THE UNITED STATES OF AMERICA DEPARTMENT OF COMMERCE
OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
COMMENTS OF
the American Herbal Products Association,
the Council for Responsible Nutrition, and
the National Nutritional Foods Association
ON
MEXICO'S BARRIERS TO TRADE IN DIETARY SUPPLEMENTS
FOR INCLUSION IN THE NATIONAL TRADE ESTIMATE REPORT ON
FOREIGN TRADE BARRIERS
December 12, 2003
The American Herbal Products Association (AHPA), the Council for Responsible
Nutrition (CRN), and the National Nutritional Foods Association (NNFA) are
U.S. national trade association in the dietary supplement industry, These
organizations are comprised of companies doing business as processors,
manufacturers, distributors and marketers of dietary supplements and serve
their members by promoting the responsible commerce of these products.
Background and Subject of these Comments
The United States Trade Representative (USTR) is required to publish
annually the National Trade Estimate Report on Foreign Trade Barriers (NTE).
In a Federal Register notice dated October 31, 2003, USTR's Trade Policy
Staff Committee (TPSC) requested information in identifying significant
barriers to U.S. exports of goods, among other things, in order to provide
views relevant to the preparation of the annual NTE.
Most of the members of AHPA, CRN and NNFA are U.S. based companies that
manufacture or process ingredients for dietary supplements or that market
dietary supplements to consumers. Most of the members of these organizations
therefore have an interest in assuring that preparation of the NTE reflects
barriers to their export of U.S. manufactured dietary supplements into
countries in which they could increase their exports their goods in the
absence of such barriers. The comments provided here are therefore intended
to identify one such barrier.
Barriers to export of dietary supplements to Mexico
The Federal Food, Drug, and Cosmetic Act (FFDCA) defines dietary supplements
as follows (21 U.S.C. 321(ff)):
The term "dietary supplement" -
(1) means a product (other than tobacco)
intended to supplement the diet that bears or contains one or more of the
following dietary ingredients:
(A) a vitamin;
(B) a mineral;
(C) an herb or other botanical;
(D) an amino acid;
(E) a dietary substance for use by man
to supplement the diet by increasing the total dietary intake; or
(F) a concentrate, metabolite,
constituent, extract, or combination of any ingredient described in clause
(A), (B), (C), (D), or (E);
(2) means a product that -
(A) (i) is intended for ingestion in a
form described in section 350(c)(1)(B)(i) of this title; or
(ii) complies with section 350(c)(1)(B)(ii)
of this title;
(B) is not represented for use as a
conventional food or as a sole item of a meal or the diet; and
(C) is labeled as a dietary supplement;
and
(3) does -
(A) include an article that is approved
as a new drug under section 355 of this title or licensed as a biologic
under section 262 of title 42 and was, prior to such approval,
certification, or license, marketed as a dietary supplement or as a food
unless the Secretary has issued a regulation, after notice and comment,
finding that the article, when used as or in a dietary supplement under the
conditions of use and dosages set forth in the labeling for such dietary
supplement, is unlawful under section 342(f) of this title; and
(B) not include -
(i) an article that is approved as a new
drug under section 355 of this title, certified as an antibiotic under
section 357 of this title, or licensed as a biologic under section 262 of
title 42, or
(ii) an article authorized for
investigation as a new drug, antibiotic, or biological for which substantial
clinical investigations have been instituted and for which the existence of
such investigations has been made public, which was not before such
approval, certification, licensing, or authorization marketed as a dietary
supplement or as a food unless the Secretary, in the Secretary's discretion,
has issued a regulation, after notice and comment, finding that the article
would be lawful under this chapter.
Except for purposes of paragraph (g), a
dietary supplement shall be deemed to be a food within the meaning of this
chapter.
Many U.S. based companies sell their dietary supplement products not only in
the United States but also offer these for sale in numerous other countries.
Because the class of goods can be defined differently in other countries,
U.S. firms must sometimes reformulate or relabel products to prepare them
for export. For example, many countries require labeling to be in the local
language so a translated label will be required in order to conform to local
labeling requirements.
These kinds of reasonable regulatory obstacle are generally seen as
legitimate barriers to entry and a simple cost of doing business in a
foreign market. Members of the trade associations that are submitting these
comments have successfully overcome this kind of reasonable regulation, so
that these associations are aware that U.S. based companies enjoy business
opportunities in numerous countries, such as Canada, the United Kingdom,
Italy, Spain, Germany, Russia, Brazil, Japan, Korea, Taiwan, China,
Thailand, Malaysia, Australia, and South Africa, among others.
On the other hand, Mexico has established a regulatory structure through its
General Health Law and supporting regulations that serves as a non-tariff
trade barrier to appears to the importation and sale of U.S. produced
dietary supplements in that country. The most significant obstacles have
resulted from Mexico's standards and certification, including refusal to
accept U.S. manufacturers self-certification of conformance to Mexico's
manufacturing standards for dietary supplements. Specifically:
* Mexico classifies the majority of US produced
dietary supplements, which are a subclass of foods in the U.S., as drugs
(medicamentos) rather than as foods (alimentos). On the other hand, Mexican
manufacturers can freely import numerous of their products that are
classified as medicamentos in Mexico and sell these as dietary supplements
in the U.S.
* Mexico requires that all medicamentos be
manufactured in a licensed drug manufacturing facility by a licensed drug
manufacturer. In comparison, U.S. regulations allow dietary supplements to
be manufactured in food manufacturing facilities by companies licensed to
manufacture and package food, and most U.S. produced dietary supplement are,
in fact, manufactured to such standards and in such facilities. In
comparison, Mexican manufacturers can import and sell dietary supplements in
the U.S. that are manufactured without a drug license in food manufacturing
facilities.
* Mexico requires that medicamentos be submitted to
the Secretaria de Salud for pre-approval as drugs for importation and sale
in Mexico. Pre-approval includes documentation of testing, ingredient
disclosure and shelf life certification equal to drug standards that are
well in excess of U.S. standards. These requirements contrast with the U.S.
allowance for Mexican manufacturers to import and sell dietary supplements
to the U.S. as foods, and without pre-approval by U.S. health authorities.
* Mexico requires U.S. companies wishing to import
dietary supplements as medicamentos into Mexico to obtain prior
certification that their manufacturing facility conforms to Mexico's current
good manufacturing practice for drugs. Mexico has refused to accept U.S.
manufacturers' self-certification or independent 3rd-party certification of
such conformity. In addition, Mexico has not allowed its government
employees to perform site visits at U.S. manufacturers' facilities to
evaluate conformity with Mexican cGMPs.
* In summary, Mexico's regulatory system does not
allow ready trade of U.S. dietary supplements as these are usually classed
as medicamentos, thus requiring pre-approval for marketing and manufacture
in facilities that are drug manufacturing facilities and that require
inspection by Mexican authorities. U.S. companies that attempt to conform to
these rules by pre-registering their products and by assuring that their
U.S. manufacturing facilities are in compliance are stifled by the
"Catch-22" of the Mexican government's insistence that only Mexican
officials are qualified to inspect a facility but that these officials are
not authorized to conduct inspections outside of Mexico.
AHPA, CRN and NNFA believe that Mexico has responsibilities under NAFTA and
WTO to address the non-tariff trade barriers identified here. Industry
estimates that a reasonable estimate of the potential annual increase in
exports of U.S. produced dietary supplements to Mexico that would result
from the removal of these barriers is in excess of $500 million.
Respectfully submitted,
Michael McGuffin
President, American Herbal Products Association
8484 Georgia Avenue, Suite 370
Silver Spring, MD 20910
John Hathcock
CRN
David Seckman
NNFA
