US-China Trade Friction Turns Into Food Fight

August 1, 2009

Yes, get ready for food-related issues to come to the fore over the next several months.

First, we’ve got both sides engaged in a cock fight — that is, a WTO dispute over Chinese chicken exports:

China on Monday formally requested the World Trade Organization (WTO) to set up an expert panel to investigate and rule whether a U.S. ban on Chinese poultry imports violates WTO regulations.

At the heart of the dispute is the U.S. Omnibus Appropriations Act of 2009, which contains a section prohibiting any funds being used to facilitate imports of poultry products from China. [Xinhua]

This dispute goes back a couple years when both countries stopped imports due to the bird flu. China opened its market after a while, the US didn’t. Simple, yes?

Not exactly. Seems like a lot of back story to this actually, including other legislation (see below), as well as pressure from US companies that have established partnerships with Chinese chicken producers (e.g. Tyson). As usual with fights over US trade policy, the action revolves around disputes between differently situated American companies.

At the same time, and more importantly perhaps to the bilateral relationship, we have the passage of the Food Safety Enhancement Act in the US House of Representatives. This is the government’s response to all those food scandals last year (which involved domestic and international sources, but probably hurt the image of China the most).

In addition to changing the way the Food & Drug Administration works with respect to inspections and marketing approvals, there are several provisions that will have an effect on food exporters.

Below are some bullet points that give you the gist of the new law. Note in particular the last one regarding country-of-origin labeling. This was apparently fought over by Tyson and other producers that have facilities or partnerships in China. I guess they don’t want to have a “Imported From China” label on their products. Hey, I’d buy it — all my food is made in China.

  • Up-to-date registry of all domestic and foreign food facilities selling to American consumers.† The bill requires all food facilities operating within the U.S. or importing food to the U.S. to register with FDA annually.
  • Dedicated source of funding for enhanced FDA oversight of food safety. The bill also requires all domestic and foreign food facilities selling to American consumers to pay an annual registration fee of $500 per facility.† These annual fees will be used to defray the cost of the heightened inspection regime mandated by the bill.
  • Strong, enforceable performance standards.† Under the bill, the FDA will have clear authority to issue and require food facilities to meet strong, enforceable performance standards to ensure the safety of various types of food.
  • More frequent inspection of food processing facilities.† The bill requires the FDA to inspect high-risk food processing facilities at least once every 6-12 months, inspect lower-risk facilities at least once every 18 months to 3 years; and warehouses at least once every 5 years.† (The FDA currently inspects all facilities on average only about once every 10 years.)
  • Food trace-back system.† Under the bill, the FDA will establish a food trace-back system, building upon and improving the voluntary food trace-back systems put in place by the produce industry, so that public health officials can more easily determine the source of food-borne illness outbreaks.† The bill directs FDA to issue trace-back regulations that enable it to identify the history of the food in as short a timeframe as practicable.† Prior to issuing the regulations, FDA would be required to conduct a feasibility study.† There are also exemptions for certain foods and facilities.
  • Ensuring imported foods are safe.† The bill directs FDA to require certain foreign foods to be certified as meeting all U.S. food safety requirements by third parties accredited by FDA.† In addition, the bill directs FDA to develop voluntary safety and security guidelines for imported foods.† Importers meeting the guidelines would receive expedited processing.
  • Better access to records in order to prevent outbreaks.† The bill gives FDA access to the records of food producers and manufacturers during routine inspections.† Under current law, FDA must wait for food-borne illnesses to occur before the agency can access records.† In the recent case of contaminated peanuts, FDA was unable to access records that might have prevented the outbreak from occurring in the first place.
  • Strong, flexible enforcement tools.† The bill strengthens penalties imposed on food facilities that fail to comply with safety requirements.
  • Authority to order a food recall.† The bill gives FDA the authority to order a recall if a company fails to do so when requested.
  • Country-of-origin labeling.† The bill requires all processed food labels to indicate the country in which final processing occurred.† It also requires country-of-origin labeling for all produce.