USTR Trade Barrier Report Highlights Concerns With China Ag Trade
The Office of the U.S. Trade Representative released its 2023 National Trade Estimate Report on Foreign Trade Barriers, highlighting the most significant foreign market issues U.S. exporters are facing. The report focuses on foreign import policies, technical barriers to trade, intellectual property protection, competition, and more.
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USTR continued to mention China's food safety measures, known as Decrees 248 and 249, which were implemented Jan. 1, 2022, to revise requirements for certain foreign export facilities and product registrations (see 2204010027). USTR last year said the new requirements place "excessive strain" on food producers and exporters, and in this year's report noted that China will be requiring foreign export facilities to submit "additional detailed manufacturing information" beginning in July. The new measure will require "foreign regulatory authorities" to review and certify that uploaded information.
The new requirements are "fundamentally beyond the traditional roles of regulatory authorities," the report said. "If implemented, these new requirements will impose even greater burdens on food manufacturers and food safety regulatory authorities in exporting countries and will therefore pose a new threat to food trade with China."
USTR also continued to say China hasn't yet fully implemented the market access it "promised" through its tariff-rate quota system set up as part of its accession to the World Trade Organization. The U.S. pointed to China's "poorly defined criteria for applicants, unclear procedures for distributing TRQ allocations and failure to announce quota allocation and reallocation results."
China's corn imports, for example, "significantly exceeded TRQ levels" from 2020 to 2022, but the "TRQ issuance, application and allocation processes lacked transparency, and large state-owned enterprises in China appear to have been the only beneficiaries of the increased imports," USTR said.
USTR also said China recently raised or lowered value-added taxes on certain agricultural imports, a practice meant to manage domestic supply but which has caused headaches for foreign shippers. China "sometimes reinforces its domestic objectives by imposing or retracting" the VATs, USTR said. "These practices have caused tremendous distortion and uncertainty in the global markets for wheat, corn and soybeans, as well as intermediate processed products of these commodities."
Other concerns newly mentioned by USTR include Chinese export controls on rare earths, an export ban on certain fertilizers and export restrictions on corn starch. China never published an "official notice" about its corn starch restrictions, USTR said, but "exporters report the export restrictions remain in place."
The report also continued to mention China's "state-led, non-market" trade policies, including its plan to invest in Chinese companies at the expense of foreign firms. One of the goals is to develop technologies that can replace foreign technologies used within China, the report said. "While ostensibly intended simply to raise industrial productivity through more advanced and flexible manufacturing techniques, Made in China 2025 is emblematic of China’s evolving and increasingly sophisticated approach to 'indigenous innovation,' which is evident in numerous supporting and related industrial plans."
The report also discussed sanctions, including the designations announced last year by the Treasury Department against Chinese "water fishing vessels." Treasury sanctioned Chinese fishing companies Dalian Ocean Fishing and Pingtan Marine Enterprise, along with others, for human rights abuses (see 2212090015).
"USTR is determined to pursue all available domestic trade tools to protect the competitiveness of U.S. workers and businesses and will continue to work closely with like-minded trading partners on the shared challenges posed by China’s harmful industrial policies," USTR said in a statement.
The report also touched on Mexican sanitary and phytosanitary measures on biotechnology products, including a biosafety law that requires the country to approve applications for imported biomedical technology. USTR said it has "expressed serious concerns that certain decisions on applications were not based on science and with delays in processing applications." USTR has begun SPS consultations with Mexico on its genetically modified corn ban (see 2303170057).
The report also mentioned technical barriers to trade, including how certain countries haven't yet recognized U.S. Federal Motor Vehicle Safety Standards. Egypt, for instance, does not recognize FMVSS, and exports of those goods "have declined significantly since 2015." The U.S. and Egypt are intending to hold "technical consultations and discussions" in "early 2023" to "assist Egypt in working through its standards concerns." USTR also will discuss FMVSS recognition with Colombia, Morocco, the Philippines and Taiwan.