From Wall Street Journal
back and forth 往来
focal points 焦点
As China and other nations exchange heated accusations over the safety of their food and other products, it is becoming clear that safety and quality standards are increasingly replacing tariffs and quotas as focal points for international trade disputes.
In the latest of what appears to be an escalating series of tit-for-tat moves, Chinese authorities Friday announced a temporary suspension of imports of some products from several U.S. meat processors, including Tyson Foods Inc., Sanderson Farms Inc. and Cargill Inc. The notice said China’s tests had found safety problems including salmonella in frozen chicken from Tyson and residues of growth hormones in Cargill’s frozen pork ribs.
The move highlights the Chinese government’s determination to show it has food-safety issues under control after a series of scares and scandals has undermined the confidence of domestic consumers and hurt the image of China’s exports abroad. The U.S. Food and Drug Administration has blocked shipments of Chinese-made toothpaste and of several types of farm-raised Chinese seafood, because of worries about chemical contamination. In recent days, Chinese authorities have pledged to tighten scrutiny of exported products, and said that thousands of unlicensed or unsafe food producers have been closed down.
They also have pledged to look more closely at what China is importing from abroad. In addition to the frozen chicken and pork ribs blocked last week, China in recent weeks has turned back shipments of French bottled water, Australian seafood and U.S. drink mix that authorities said were contaminated or failed safety tests.
Safety standards have a history of being used as trade barriers, a pattern that observers in both China and the U.S. worry may be reappearing. The back and forth of blocked imports looks increasingly like a trade battle, although one in which accusations of endangering consumers have taken the place of charges of unfair competition and dumping.
‘We are likely to see these requirements increasingly being used, and abused, as a trade barrier,’ says Leora Blumberg, an international-trade adviser based in Hong Kong for the law firm Heller Ehrman LLP. Ms. Blumberg, a former South African trade official, says that a series of global trade pacts has reduced import duties across the board and restrained nations’ ability to block trade through other means.
The current U.S. furor over issues such as tainted pet food and dangerous toys that were made in China has emerged at a time when U.S.-China trade is a potent political issue in Washington. Several U.S. lawmakers had called for trade sanctions against China because of what they describe as unfair trading practices, even before safety concerns became widespread.
‘It’s difficult to weigh what is the safety element and what is the trade element, but my sense is that both elements are there in the discussions,’ says Zhang Hongjun, a partner in the law firm of Holland & Knight LLP who divides his time between China and the U.S. ‘Certainly it provides a lot of support to the people who are anti-international trade or anti-China trade.’
The growing food-safety tension between the U.S. and China threatens to further complicate an already delicate period in relations between two of the world’s major economies. ‘The risk is a cascade of punitive or blocking steps, misinterpretation, second guessing and retaliation,’ Donald Straszheim, of the investment firm Roth Capital Partners, wrote in a recent report. ‘This is the last thing we need.’
No one disputes that regulators in China and the U.S. have genuine concerns over consumer welfare and food safety. The rise in public concern over health and food safety in wealthy North American and European countries also has pushed governments to be tougher on safety standards.
But the highly technical nature of food safety and product standards gives governments a lot of leeway in practice, and makes it difficult to ensure that rules are enforced fairly and objectively. That is challenging the international-trade system to find ways to resolve this particularly thorny type of trade dispute.
‘There are lots of standards where it’s impossible to judge whether it is for consumer protection or to create trade barriers,’ says Henry Gao, a former World Trade Organization official who now teaches at the University of Hong Kong. The WTO requires any safety standard to have a scientific basis, but that is usually ‘a procedural safeguard, not a substantive analysis,’ Mr. Gao says. That is because the WTO often isn’t equipped to judge the scientific basis of such rules, so it simply looks to see whether a country followed a proper process when drafting them.
Adding to the convergence between the two issues is that sometimes groups calling for trade protection also are flagging safety concerns.
For instance, the Southern Shrimp Alliance, a U.S. industry group that has filed trade complaints against imported Chinese shrimp, also has called for more testing of imported seafood, calling the nation ‘a known violator of U.S. food-safety laws.’ China has acknowledged shortcomings in its regulatory system but says more than 99% of U.S. food imports from China passed Food and Drug Administration inspection in each of the last three years.
‘Governments are sometimes pressured to go beyond what is necessary to protect human, animal and plant health and to use this type of restriction to protect domestic industries from foreign competition,’ says Ms. Blumberg, of the Heller Ehrman law firm.
China and other developing nations frequently complain that tough safety standards are being used to keep their products out of rich nations’ markets. Poorer nations often don’t have the resources or expertise to cope with constantly shifting technical requirements, or to effectively challenge them as trade restraints. At meetings this year of WTO committees, several developing countries said they feel the expanding number of standards is blocking trade. Argentina, for example, has asked for a review of new standards on acceptable levels of pesticide residues.
China has stepped up efforts to make sure exporters are up to date on new standards in their target markets. The government has estimated that 15% of all Chinese exporters encountered some form of technical trade barrier last year, causing them direct losses of some $75.8 billion. China exported $969.08 billion of goods last year.
‘Traditional trade policies like tariffs and quotas have less and less impact on international trade, while the impact of technical trade policies such as standards, technical regulations and conformity-assessment procedures is becoming increasingly obvious,’ China’s Commerce Ministry said last week.
The WTO has a special committee devoted to food-safety issues in trade — known as ‘sanitary and phytosanitary measures’ — where nations can raise concerns about each other’s policies. But many disputes drag on for years: Out of 245 problems raised at the committee over the past decade, a solution has been reported for only 66, according to WTO figures.
One outstanding complaint by the U.S. is China’s restrictions on imports of U.S. beef, which date from the finding of bovine spongiform encephalopathy, or mad-cow disease, in a U.S. cow in 2003. The U.S. has taken several measures to make sure supplies of beef won’t be contaminated by any future cases of the disease, and contends China’s import ban is excessively cautious. The U.S. ambassador to China recently met with the agency in charge, the General Administration of Quality Supervision, Inspection and Quarantine. But despite such lobbying, the ban hasn’t been lifted.