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Editorial: Non-Tariff Trade Barrier

Chennai, 22 Dec 2021:

Even after trading partners including the U.S. and Europe urged Beijing to delay the implementation of the new law on food imports, China will rollout the new rules from January 1, 2022 as planned..

,Experts saying the policy would further disrupt supply chains. Food imports into China from next year will have to meet new registration, inspection and labeling requirements, customs authorities said in a notice dated Dec. 13. The measures, which were first announced in April, cover a broad range of products from royal jelly to vegetable oils and infant food.

Diplomats from seven economies, which also include Australia, Japan, Canada and Switzerland, have urged China to delay the policy for at least 18 months, citing a lack of clarity on how it will be implemented.

They’re concerned that a failure to comply will result in costly, last-minute logistics delays, and risk disruptions to global food supply chains at a time when the world is already experiencing serious shipping bottlenecks due to the Covid-19 pandemic.

The new rules require all overseas food manufacturers, processors and storage facilities to be registered with Chinese customs. Producers of goods that belong to 18 specific categories would require recommendations by authorities in their home countries, while others must self-register via an online platform.

China has said the move will help create an “effective food safety and sanitation management system” and ensure that food imports meet national regulations and food safety standards, according to the customs notice in April.

Makers of Irish whiskey, Belgian chocolate and European coffee brands are scrambling to comply with new Chinese food and beverage regulations, with many fearful their goods will be unable to enter the giant market as a Jan. 1 deadline looms.

China’s customs authority published new food safety rules in April stipulating all food manufacturing, processing and storage facilities abroad need to be registered by year-end for their goods to access the Chinese market.

But detailed procedures explaining how to get the required registration codes were only issued in October, while a website for companies allowed to self-register went online last month.

China’s food imports have surged in recent years amid growing demand from a huge middle class. They were worth $89 billion in 2019, according to a report by the United States Department of Agriculture, making China the world’s sixth largest food importer.

China has tried to implement new rules covering food imports for years, triggering opposition from exporters. The General Administration of Customs of China (GACC), overseeing the latest iteration of the rules, has provided little explanation for why all foods, even those considered low-risk such as wine, flour and olive oil, are covered by the requirements.

Experts say it is an effort to better oversee the large volumes of food arriving at Chinese ports, and place responsibility for food safety with manufacturers rather than the government.

The European Union has sent four letters to Customs this year requesting more clarity and more time for implementation. Last week, GACC agreed that implementation should only apply to goods produced on or after Jan. 1, effectively granting a delay for products already shipped.

Still, several diplomats and exporters said they saw the rules as a trade barrier for overseas products.

One expert described the rules as a “non-tariff trade barrier”. Food, especially chilled and frozen food, has already faced severe delays clearing Customs in China in the last year due to coronavirus testing and disinfection measures.

Foods including unroasted coffee beans, cooking oil, milled grains and nuts are among 14 new categories deemed high risk that were required to be registered by the end of October by food authorities of the exporting countries.

Facilities making low-risk foods can register themselves on a website that launched in November but has not always worked.

The rules only apply to facilities making finished products to be exported to China, but it provides little flexibility to change sourcing or labels. Some U.S. spirits companies have registered but are still unclear on labelling requirements. It is not clear what will happen if goods arrive without the required registration codes stuck onto packaging. Chinese authorities say that there won’t be a grace period.

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