Bits Blog: U.S. Proposes Solutions for Apple’s E-Book Price-Fixing

F.D.A. Proposes Rules to Enforce U.S. Standards for Imported Food

WASHINGTON — The Food and Drug Administration proposed new draft rules on Friday that would require food importers like Walmart and Cargill to make sure that their foreign growers and processors were following American food safety standards to prevent contamination in an increasingly globalized food supply.

About 15 percent of food that Americans eat now comes from abroad, more than double what it was 10 years ago, including nearly two-thirds of fresh fruits and vegetables.

The rules, if made final, would shift much of the burden for tracking food safety to companies. Currently, the F.D.A. inspects less than 2 percent of food imports at the border.

American companies would have to prove that their foreign suppliers had controls in place through actions like auditing the foreign facilities, testing food, and reviewing records. American importers would have to keep their own records on foreign suppliers. They would be allowed to hire outside auditors to make on-site inspections.

These are the last major rules needed to implement the Food Safety and Modernization Act, a landmark law passed by Congress in 2010 that was the first significant update of the agency’s food safety authority in 70 years. The administration has been criticized for not moving more quickly to carry out the law. The first set of rules, which applied to domestic producers, was proposed in January. The rules proposed Friday exempt importers of seafood and fruit juices.

The cost to industry of the new rules on imports would be $400 million to $500 million, said Michael R. Taylor, deputy commissioner for foods and veterinary medicine at the F.D.A.

“If you look at the cost of doing it all by the feds, what you end up with is inadequate dollars,” said Dr. David Acheson, a former F.D.A. official who is currently with Leavitt Partners, a food safety and health care consulting firm in Washington. The current system, he said, “doesn’t work anymore. So let’s leverage the private sector.”

The new rules would represent a shift in the way the United States handles food safety by subjecting imported foods to the same safety standards as food produced domestically. Under the current system, the F.D.A. has very limited authority to ensure the safety of food produced abroad. It inspects less than 2 percent of all imported food.

“We don’t live in local land anymore,” said Dr. Acheson. “Though many people want to buy local, the reality is most Americans are buying things in big stores and relying on imported products.”

But major importers like Walmart and Cargill said they already do much of what is proposed under the new rules and that the change would have a bigger effect for smaller producers.

“What we’re really looking for is a level playing field here,” said Michael Robach, vice president for food safety at Cargill.

Consumer advocates said that it remained to be seen whether the new rules would have a real effect and that the test would be whether importers would be required to make sure their foreign sellers were adhering to new standards, or whether it would be voluntary. The Obama administration has also been criticized for taking two years to complete the rules, with some complaining that the White House was more concerned about protecting itself from Republican criticism than about public safety.

The draft rules will be open to comment from the public for 120 days, the agency said. The comment period will end in the late fall for Friday’s rules as well as the ones proposed in January.

The Food and Drug Administration is responsible for the safety of about 80 percent of the food that Americans consume. The rest falls to the Agriculture Department, which is responsible for meat, poultry and some eggs.

Mr. Taylor said the goal of the changes is to build a system that prevents food contamination rather than reacting to it.

“Less than 2 percent of import shipments are physically examined, and we’re up to around 10 million food products annually,” he said. “We all realize we need to do more.”

The agency, which has about 1,600 investigators handling imports of everything from food to drugs and medical devices, has also asked for more funds. President Obama’s 2014 budget reflects that, Mr. Taylor said, requesting about $260 million in additional resources, much of which would go to build the system to regulate imports.

Erik Olson, head of food programs at The Pew Charitable Trusts, which advocated for passage of the law, said the new rules “are a significant step forward,” but need to require on-site audits for risk foods, and that it was not clear that they did.

“Without more claritiy, this could end up as a paper exercise,” he said. “We view on-site verification as absolutely critical to a successful program.”

Mr. Olson said that 8 of the 19 multistate food outbreaks linked to F.D.A. regulated products that have occurred since January 2011 when the bill was signed into law have been linked to imports. Most recently, pomegranate seeds from Turkey sickened more than 140 people across the country with hepatitis A.

European Union Proposes Plan for Failing Banks

BRUSSELS — European Union officials announced an ambitious proposal on Wednesday for a uniform way to deal with failing banks in the region that would include central decision-making and an emergency fund raised from Europe’s banks.

The plan is meant to reduce the chances that struggling governments end up taking their states deeper into debt to save their banking systems, only to face high sovereign borrowing costs that would threaten the stability of the euro currency union.

“We cannot eliminate the risk of future bank failures,” José Manuel Barroso, the president of the European Commission, said in a statement. But the proposal, he said, helps ensure that “it should be banks themselves — and not European taxpayers — who should shoulder the burden of losses in the future.”

The commission, the European Union’s executive body, would assume significant new power under the system, something that makes some countries, including Germany, skeptical. The plan would require approval by a majority of European Union governments and by the European Parliament before it could go into effect.

To be sure, there would be limits to the power of the new centralized system. It could not, for example, order the closure of a bank without permission of the host government if doing so would result in that country’s taxpayers footing some of the bill. And the system would not have access to full amount of the emergency fund for more than a decade.

Even so, analysts have described the plan as one of the most significant transfers of national sovereignty to Brussels yet proposed in the name of securing the euro. The concern of Germany and other countries about giving such authority to the European Commission could bog the proposal down in months of difficult negotiations.

The proposed bank-failure program, known as the Single Resolution Mechanism, was conceived as part of a broader European banking union whose other provisions would include a single banking supervisor and an agreement to impose any losses mainly on a bank’s creditors and shareholders, rather than taxpayers.

The Single Resolution Mechanism would rely on the European Central Bank to signal when a financial institution in the euro area was facing severe difficulties.

A resolution board, supported by a staff of around 300 and made up of representatives from the central bank, the European Commission and member states of the union, would then make a recommendation on how to shut down or shrink a bank. The commission would reserve the right to make a final decision.

The board also could draw on the shared fund to help shut down or radically restructure failing lenders after creditors and shareholders have borne some losses. European Union officials want the size of the fund to be about 70 billion euros by the time it is fully financed by 2025, with money coming from levies on banks.

But the slow buildup of the fund could mean that if bank crises arise in the interim, the new system would be reliant on national funds, and possibly even public money from other euro zone countries. Tapping taxpayer money to bail out other countries’ banks is something that Germany has consented to, but only as a last resort.

On Tuesday, Wolfgang Schäuble, the German finance minister, insisted, as he has before, that changes to European Union treaties would be necessary before the Single Resolution Mechanism could go fully into force. Because treaty changes would be laborious and far from certain, Mr. Schäuble is essentially arguing for a potentially long delay to the banking effort.

But France has called for swift adoption of the plan.

During a news conference on Wednesday to present the plan, Michel Barnier, the European commissioner overseeing financial services, sought to underline the need for rules ensuring the stability of European banks, saying that the sector drove investment in a far larger proportion of the region’s economy than is the case in the United States.

“We’re not going to get diverted by lobbying,” Mr. Barnier said.

Business Briefing | Banking: Fed Proposes New Cash Rules for Big Foreign Banks

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E.P.A. Proposes Tighter Soot Rule

The agency, acting under a court deadline, set an annual standard of 12 micrograms per cubic meter of air, a significant tightening from the previous standard of 15 micrograms, set in 1997, which a federal court found too weak to adequately protect public health. The new standard is in the middle of the range of 11 to 13 micrograms per cubic meter that the E.P.A.’s science advisory panel recommended.

Communities must meet the new standard by 2020 or face possible penalties, including loss of federal transportation financing.

The E.P.A. based its action on health studies that found that exposure to fine particles — in this case measuring 2.5 micrometers in diameter — brought a marked increase in heart and lung disease, acute asthma attacks and early death. Older people, adults with heart and lung ailments and children are particularly susceptible to the ill effects.

The agency estimates the benefit of the new rule at $4 billion to $9 billion a year, and the annual costs of putting it into effect at $53 million to $350 million.

“These fine particles penetrate deep into the lungs, causing serious and costly health effects,” said Lisa P. Jackson, the E.P.A. administrator. “As the mother of two sons who have battled asthma, the benefits are not just numbers or abstract concepts.”

Today 66 counties in eight states do not meet the new standard, including the metropolitan areas of Los Angeles, Houston, St. Louis, Chicago, Cleveland and Pittsburgh. The E.P.A. estimates that by 2020, when the rule is fully in force, only seven counties, all of them in California, will still be out of compliance. Other current rules on mercury, sulfur and other pollution from vehicles, factories and power plants will cause that reduction.

“We know clearly that particle pollution is harmful at levels well below those previously deemed to be safe,” Dr. Norman H. Edelman, chief medical officer for the American Lung Association, said in a statement. “It will save lives,” he said.

Utility industry officials pleaded with the E.P.A. on Thursday to delay the release of the new rule, arguing that the standard is based on incomplete science and would impose costly new burdens on states and cities.

Utilities, joined by trade associations representing manufacturers, chemical companies and the oil and gas industry, said the new rule would push many communities into noncompliance, making it harder to obtain permits for new businesses that create jobs.

Scott H. Segal, representing a coalition of coal companies and utilities, wrote to Ms. Jackson, pointing to a 2011 study saying that citing counties for noncompliance “increases energy prices, reduces manufacturing productivity and causes local manufacturing companies to exit the areas that are designated as being in nonattainment.”

Six senators, led by Orrin G. Hatch, Republican of Utah, wrote Ms. Jackson on Friday expressing concern about the new rule. “E.P.A. should not rush at this time toward imposing more regulatory burdens on struggling areas,” the lawmakers wrote.

Advocates of the new rule said these complaints were overblown. “While the health benefits are extensive, opponents of common-sense pollution standards are repeating false time-worn claims that clean air is too costly,” said Vickie Patton, general counsel of the Environmental Defense Fund.

Jeffrey R. Holmstead, who led the E.P.A.’s air quality office in President George W. Bush’s administration and who now represents business clients, took a more sanguine view of the agency’s action than many other industry spokesmen.

He said the impact of the new rule would depend on how the E.P.A. chooses to enforce it. “Normally, a new standard means a rash of new regulations, but E.P.A. claims that virtually every area of the country will meet the new standard without the need for new regulatory requirements,” he said in an e-mail. “If so, then maybe the new standard won’t cause the type of economic disruption that we’ve seen in the past.”