provisions of Title II of the UMRA) that may result in expenditures to

State, local, and tribal governments, in the aggregate, or to the

private sector, of $100 million or more in any one year. Thus, this

rule is not subject to the requirements of sections 202 and 205 of the

UMRA.

List of Subjects in 9 CFR Part 94

Animal diseases, Imports, Livestock, Meat and meat products, Milk,

Poultry and poultry products, Reporting and recordkeeping requirements.

Accordingly, 9 CFR part 94 is amended as follows:

PART 94--RINDERPEST, FOOT-AND-MOUTH DISEASE, FOWL PEST (FOWL

PLAGUE), EXOTIC NEWCASTLE DISEASE, AFRICAN SWINE FEVER, HOG

CHOLERA, AND BOVINE SPONGIFORM ENCEPHALOPATHY: PROHIBITED AND

RESTRICTED IMPORTATIONS

1. The authority citation for part 94 continues to read as follows:

Authority: 7 U.S.C. 147a, 150ee, 161, 162, and 450; 19 U.S.C.

1306; 21 U.S.C. 111, 114a, 134a, 134b, 134c, 134f, 136, and 136a; 31

U.S.C. 9701; 42 U.S.C. 4331, and 4332; 7 CFR 2.22, 2.80, and

371.2(d).

2. In Sec. 94.1, paragraph (a)(1) is revised to read as follows:

Sec. 94.1 Countries where rinderpest or foot-and-mouth disease exists;

importations prohibited.

(a) * * *

(1) Except as provided in Sec. 94.21, rinderpest or foot-and-mouth

disease exists in all countries of the world, except those listed in

paragraph (a)(2) of this section;

* * * * *

[[Page 34394]]

3. A new Sec. 94.21 is added to read as follows:

Sec. 94.21 Restrictions on importation of beef from Argentina.

Notwithstanding any other provisions of this part, fresh, chilled

or frozen beef from Argentina may be exported to the United States

under the following conditions:

(a) The meat is beef that originated in Argentina;

(b) The meat came from bovines that were moved directly from the

premises of origin to the slaughterhouse without any contact with other

animals;

(c) The meat has not been in contact with meat from countries other

than those listed in Sec. 94.1(a)(2);

(d) The meat came from bovines that originated from premises where

foot-and-mouth disease and rinderpest have not been present during the

lifetime of any bovines slaughtered for export of meat;

(e) Foot-and-mouth disease has not been diagnosed in Argentina

within the previous 12 months;

(f) The meat came from bovines that originated from premises on

which ruminants or swine have not been vaccinated with modified or

attenuated live viruses for foot-and-mouth disease at any time during

the lifetime of the bovines slaughtered for export of meat;

(g) The meat came from bovines that have not been vaccinated for

rinderpest at any time during the lifetime of any of the bovines

slaughtered for export of meat;

(h) The meat came from bovine carcasses that have been allowed to

maturate at 40 to 50 deg.F (4 to 10 deg.C) for a minimum of 36 hours

after slaughter and have reached a pH of 5.8 or less in the loin muscle

at the end of the maturation period. Any carcass in which the pH does

not reach 5.8 or less may be allowed to maturate an additional 24 hours

and be retested, and, if the carcass still does not reach a pH of 5.8

or less after 60 hours, the meat from the carcass may not be exported

to the United States;

(i) All bone, blood clots, and lymphoid tissue have been removed

from the meat; and

(j) An authorized official of Argentina certifies on the foreign

meat inspection certificate that the above conditions have been met.

Done in Washington, DC, this 23rd day of June 1997.

Terry L. Medley,

Administrator, Animal and Plant Health Inspection Service.

[FR Doc. 97-16748 Filed 6-25-97; 8:45 am]

BILLING CODE 3410-34-P