China's Trade Practices Not Meeting WTO Obligations, US Exporters, Trade Groups Say

U.S. companies and trade associations criticized China’s high import tariffs, inconsistent import clearance procedures and restrictive sanitary requirements in comments to the Office of the U.S. Trade Representative ahead of an Oct. 2 hearing on China’s commitment to World Trade Organization obligations.

U.S. beef and pork exports to China are being restricted by China’s “lack of adherence” to WTO rules concerning sanitary and phytosanitary measures, the U.S. Meat Export Federation said in comments. Specifically, China requires that all U.S. pork and beef test negative for “ractopamine hydrochloride,” which is commonly used in U.S. hog and cattle production and which contains certain residue limits that are “widely accepted globally.” Removing the chemical from hog and cattle production would add “significant costs to production,” the federation said. China also has “non-science based zero tolerance requirements” for residues of other chemicals and products, such as certain synthetic hormones in beef and “the presence of Salmonella spp. on the surface of whole muscle cuts of pork and beef.”

China imposes a “number of border barriers” that restrict U.S. exports and violate its WTO obligations, the National Association of Manufacturers said in comments. Although China reduced tariffs on manufacturing products as part of its WTO implementation, it did not reduce rates on “key manufacturing sectors,” the association said. China also does not plan to implement certain WTO commitments until 2020, including a single window for customs clearance, forcing U.S. manufacturing exporters to “face higher costs and red tape as well as delays,” NAM said.

China’s customs agencies and regulations are inconsistent, the association added, with different clearance proceedings at “different ports, different agencies and even different customs agents.” The country’s import clearance regime “unnecessarily complicates trade and restricts low-value shipments … from benefiting from expedited shipments treatment,” NAM said.

China’s policies toward genetically modified food imports are restricting U.S. soybean exports, the Specialty Soya and Grains Alliance and the U.S. Soybean Export Council said in combined comments. Chinese customs agencies restrict imports and reject shipments that do not meet a “zero threshold test” for “any GM event in non-GMO imports of field crops such as soybeans,” the comments said. China rejects these imports despite there being “no scientifically supportable test of products that will establish a zero presence.” The two organizations said China is not complying with WTO obligations that say trade measures in agriculture “must follow justifiable sound science.”

U.S. potato exports “continue to be constrained” by high tariffs and restrictive import policies that undermine China’s WTO obligations, the American Potato Trade Alliance said. Although China agreed to “significant reductions” in import tariffs on agricultural products “as part of the accession negotiations,” it has not lowered tariffs on U.S. potato imports, APTA said. China imposes a 13 percent tariff on frozen U.S. potatoes and a 15 percent tariff on dehydrated potatoes, which have gone mostly unchanged for 18 years, the alliance said. “China’s continued imposition of high tariffs on US potato exports is unacceptable for such an economically developed nation,” it said. “After nearly two decades, it is time that China complies with its WTO obligations and reduces, or ideally eliminates, tariffs on US potato exports.”

APTA also echoed comments made by the U.S. Meat Export Federation, saying China does not follow WTO rules on sanitary and phytosanitary measures because its policies are not based on “sound science.” China requires U.S. exporters of processed potatoes to include a phytosanitary certificate, a requirement that is “unwarranted and not based on science” because the product is processed and not intended for consumption, the alliance said. China’s measures place a burden on U.S. exporters but also “set a damaging precedent and risk contagion to other export markets,” such as Vietnam, which now requires a phytosanitary certificate for processed potatoes, the alliance said.

Monocrystal USA, a company that makes artificial sapphires for electronics, said in comments that China imposes a 10 percent consumption tax on imported synthetic sapphires but not on sapphires that are produced domestically. The consumption tax is added onto the existing 6 percent customs duty faced by sapphires, Monocrystal said. “It is possible to conclude that the consumption tax in relation to artificial sapphires imported from the U.S. is applied in a discriminatory manner,” the company said.