China’s membership in the World Trade Organization (WTO) has fueled hopes o...
China’s membership in the World Trade Organization (WTO) has fueled hopes of significant increases in U.S. beef and pork exports to a country of 1.2 billion people, rising incomes, an improving distribution system and an expanding supermarket sector. And even before China joined the WTO, U.S. beef exports to China and Hong Kong increased by 20 percent in 2000 and pork sales were more than ten times what the U.S. had achieved a decade earlier.
The trade has yet to see, however, how exactly China’s bureaucracy will handle its new responsibilities and commitments, according to U.S. Meat Export Federation (USMEF). China’s meat import and quarantine authority – the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) – has just published new post-WTO membership meat and livestock product import regulations and procedures. The regulations, posted on the AQSIQ web page (http://www.ciq.gov.cn/doc/english/) in early August, without notification to foreign supplying governments, are due to go into effect September 1.
The regulations codify many of the meat import procedures that have been in effect since China joined the WTO, such as the role of the Beijing AQSIQ office in approving import requests and the documentation required to obtain such approvals. The regulations also specify that approvals for import permits will take up to 30 days and that the permits are valid for three months.
Traders did not immediately react to the new regulations, as they went mostly unnoticed until USMEF and the USA Poultry & Egg Export Council (USAPEEC) started to circulate copies. In recent days, there has been some concern by USMEF over a stipulation in the new regulations stating that only product accompanied by health certificates listing the Chinese consignee will be allowed entry at ports. Currently, a significant tonnage of frozen meat and poultry entering China is accompanied by health certificates listing Hong Kong consignees, as most frozen meat and poultry trade is transshipped through Hong Kong. In addition, it is widely known that many approved poultry and meat importers in China routinely transfer their import rights and approved permits to other trading entities. According to the regulations, this will become illegal as only goods accompanied by health certificates bearing the approved consignee’s name will be allowed access. According to USDA/Beijing, in an August 22 telephone call, AQSIQ verbally confirmed that they intend to enforce this new rule September 1.
The rules come on the heels of a rocky trading summer for meat and poultry. Trading margins have been low for poultry and pork, and a major crackdown on Nanjing gray channel traders a month ago chilled traders’ enthusiasms and resulted in a serious stock oversupply situation in Hong Kong. More inspections and confiscations were reported last week in the southern port of Panyu, but as of the end of this week, product flow had improved. However, traders noted that buyers are cautious pending implementation of the new regulations.
Despite the post-WTO accession trade problems, the total volume of pork and pork variety imports into Hong Kong from all sources, a good proxy for the health of the China trade, was up 11 percent for the first six months of 2002 compared to the pace of last year. Hong Kong import and U.S. export statistics give conflicting stories of the U.S. position, with Hong Kong imports showing an increase in U.S. pork and pork variety meat arrivals, while U.S. exports show a 9 percent decrease for the first half of the year (see below). Although total pork trading volumes have held, total Hong Kong poultry imports are down 10 percent. Beef shipments have been the least affected, and low trading margins for pork and poultry have encouraged some traders to expand their business scope into bovine products.
According to USDA statistics, U.S. beef exports (including variety meats) to China and Hong Kong are 37 percent higher in volume (18,191 mt) and 28 percent higher in value ($45.8 million) than the equivalent period last year. U.S. pork exports (including variety meats) to China and Hong Kong are 9 percent lower in volume (24,339 mt) and 18 percent lower in value ($91.9 million) than the equivalent period last year.
The U.S. Meat Export Federation is the trade association responsible for developing international markets for the U.S. red meat industry and is funded by USDA, exporting companies, and the beef, pork, corn, sorghum and soybean checkoff programs.
-- USMEF --