Trade: The United States reprimands China for its trade compliance
Trade: The United States reprimands China for its trade compliance

Trade: The United States reprimands China for its trade compliance

The United States has issued a stern reprimand for China’s compliance with its World Trade Organization commitments last year.

The US Trade Representative’s annual report, released this week, is highly critical of China’s approach to trade and states that it has failed to embrace the market – oriented principles on which the World Trade Organization’s rules are based.

Many of the issues raised in the report will resonate growing list of Australian red meat processors caught in long-term market access suspensions with China.

In a discussion of trade in agricultural products, USTR describes China as “a difficult and unpredictable market for US agricultural exporters, mainly due to inconsistent law enforcement and selective market intervention by China’s regulatory authorities.”

However, the report notes the progress made through the US-China Phase 1 Economic and Trade Agreement, noting that the agreement addressed many non-tariff barriers to agricultural trade and made “significant reforms in some agricultural sub-sectors, including meat and poultry products and facility registration. . ”

But the USTR warns that China has failed to take meaningful action on some other Phase 1 commitments, including a required risk assessment for the use of ractopamine in beef and pork production.

Following the 2019 trade war, China and the United States reached a tense Phase 1 bilateral trade agreement in early 2020, but China failed “by a wide margin” to purchase an additional $ 200 billion of US goods and services as agreed.

“When China acceded to the WTO (20 years ago), it voluntarily agreed to embrace the WTO’s open, market-oriented approach and to integrate it into China’s trading system and institutions,” the USTR report states.

“China also agreed to take on the commitments set out in the existing WTO rules, while at the same time taking on several China – specific commitments. China’s performance in complying with these terms has been poor. After 20 years of WTO membership “China still embraces a state-run, non-market approach to economics and trade, despite expectations from other WTO members – and China’s own representations – that China would transform its economy and pursue open market-oriented policies approved by the WTO.”

In fact, China’s embrace of a state-run, non-market approach to economics and trade had increased rather than decreased over time, and the ‘mercantilism’ it generates has harmed and disadvantaged companies and workers around the world, often severely, the report said. .

“China also has a long history of violating, ignoring and circumventing WTO rules in order to achieve its industrial policy goals.”

The report identifies and explains numerous “unfair, non-market and distortive trade policies and practices” used by China in pursuit of its industrial policy objectives. It also charts how China has sought to frustrate WTO oversight mechanisms, such as through its poor performance in complying with its WTO transparency obligations.

At times, the United States secured broad commitments from China to fundamentally shift toward Chinese policies and practices, the report said, but those commitments were “unmanageable and China repeatedly managed to follow them up. Over time, China’s commitments also became more difficult to secure. . ”

Beef trade

With a focus on beef trade, the report noted that in May 2017, China undertook to allow the resumption of US beef shipments to its market in accordance with international food safety and animal health standards.

“But China withdrew a month later, insisting it would maintain certain conditions regarding veterinary medicine, growth promoters and animal health that were not in line with international food safety and animal health standards,” it said.

“For example, China insisted on maintaining a zero-tolerance ban on the use of beta-agonists and synthetic hormones commonly used by global cattle producers under strict veterinary control and under Codex guidelines.”

Beef from only about three percent of U.S. cattle is currently eligible for import into China under these conditions.

In the Phase 1 agreement reached in 2020, China agreed to expand the scope of U.S. beef products that may be imported, to remove age restrictions for cattle slaughtered for export to China, and to recognize the U.S. beef and beef traceability system.

China also agreed to set maximum residues for three synthetic hormones legally used for decades in the United States and other countries, in accordance with Codex standards and guidelines. Where Codex standards and guidelines do not yet exist, China agreed to use MRLs set by other countries that have performed scientifically based risk assessments.

While China confirmed to the United States that it had adopted Codex-consistent MRLs for the use of the three synthetic hormones in beef, China has still not published the MRLs.

“The lack of disclosure contributes to legal ambiguity for US beef producers and traders, who remain uncertain about which products will be allowed to be imported into China. China’s lack of disclosure of the MRLs is another example of China’s inadequate implementation of the Phase 1 agreement.” it is stated in the report.

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