On December 11, 2001, China formally joined the World Trade Organization (WTO) and became the 143rd member of the WTO. Over the past 19 years, it has passed technical regulations, standards, conformity assessment procedures, sanitary and phytosanitary measures on the grounds of maintaining national security, protecting human health and safety, protecting the lives and health of animals and plants, protecting the environment, ensuring product quality, and preventing fraud. The technical trade measures to be implemented have become a difficult problem that Chinese enterprises cannot avoid in their exports as Chinese manufacturing continues to move towards the international market.
Why should companies attach importance to technical trade measures?
Technical trade measures as a WTO member follow the principles of the WTO’s Agreement on Technical Barriers to Trade (TBT) and the Agreement on the Implementation of Sanitary and Phytosanitary Measures (SPS Agreement) The established regulations, standards, certifications and other trade measures are the”prerequisites” for enterprises’ products to enter a country’s market. Only when the product has been inspected, tested, quarantined, registered, and supervised, meets the country’s technical requirements for safety, health, environmental protection, and quality, and obtains relevant certifications, can it enter the country’s market.
What harm will companies suffer if they ignore technical trade measures?
The impact of technical trade measures on enterprises is mainly reflected in two aspects:
One is directly damaged. If it does not meet the requirements of the importing country’s technical trade measures, the company’s products may be subject to penalties such as detention, recall, destruction, and return of the importing country, causing direct losses. If the company’s products are detained and returned for economic losses due to non-compliance with the pesticide residue limit standards of the importing country.
The second is cost increase. In order to meet the requirements of technical trade measures, enterprises must carry out technological transformation, replacement of labels and packaging, new inspections, quarantine, certification, processing and various procedures, resulting in a large amount of additional costs. For example, in order to meet foreign environmental protection requirements, enterprises strengthen their investment in raw material procurement control and testing.
According to the investigation of the General Administration of Customs, 19.68%of my country’s export enterprises were affected by foreign technical trade measures in 2019 due to returns, destruction, product degradation, or loss of orders, etc. The direct losses incurred amounted to 69.208 billion yuan, and the additional cost was 16.114 billion yuan due to technological upgrading and transformation, testing and certification.
What types of technical trade measures companies encounter?
(1) Industrial products
1. Manufacturer or product registration requirements (including marketing authorization, approval)
2, technical standard requirements
3. Certification requirements
4. Label and logo requirements
5. Requirements for packaging and materials
6. Environmental requirements (including energy saving and product recycling)
7. Special inspection requirements (such as designated inspection locations, institutions, methods)
8. Personal safety requirements of the product
9. Limit requirements for toxic and hazardous substances in industrial products
10, measurement unit requirements
11. Requirements for wooden packaging
(two) agricultural food products
1. Registration requirements for planting and breeding bases, processing plants, and warehouses
2. Requirements for animal diseases
3. Requirements for plant diseases, pests and weeds
4. Requirements for pesticide and veterinary drug residue limits in food
5. Requirements for food microbiological indicators
6. Requirements for food additives
7. Limit requirements for heavy metals and other hazardous substances in food
8. Requirements for food contact materials
9. Food labeling requirements
10. Requirements for wooden packaging
11. Requirements for allergens in food and cosmetics
What should companies do if they encounter technical trade measures?
(1) If the content of the measures is unclear and untrue, please consult in time
In order to earnestly fulfill the WTO obligations related to transparency, my country has established the TBT/SPS National Enquiry Point (and the People’s Republic of China’s WTO/TBT-SPS National Notification and Enquiry Center), On behalf of the Chinese government agencies, industry associations, enterprises and individuals, consult with other WTO members, carry out notifications and comments. At present, the center is located in the International Inspection and Quarantine Standards and Regulations Research Center of the General Administration of Customs (referred to as the”Standard Law Center”).
When companies encounter problems such as unclear implementation time of foreign technical trade measures, unclear rules, and inability to verify, and cannot obtain accurate information through other channels, they can directly contact The local customs reported that through the International Cooperation Department of the General Administration of Customs or the WTO/TBT-SPS National Notification and Consultation Center of the People’s Republic of China for external consultation.
In November 2020, in response to electronic equipment companies reporting that an importing country requires equipment to be marked with electronic Sort out the content of notifications of relevant technical trade measures, organize enterprises and third-party organizations to conduct analysis and discussion, and submit suggestions to the TBT/SPS Notification and Consultation Center of the People’s Republic of China for external consultation, prompting foreign parties to clarify the application of exception clauses in their responses, which is for companies Quickly solve the problem of information asymmetry.
In 2020, some companies reported that South Korea required me to test six kinds of viruses (pathogenic microorganisms) before exporting pepper seeds, but the test results do not need to be on the plant The remarks in the quarantine certificate indicate that South Korea implements sampling tests for 6 kinds of pathogenic microorganisms on imported pepper seeds. On the premise of confirming that the South Korean side had not notified the WTO of this measure before, Jinan Customs organized enterprises and research institutions to collect and sort out the current laws and regulations of South Korea, through analysis and comparison, put forward suggestions and opinions, and urge foreign parties to consult with the International Cooperation Department of the General Administration of Customs. Clarify the contents of the catalogue list, quarantine methods and judgment standards.
(2) Measures that have just been released but have not been implemented, actively comment
In accordance with WTO’s transparency obligations, WTO members must report to other WTO members when formulating, revising and implementing technical regulations, standards, conformity assessment procedures and other technical trade measures. Announce, give other members a reasonable time (usually 60 days) to put forward written comments and give a reply to ensure that other members understand in time and take measures to adapt to changes. It is an important right of my country as a WTO member to comment on notifications on technical trade measures issued by other members.
At present, the International Cooperation Department of the General Administration of Customs is responsible for the notification and review of technical trade measures in the customs system, and local customs have the responsibility to carry out notification and review of technical trade measures. When companies encounter new technical trade measures that have not yet been implemented, and believe that they have unreasonable and unscientific requirements that affect the company’s exports, they can submit comments to the local customs, actively participate in the notification and comments organized by the customs department, and request foreign delays Opinions and suggestions on changes, or even cancellation of implementation of relevant measures shall be reported to the International Cooperation Department of the General Administration of Customs and the WTO/TBT-SPS National Notification and Consultation Center of the People’s Republic of China to issue opinions to protect the interests of the industry.
In response to the draft”Health Functional Food Standards and Regulations” notified by South Korea to the WTO in August 2020, Jinan Customs actively cooperates with the International Cooperation Department and Standards Law Center of the General Administration of Customs Carry out external review work, put forward the lack of appearance inspection methods and judgment standards, and lack of risk analysis in the formulation of certain substances in accordance with WTO rules, and notify the South Korean side through the WTO/SPS National Notification and Consultation Center of the People’s Republic of China. The South Korean side adopted the Chinese side’s opinion and replied on October 10 that it had announced the appearance inspection methods and judgment standards on its official website, providing a standard basis for the export of my country’s health functional foods to South Korea.
(3) If the measures are to be implemented or have been implemented, raise concerns
WTO has two committees, TBT and SPS. The aforementioned committees hold three regular meetings each year. At regular meetings, members can put forward “special trade concerns” for measures and practices that other WTO members intend to implement or have already implemented, which do not comply with the principles of the TBT and SPS agreements and cause unnecessary obstacles to trade, and urge other members to pay attention to relevant measures. Clarify, modify, abolish, postpone implementation, etc., to jointly safeguard the interests of WTO members.
At present, customs in various regions will collect foreign technical issues encountered by enterprises in export according to the requirements of the International Cooperation Department of the General Administration of Customs before the regular WTO/TBT and SPS meetings are held. Trade measures hinder the situation. When companies encounter obstacles to technical trade measures to be implemented or implemented, they can report to the local customs, participate in industry discussions organized by the customs department, and put forward appeals and opinions. The International Cooperation Department of the General Administration of Customs will actively promote problem solving through international cooperation mechanisms Or develop for the better.
In February 2020, the Shenzhen Customs immediately organized the issue that medical device companies in the customs area reported that they were restricted by a country’s proposed technical trade measures and could not obtain certification for export in a short time. Investigate industry associations and related enterprises, systematically carry out legal analysis and research, and submit special trade concerns to the General Administration of Customs. In March, at the WTO/TBT regular meeting, the International Cooperation Department of the General Administration proposed to the country”delay the implementation of the new medical device regulations” and other opinions, and won the support of many WTO members to promote the final delay of the implementation of the regulations by foreign parties, and cooperate with Chinese enterprises. It has bought precious time to regulate exports and support the global fight against the epidemic.
In June 2020, in response to the company’s report that Thailand has introduced new pesticide residue testing regulations, requiring batches of 134 pesticide residue testing for fresh fruits and vegetables exported to Thailand, and export of related products. Facing the issue of the risk of stagnation, Jinan Customs immediately collected Thailand’s new regulations and organized technical and trade experts in the customs area to conduct research and analysis, and raised trade concerns in terms of testing items, testing frequency, and scope of coverage. The International Cooperation Department of the General Administration adopted multiple and bilateral channels. The second diplomatic engagement prompted Thailand to adjust the reasonable control measures for imported fresh fruits and vegetables. The relevant testing items and corporate testing costs have fallen by 866%and 80%, respectively. It is expected to save our company’s average annual testing costs by more than 3.6 billion yuan and the time of cargo detention. It is expected to shorten 5-7 working days and guarantee the normal export of approximately 10 billion fresh fruits and vegetables to Thailand each year.
Contribution/Research Center for International Inspection and Quarantine Standards and Technical Regulations of the General Administration of Customs (and the People’s Republic of China WTO/TBT-SPS National Notification and Consultation Center), Shenzhen Customs, Jinan Customs