> China’s New Food Safety Law Could Cost US and Europe Billions - The Food Safety Company China’s New Food Safety Law Could Cost US and Europe Billions - The Food Safety Company
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    Wednesday, 14 December 2016

    China’s New Food Safety Law Could Cost US and Europe Billions

    The Chinese government is currently pushing through a draft resolution which could potentially cost European and North American exporters billions of dollars a year; leaving representatives of the latter economic zones to push hard against the change, Reuters reports.

    Img source: SilkRoad Trade Consultants
    The proposed law regards food safety in China; and states that, from October 2017, all foodstuffs imported by Chinese buyers will have to carry health certificates, even if they are deemed low-risk. As Reuters says, such a move ‘would be far stricter than in Europe and the United States, where certification is typically only needed for perishable goods such as dairy and meat products.’

    The cost of the move to US and European food producers, who claim now to be lobbying hard against the resolution passing through China’s legislature, could potentially be billions of dollars. It’s the age-old problem of red tape cutting profitability. With more hoops to jump through, suppliers in the West would have to increase their investments in logistics, training, time, diligence and materials, to name but a few, in order to sell goods to Chinese buyers.

    German Ambassador to China Michael Clauss claimed ‘The draft has clearly crossed the line between protecting the consumer toward outright protectionism of the domestic producer.’

    Some are surprised to learn that China, which is renowned for its central government’s hands-off stance when it comes to business and trade (despite its hands-on approach toward political, cultural and social issues), is taking such a protectionist step.

    However, many commentators also speculate there is almost certainly a connection between the pushing of this law by Chinese authorities and the election to the US Presidency of Donald Trump, who, throughout his campaign, vowed to take a tougher line on Chinese imports.

    In that sense, the latest move is something of a like-for-like exchange: protectionism for protectionism. Nevertheless, the effects of such a process won’t be confined to the United States.

    Europe alone (which does also have existing beef with China regarding metals and agriculture) exported over €170 thousand-million worth of goods to China in 2015, of which €45.9 thousand-million were foods. In the other direction, China exported over €350 thousand-million worth of goods to Europe in 2015, of which only €8.1 thousand-million were food products (a breakdown of which can be found in chapters 2, 4, and 7-24 here).

    Now, however, Europe too will have to brace itself for the oncoming regulations, which do seem rather likely to pass. 

    James Stannard

    James has a Bachelor’s degree in History and wrote his dissertation on beef and protest. His heroes list ranges from Adele to Noam Chomsky: inspirations he’ll be invoking next year when he begins a Master’s degree in London.
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