International Trade and Market Access: New Challenges for Your Company

1. CMC Annual Conference – May 8, 2014International Trade and Market Access - Is your company facing the new trade challenges? Tom GrahamDirector, Domestic Inspection Division CFIA

2. Market Access • Definition: Re-opening, maintaining and expanding markets to the Canadian industry. • With almost half of Canada's total agricultural and food production exported, the potential for growth in these sectors lies in its ability to expand markets abroad, making market access a key priority for both industry and governments.

3. Increase Market Access: Gov’t & Industry’s Role Industry Foreign Affairs, Trade and Development Canada Agriculture and Agri-Food Canada Canadian Food Inspection Agency

4. Identifying Priorities • Every year, the Government (helped by Industry) identifies “priority markets” deemed to hold the most potential for Canadian exports of agri-food. For example: • Established markets: European Union (EU), Japan, Mexico, South Korea, Taiwan, United States (US), etc. • Emerging markets: China, India, Indonesia, Russia, etc.

5. Outcome of this Ambitious Trade Agenda • As a result of the intense promotion and negotiation work done abroad, importing countries send foreign delegations to verify, audit, inspect and/or gather information on Canada’s food inspection system and/or on regulated parties. • The number of requests to host incoming foreign missions has increased in recent years, and is anticipated to increase even more in the future. • In 2011–2012, the CFIA received 45 audit and inspection missions from more than 21 foreign entities. In 2012–2013, 48 missions were scheduled.

6. Purpose of Foreign Missions • Examples: • visits for new, expanded or to regain market access • audits and/or inspections for ongoing market access • technical assistance, cooperation, outreach, and capacity building • bilateral sanitary and phytosanitary (SPS) committees • consultative committees on agriculture (CCAs) • other senior-level meetings, working group meetings, and invitations and relationship-building.

7. Foreign Audits • Audit– Audits of the Canadian inspection systems are conducted to maintain or expandCanadian access to an existing market, or to obtain access to a new market. • Audits encompass both the: • evaluation of a country’s regulatory system (i.e. CFIA’s Meat Inspection System) and; • the inspection of Establishments as part of the examination process.

8. Incoming Foreign Audits • Process • 8

9. Foreign Audits Process - Preparation • Government of Canada receives foreign audit requests. • Sometimes we are notified as short as 2 weeks prior to the actual audit date. • It is at this time that we are informed of Establishments selection. It can be: • Chosen by the Foreign Country; • Chosen by CFIA; • On a voluntary basis. • If Establishments are chosen by the Foreign Country it is often based on: violations at Point-of-Entry, volume exported, recall history, etc. • Audit Itinerary is then drafted by both the Foreign Country and CFIA.

10. Foreign Audits Process - Preparation • The foreign country may share with CFIA a “foreign country requirements’ verification checklist” and/or a “questionnaire” to be filled out by Establishments and/or CFIA prior to the audit. Often this questionnaire needs to be translated from foreign country language into both French and English. • Once these documents are translated they are forwarded to local CFIA staff for distribution to Establishments. • Local CFIA staff, accompanied by Area and/or National CFIA staff are then required to conduct a “Pre-Audit Verification Activity” in each Establishment to verify compliance to Canadian and foreign country requirements (as published in MOP).

11. Foreign Audits Process - Preparation • Preparation by Industry: If your Establishment is selected for a foreign audit, as best practices the following activities can be done ahead of time to help prepare: • Ensure your HACCP System is complete and up-to-date; • Prepare ahead of time an itinerary for the plant tour; • Do several walks-around and ensure interior and exterior’s condition are in optimal condition (no loose caulking, no dirt or build-up on overheads, equipment in good condition, etc). If necessary re-prioritize already issued work-orders to be completed prior to the audit; • Re-prioritize non-daily cleaning schedule so these items are cleaned prior to the audit; • Conduct an employee meeting and provide a refresher GMP training; • During the audit, ensure you have reliable employees conducting operational sanitation tasks, removing condensation, etc..

12. Foreign Audits Process – Opening Meeting • Once the Foreign Delegation arrive in Canada the CFIA will host an opening meeting in Ottawa. • During this meeting CFIA provide to the delegation information on the Canadian Inspection System so they have a full understanding of our system before they start auditing Establishments.

13. Foreign Audits Process - Delivery • During the foreign audits, the following Government of Canada’s staff may accompany the auditors: • National Operations and/or National Program staff • Area Export Specialist • Regional Veterinary Officer • Supervisor • Veterinarian or Inspector In Charge of your Establishment • Translators • AAFC’s Market Access Secretariat Officer • The Foreign Delegation may be composed of one to several Auditors, however there is always a Lead Auditor.

14. Foreign Audits Process - Delivery • During plant tours, the Establishment’s highest official (Quality Assurance or Production) should accompanying the Foreign Lead Auditor during the tour. • During the tour, this company representative should follow the Foreign Lead Auditor side-by-side and take good notes of his or her observations. • If the Foreign Lead Auditor seems to focus his or her “gaze” on a particular area of the room that is a food safety issue or could potentially be a food safety issue, the company representative should immediately “take charge” and control of the situation and immediately correct the issue. Ideally even before the Foreign Lead Auditor say anything.

15. Foreign Audits Process - Delivery • Each Foreign Auditor has different audit style. For example, some will remain silent and point with their flashlight and if no-one is there to see those findings, these findings will remain undocumented until found in the foreign country final report. • Always show respect to the Auditor’s work, do not have a confrontational attitude. This will not help your Establishment and the industry as a whole. • Remember the true purpose of these audits is to either: • Open new markets to Canadian products, expand existing market to more products or maintain actual market to Canadian products. • Convince that your Establishment meets all necessary requirements and should be allowed to be on the list of Establishments eligible to export to this Country.

16. Foreign Audits Process – Audit Findings • Good audit practices requires Foreign Auditors to discuss audit findings at the Establishment’s closing meeting but they do not always do. • All audit findings will be documented by the CFIA inspector on CVS Task “3.3.01 – Foreign Audit”. This task has just been revised and will be published shortly: • On this new task, all Audit Findings made by Foreign Auditors will be “sorted” into 4 categories of findings.

17. Audit Findings – Canadian Requirements

18. Audit Findings – Canadian Requirements

19. Audit Findings – Foreign Requirements

20. Audit Findings – Foreign Requirements

21. Foreign Audits Follow Up • As per Chapter 18, when a CAR is issued under “CVS Task 3.3.01 – Foreign Audit” the Operator must provide an acceptable written action plan to CFIA. • In addition, the applicable CVS task related to an audit finding that has generated a CAR under “CVS Task 3.3.01 – Foreign Audit” will be prioritized by local staff and delivered within the next month following an audit (for example if condensation was observed during a foreign audit in the cutting room and a CAR was issued under task 3.3.01 for that reason, the condensation task will be delivered in your entire Establishment within the next month).

22. Foreign Audit Final Report • CFIA cannot predict what the Foreign Audit Final Report will contain until it is sent to the CFIA. At the time of the audit, what appears to be an isolated observation in your Establishment may be re-occurring in other Establishments and become an equivalency item in the Foreign Audit Final Report. As a result, no audit observation should be taken lightly and thus be properly documented by the local CFIA inspection staff.

23. Upcoming Foreign Audits