Chapter Five Trade-Related Technical Measures
I. China’s Further Regulation of
Its Trade-Related Technical Measures
In light of the
commitment made upon its WTO accession, on April 28, 2002 China passed an amendment to the Law of the
People’s Republic of China on Import and Export Commodities, thereby
bringing its guidelines on deciding the lines of export commodities that are
subject to mandatory inspection in consistence with the five major objectives
under TBT Agreement.
Meanwhile, the two
principal systems of product certification, CCEE and CCIB Certifications, have
been consolidated into a unitary system entitled CCC Certification effective as
of May 1, 2002, which grants national treatment to imports.
In addition, the Regulation
of the People’s Republic on Certification and Accreditation effective as of
November 1, 2003, has been formulated to further regulate this
mandatory certification system.
II. Measures Implemented in Shanghai under TBT Agreement
1. Routine Inspection of Imports and Exports
Throughout 2003,
the commodities imported through the Shanghai customs territory that were
submitted to mandatory inspection performed by the Shanghai Entry and Exit
Inspection and Quarantine Bureau numbered 296,100 batches, valued at US$22.56
billion, of which 8,351 batches (US$788.2 million) were rated unqualified,
accounting for 2.8% and 3.5% in terms of batches and value respectively. The
figures for exports subjected to mandatory inspection stood at 407,400 batches
and US$12.4 billion, with 395 batches totaling US$9.74 million unqualified.
2. Compulsory Pre-Entry Certificate Examination
The implementation
of compulsory certification of commodities under the Regulation of the
People’s Republic on Certification and Accreditation conforms to the five legitimate
objectives specified in the TBT Agreement. As a result, pre-entry examination
of certificates performed by inspection and quarantine agencies has been put
into operation so as to ensure that no commodities listed in the certification
catalog be imported unless they have been subjected to relevant certification
and labeled accordingly. During the transitional period between May 1,
2002 and August
1, 2003, CCEE
certificates were acceptable equally as CCIB certificates to inspection and
quarantine agencies so that national treatment on imports be ensured. In 2003,
70,000 batches of imports (worth US$3.812 billion) that crossed border through
Shanghai received certificate examination, accounting for 23.6% and 16.9% respectively
in terms of the number of batches and amount of commodities subjected to import
inspection. 212 batches were selected at random to undergo technical inspection
and 37 batches were found unqualified. The batches ruled out would not be
allowed into domestic market unless made fully compliant according to relevant
provisions of the certification system. From August 1, 2003 Shanghai started to conduct compulsory certificate
examination on imports in more than 300 tariff headings that are listed in the
catalog of mandatory certification. This measure is expected to guarantee that
imports shall meet China’s requirements for safety, sanitation and
environmental protection, safeguard the health and safety of inhabitants, and
maintain stable market order. In order to sustain the healthy development of
processing trade in Shanghai, the inspection and quarantine agencies exempt
from certificate examination the import components and spare parts under the
arrangements of processing trade (i.e. parts and components to be used
exclusively on assembled machines or processed products for re-export);
instead, the application for inspection will be processed against the “Processing
Trade Handbook” (a booklet, granted by the governing agencies to those
assembling and processing plants, in which importation of materials and
exportation of finished goods are recorded) and declaration made by the
business firms concerned. Throughout the period from August to October 2003,
US$210 million worth of parts and components under processing trade
arrangements enjoyed this special treatment. During the days when SARS hit China, the inspection and quarantine agencies
opened an exclusive “Green Passage” to allow priority clearance to those
medical apparatuses that are listed in the certification catalog so as to ensure
prompt delivery of the imported apparatuses to the hospitals and medical
centers.
3. Technical Measures Related to Environmental
Requirements
To address public
concerns on safety, sanitation and environment, China has introduced the so-called “Dossiers
Management” on electromechanical imports. Since the end of July 2003, Shanghai has used this procedure to handle
altogether 731 batches valued at US$160 million, of which 12 batches and 84
units/sets/pieces of used electromechanical imports, worth nearly US$3 million
in all, were rejected upon preliminary inspection for their failure to meet safety,
sanitary or environmental requirements. This measure has been applied
throughout China’s customs territories to paint imports in
case materials not conforming to China’s State Standards should find their way
through into domestic market. During 2003, 2048 applications for importation of
paint were processed in Shanghai, and 21 types of materials failed
specifically selected inspections, so the covering dossiers were shelved and “red
cards” produced. For the same purposes, the measure is also applied to
importation of batteries and cells. 780 dossiers were processed in Shanghai in 2003.
The restrained
importation of recyclable wastes is an effective way to solve the domestic
shortage in supplies of staple raw materials, and to save expenses in foreign
exchange as well. However, the importation and re-use of such wastes must be
put under strict control; otherwise, it will inevitably bring about possible
environmental pollutions, thereby causing extensive damage in the long run. China’s government has applied technical
measures that meet the environmental requirements set out in TBT Agreement to
the importation of recyclables. The measures include procedures such as import
approval, pre-shipment inspection and re-inspection at the border. The various
imported recyclable wastes subjected to inspection and quarantine in Shanghai
in 2003 numbered 25,000 batches, comprising 198,000 standard containers with an
aggregate weight of 2.76 million tons, valued at US$707 million totally. The
major exporters include the U.S., Japan, Europe and some other countries and regions, while the main
processors and users are located in Zhejiang, Shanghai and Jiangsu. According to inspection reports made by
the local environmental authorities, the waste imports not up to China’s Environmental Standards on Import
Control of Recyclable Wastes amounted to 167 batches comprising 1,222
standard containers with an aggregate weight of 13,600 tons, valued at US$3.1
million. The materials were rated as failures because the container loads were
generally found to illegally carry waste dynamos, unwashed plastics, or even
house refuse. For example, a parcel of waste paper from Italy was shipped back
by order because it was found adulterated with a great number of worn clothes,
waste plastic bags and drinking bottles. And another Japan-exported consignment
of PET plastic wastes, wasted synthetic fibers, and fabric scraps was found to
contain 104 cartons/1040 kgs. of
worn garments, which were incinerated soon after. Still another 70 batches
(weighing 245,000 tons and amounting to US$ 41.97 million) were found upon
inspection to be unqualified either in quality or weight. 56 batches failed the
quarantine standards and such pests as lepidopterous
larvae and heterobostrychus aequalis
were intercepted.
III. Measures Implemented in Shanghai under SPS Agreement
1. SPS Inspections
Insect pests are generally
brought in by personnel or conveyance, or together with cargoes. With the
increase in personal movement and development of foreign trade, the risk of
pest intrusion is on the rise. In order to prevent such possible intrusion,
protect human health and ensure production safety in agriculture and animal
husbandry in Shanghai and throughout the country, inspection and quarantine
agencies in Shanghai have taken effective measures on animals,
plants and related products. Certificate examinations and cargo inspections are
both conducted at every port. The goods in which pests were detected either
through on-spot inspection or lab examination will be rejected or destroyed, or
subjected to fumigation, heat-treatment or sterilization. At the airports,
X-ray machines and quarantine dogs are used to help inspectors find out any
contraband animals or plants that passengers might possibly smuggle in.
Throughout 2003,
36,800 batches of plants worth US$ 1.46 billion and 20,100 batches worth US$
1.03 billion were submitted to quarantine inspection before coming into Shanghai. Besides, special inspections were
conducted on 160,000 batches of goods for their wooden packing, of which 35
batches were found carrying pests type 1 such as radopholus
similes, trogodema granarium,
and hypothenemus hampei,
and 190 batches, pests type 2 such as heterobostrychus aequalis, bactrocera dorsalis, and toxotrypana curvicauda. 6 doves
from the U.S. were found infected with parrot fever; and
10 tupping rams from Australia with positive paratuberculosis;
the birds and sheep were slaughtered. The radopholus
similes (banana incurvariid) was for the first time
found out from flowers from the Netherlands, and trogodema
granarium was also found for the first time at
Shanghai port from wooden plates to be imported. Meanwhile, residuals of acephatemet and sulfur dioxide were more than once detected
in imported fruit, salmonella and overproof
quicksilver in imported meat, aquatic products and feedstuffs, and sheep
ingredients from some selected countries against which China has imposed bans.
Based on the information
regarding epidemics suffered by fauna and flora abroad, findings from entry inspection
and the outcome of risk analysis on the epidemics, China has either issued bans or imposed
intensive quarantine inspections against specific agricultural products from
the pest-/disease-hit countries or regions. Since 2002, China has imposed
nearly 20 import bans to prevent avian influenza from the U.S, Chile, the
Netherlands, Belgium, Germany, and the Republic of Korea; New Castle epidemic from
the U.S. and Australia; mouth-and-foot disease from the Republic of Korea;
swine fever from France and Belgium; monkey pox from the U.S.; sheep scrapie from Finland and Romania；and mad cow disease from Israel, Poland, Canada and
the U.S. In addition, more than 90 pre-warning or quick-reaction notices
regarding intensive quarantine inspection have been issued against animals and
plants and related products to be imported to China from 25 countries and
regions including the U.S., Japan and Canada. Upon receipt of the
notifications, Shanghai set out to implement the corresponding measures
according to relevant regulations.
Furthermore, while
the research into the origin of SARS is under way both at home and abroad,
Shanghai has intensified its quarantine inspection against coronaviral
diseases and kept a close watch against fowl infectious bronchitis, swine infectious
enterogastritis, swine epidemic diarrhea, swine
respiratory coronaviral disease, canine coronaviral disease and feline coronaviral
disease. Great efforts have also been made in Shanghai to set up emergency plans against possible
serious intrusions of pests brought about by plant imports and against possible
epidemic diseases by animal imports and carefully study the feasibility of implementing such
plans. As a result, in Shanghai, the control system against foreign pests
and diseases has been further consolidated.
2. Technical Measures Applied to Food and Cosmetic Imports
Since its WTO
accession, China has introduced and implemented Risk
Pre-warning and Risk Controlling Measures in its quarantine inspection and
monitoring on food, agricultural and cosmetic imports and exports, with a view
to preventing unqualified imports. The purpose of Risk Pre-Warning is to
control physical, biological or chemical polluters and hazards possibly or
potentially existing in food or cosmetic imports. Such polluters and hazards
include pathogenic microorganisms, pests and diseases, residuals of
agricultural and veterinarian chemicals, residuals of heavy metals, toxins and
some other pernicious and hazardous materials. According to the provisions of
SPS Agreement and the ordinance of the State Administration of Quality
Supervision, Inspection and Quarantine, Shanghai has adopted such precautions and
treatments as information collection, risk assessment, risk pre-warning, and
quick-reaction measures, to prevent possible risks or potential hazards that
might be caused by food and cosmetic imports and exports.
Commercial
labeling is a means used to mark the actual contents of commodities. Labeling
requirements on food and cosmetic imports and exports are universally-adopted
effective technical measures that are in consistence with both TBT and SPS
Agreements and serve as the key safeguard in the protection network that
countries have framed to ensure the safety and sanitation of foodstuffs. The
developed WTO members such as US, EU and Japan all maintain rigid labeling requirements.
Likewise, China enforces labeling regulation over food imports, and, in the
case of certain special food, or specially processed food, or cosmetics such as
genetically modified food, irradiated food or cosmetics containing animal
protein additives, it is required that related labels clearly indicate
genetically modified contents, irradiation level or ingredients free from
bovine stuffs from epidemic areas. Throughout 2003, altogether 5,294
applications for food labeling examination were processed in Shanghai. At the same time, pursuant to the Regulations
on Labeling for Food Imports and Exports, the relevant authorities in Shanghai require that the application for
inspection of food imports be accompanied by a document certifying labeling
approval (or a document certifying that the application for labeling
examination is under process). As the result of inspections conducted on food
during 2003, 16 batches of imports were found not up to the labeling or marking
requirements or standards.
3. Investigation on Rejected Exports
Investigation on
rejected exports will help gather information about any change made in
technical measures by importing countries and give a timely pre-warning to
local exporters accordingly. During the first half of 2003, it was learned from
the rejections of roasted seeds and nuts by Japan that Japanese were concerned about the
sweeteners used in China’s food exports, and that they were hence
likely to take new measures or enact new regulations. Shanghai Entry-Exit
Inspection and Quarantine Bureau (SEEIQB) therefore passed the information on
to the exporters in this line, reminding them to avoid possible risks. Sure
enough, Japan’s Ministry of
Health, Labor and Welfare provided in October 2003 that from October 17, 2003 all the soy sauces, vinegars, frozen or
refrigerated dim sums exported from China must be subjected to close
inspection for sweetener contents.
4. SPS Registration on Exports
Until December
2003, inspection and quarantine agencies have exercised export SPS registration
management on more than 300 food-exporting processors and producers in Shanghai. The measure has played a positive promotive and administrative guiding role in the systematic
control over SPS quality of food and agricultural exports. In addition, the
CAC-recommended HACCP system has been imposed on over 60 producers who are in
six different lines including canned food processing, and the emphasis is laid
on enterprise management through key productive procedure control and hazard
analysis, with a view to better adapting the exporters to international
practices. Meanwhile, SEEIQB have extended their surveillance on the production
of agricultural and by-products at the works to include the material-supplying
bases; for example, they have taken measures, including keeping in file the
information regarding the related plantations, cultivation farms and aquatic
plants so as to have more effective control over residuals and diseases. To promote
the export of food, agricultural and by-products into developed countries, Shanghai has advised more than 30 enterprises to
register with the governing authorities in the E.U., U.S., Japan, Singapore, etc. All those measures have effectively
helped Shanghai’s food and agricultural products circumvent
the technical barriers set up by importing countries. In 2003, a “dredging”
inspection was conducted on 184 Shanghai-based food-exporting firms, of which
12 passed, 147 were ordered to get rectified within specified time limits, and
25 were removed from the sanitary register.
IV. Analysis of TBT Cases
Involving Shanghai Exporters
Today, developed
countries and regions are still maintaining relatively great technological advantages,
and they have developed unbelievably rigid technical regulations and standards
in various areas such as quality, sanitation, quarantine, environment, packing,
labeling and conformity assessment procedures. For
example, the EU has about 1,200 technical regulations and over 100,000
standards. This fully reflects the progress of civilization brought about by
the development of science and technology. On the other hand, however,
excessively arbitrary and rigid technical standards are frequently used to
function as import restrictions, or simply TBT. Empirical research indicates
that TBT have contributed fairly serious hurdles to Shanghai’s exports.
During the first
half of 2002, the export volumes of meat products, aquatic products and
vegetables dropped by 70%, 65% and 34% respectively, constituting an export
reduction valued at US$17.77 million, owing to the SPS measures implemented in
the target markets.
Throughout the
first six months, Shanghai customs authorities altogether handled 570
batches of rejected exports amounting to US$15.85 million from more than 40
countries and regions, mainly from Japan, Malaysia, the U.S., Hong Kong, and the Republic of Korea. In addition to the main reasons for those
rejections such as inferior quality, poor packing, damage in transit, delayed
delivery and other inefficient services, TBT relating to safety, sanitary or
environmental concerns entertained in those countries and regions are the
factors involved. During the first quarter of 2003 alone, 18 batches of exports,
mainly foods, pharmaceuticals, medical apparatuses, and mechanical and
electrical products, produced by 10 manufacturers were either detained for
further inspection, or simply rejected, by FDA.
Owing to the
problems of dyeing stuffs (mainly azo dyes), Shanghai’s textile exports encountered import
restrictions in target markets including E.U.; electromechanical products will
soon be faced with two E.U. restrictive directives on electronic and electrical
equipment.
BOX
5.1 WTO
Provisions Governing Trade-Related Technical Measures
|
The Agreement on
Technical Barriers to Trade (TBT Agreement) provides for five legitimate
purposes of the application of measures related to TBT: (1) national security
requirements; (2) prevention of deceptive practices; (3) protection of human
health or safety; (4) protection of life or health of animals or plants; and
(5) protection of environment.
Owing to the specific
nature of the trade-related technical measures in agriculture, WTO has
formulated the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) in support of the
application of the Agreement on Agriculture. SPS measures are particular
trade-related technical measures, different from the TBT measures in that the
former are applied to serve the following objectives: (a) to protect animal
or plant life or health within the territory of the Member from risks arising
from the entry, establishment or spread of pests, diseases, disease-carrying
organisms or disease-causing organisms; (b) to protect human or animal life
or health within the territory of the Member from risks arising from
additives, contaminants, toxins or disease-causing organisms in foods,
beverages or feedstuffs; (c) to protect human life or health within the
territory of the Member from risks arising from diseases carried by animals,
plants or products thereof, or from the entry, establishment or spread of
pests; or (d) to prevent or limit other damage within the territory of the
Member from the entry, establishment or spread of pests.
|
BOX
5.2 Efforts
in Motivating Enterprises to Participate in International Standardization
|
Shanghai has been motivating those leading companies to take
an active part in the activities held by International Standardization
Organization so as to have the floor or right to vote in international
standard-setting bodies. Some enterprises or institutions such as Shanghai
Double Happiness Crown City Sporting Goods Co. Ltd (DHS) and Shanghai Iron
and Steel Technology Research Institute have thus acquired appreciable financial
benefits for their good awareness of the standards in the target markets.
Besides, the 708 Research Institute which specializes in the R & D
ship-building participated in the ISO TC188 process (of the ISO Yacht
Standardization and Technology Commission) and is kept well informed of the
development of and amendment to the international standards in this line. In
turn, they are able to apply the information they acquire from time to time
to the development of and amendment to China’s national standards for yacht-building,
which have been made to keep pace with the alteration of relevant international
standards. In a certain sense, the 708 Research Institute has paved the way
for China’s yacht exports.
|
Case
5.1 To
conduct Ram-Source Animal Protein Inspection in Strict Accordance With WTO
Disciplines.
Scientists both at
home and abroad hold it that the feedstuff containing protein from animals
suffering transmissible spongy encephalopathy (TSE) is the medium responsible
for the spread of mad cow disease, and scrapie is
just a case of TSE. Therefore, the inspection conducted on feedstuff imports to
ascertain whether said stuff contains proteins from animals having contracted scrapie is based on sound scientific evidence.
The laboratories
affiliated to the SEEIQB have, through numerous comparative experiments,
perfected a system composed of industrial standards and testing methods that
can be applied to the identification of ram-source ingredients in such animal-source
foodstuff as cow meat bones. Since February 2003, the SEEIQB, by applying this
system, have discovered ram-source ingredients from altogether 14 batches of
U.S.- and Canada-exported cow meat bones (weighing over 5,200 tons and amounting
to more than RMB 11 million), which were meant for users in Shanghai, Guangdong, Zhejiang, Jiangsu, Anhui and Hunan. As this system is based on solid
scientific standards and, in addition, an agreement has been reached with the
experts of APHIS under the US Department of Agriculture, the said goods have
been or will be rejected.