Background of Equivalency in Organic Regulatory Systems - Organic Trade Association
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Background of Equivalency in Organic Regulatory Systems



Defining equivalency:

  • Equivalency agreements are "the acceptance that different standards or technical regulations on the same subject fulfill common objectives" (Glossary: International Task Force on Harmonization and Equivalency in Organic Agriculture; FAO, IFOAM, UNCTAD)
  • Equivalency is a mutual recognition in the form of bilateral arrangements between key trading partners that allows for successful trade by reducing trade barriers and supporting the strengthening of the supply chain.
  • Equivalency recognizes two systems as comparable and verifiable, though not necessarily identical.
  • When it comes to the development of standards, it is recognized that technical requirements will differ by jurisdiction or region. Ultimately what is more important is that they are seen as comparable without compromising the integrity that has come to be expected from the organic designation in both markets.

What equivalency can achieve:

  • Expanded market access for producers and manufacturers

Establishing equivalency of U.S. and E.U. regulations and standards is a means to ensure greater access to the neighboring market for domestic producers and processors, and a mitigation of new non-tariff trade barriers to importers, with a reduction in unnecessary technical barriers for all.

  • Market growth and consistent supply

Equivalency enables a more consistent supply of organic goods, as it spans various growing conditions and seasons, as well as manufacturing bases. By ensuring consistent supple and introducing a diversity of product availability, the organic market becomes more appealing to consumers and continues its growth.

  • A solution to current inefficiencies and bureaucracy

FAO, IFOAM, and UNCTAD agree that equivalence between country-regulated organic programs offers a solution to the current problems of trade impediments, redundancy and inefficiencies among global organic regulations, standards and management systems.

Benefits from organic equivalency:

  • Domestic producers

Domestic producers will benefit from simplified and streamlined certification (where they once had to pay for multiple certifications or ran parallel systems on their farms). Domestic producers will also enjoy the benefits of the overall growth in the organic market, which attracts more consumers and enhances continuity in the supply of products on store shelves.

  • Consumers

Consumers will benefit as they have access to a more affordable range of organic products, increased quantities and product diversity, and a reliable supply chain. Consumers will continue to have confidence in the organic integrity and government oversight of the products they buy.

  • Manufacturers

Manufacturers will benefit from a strengthened supply of ingredients and reductions in following now-obsolete segregation production systems (i.e. multiple production lines meeting different standards)

  • The domestic market

The domestic market will grow based on a facilitated supply and demand chain, and a reduced regulatory inefficiencies/redundancies, which will benefit producers, manufacturers, consumers and retailers. Even though equivalency opens the domestic market to imports, a competitive advantage is maintained over imported products via the increase in "product of" and "local" purchasing decisions.

Current issues in the organic market that equivalency can help to address:

  • Global trade and market access

Currently, products exported to our major trading partners, other than Canada and the E.U., must meet the destination market regulatory requirements for organic products. In most cases, and especially prior to an arrangement in the Japan, this practice requires that producers meet multiple requirements and hold multiple country specific certifications. Equivalency will make the domestic certification the certification of choice by guaranteeing access to the domestic and export markets.

  • Multiple trade requirements or barriers

The non-tariff barriers to trade under our current organic system can include: multiple certification requirements, redundant government regulations, private sector standards, import regulations, different accreditation systems, variances between standards which deter participation in both markets.

2014 Annual Fund

Research and Promotion 2012