STC Number - 485

China's administrative measures for registration of overseas manufacturers of imported food (26 November 2019)

Maintained by: China
Raised by: Australia; Canada; European Union; Japan; United States of America
Supported by: Korea, Republic of; Philippines; Switzerland; Thailand; United Kingdom
First date raised: June 2020 G/SPS/R/99 paras. 3.138-3.148
Dates subsequently raised: November 2020 (G/SPS/R/100 paras. 3.139-3.141)
March 2021 (G/SPS/R/101 paras. 3.90-3.93)
July 2021 (G/SPS/R/102 paras. 4.91-4.100)
November 2021 (G/SPS/R/104 paras. 3.75-3.86)
Number of times subsequently raised: 4
Relevant documents: G/SPS/N/CHN/472 G/SPS/N/CHN/472/Add.1 G/SPS/N/CHN/1191 G/TBT/N/CHN/1522 G/SPS/GEN/1803 G/SPS/GEN/1862 G/SPS/GEN/1899 G/SPS/GEN/1939 G/SPS/GEN/1983
Products covered:
Primary subject keyword: Other concerns
Keywords: Transparency; Food safety; Certification, control and inspection; Risk assessment; Technical Barriers to Trade (TBT)
Status: Not reported
Solution:
Date reported as resolved:

Extracts from SPS Committee meeting summary reports

In June 2020, the United States submitted document G/SPS/GEN/1803.

Japan, the European Union, Switzerland and Thailand supported this concern.

Japan provided the provided the following statement: Japan shares the concerns raised by the United States, regarding China's draft administrative measures for registration of overseas producers of imported food. China's proposed measures would create unnecessary barriers to trade and have negative impacts on food trade between China and other WTO Members. As far as Japan understands, the proposed measures would require foreign competent authorities to inspect and supervise manufacturing companies in accordance with Chinese laws and regulations, and to confirm their compliance with Chinese laws and regulations, covering all food products imported into China. Japan is concerned that the proposed system would expand the range of the products subject to the measures without scientific risk assessment, although the current system covers only food products of animal origin such as meat and seafood. In addition, there would be considerable negative impacts on foreign products due to increase in relevant cost, labour and time, possibly with arbitrary operations under insufficient transparency. Therefore, Japan requests China to suspend the proposed measures. SPS measures should be taken to the extent necessary and sufficient according to the risks of each product, and the coverage of the measures should not be expanded indefinitely without a prerequisite scientific risk assessment. Japan would like to request China to make timely WTO notifications, provide relevant information along with the details of the system on this matter as appropriate, and address the concerns of WTO Members.

The European Union provided the following statement: The European Union is also very concerned about this measure as this will have a serious impact on imports into China. Our concern is that the measure will have a serious impact on transaction cost of our trade, but it will have very little impact, if any, on its safety. In other words, this measure appears highly disproportionate for low-risk products that are currently traded under a self-registration regime. The European Union kindly requests China to explain the objective of this proposal and stands willing to discuss any legitimate concerns in order to find consensus solutions. The first step towards such a dialogue would be an official notification by China through WTO channels in order to frame our discussions.

Switzerland provided the following statement: Switzerland shares the concerns raised by the United States regarding China's draft Administrative Measure for registration of overseas producers of imported food. Switzerland understands and supports China's objective to ensure that only safe food is imported. However, the draft Administrative Measure appears to expand the registration of overseas manufacturers to include all food categories, irrespective of their risk-profile. The measure therefore seems more trade restrictive than necessary. Switzerland is also concerned about the possible implications for foreign competent authorities, who are obliged to confirm that manufacturers are in continuous compliance with Chinese regulations. Furthermore, implementing the Administrative Measure may cause disruption in trade and delays in the evaluation procedure, thereby negatively affecting the access of businesses to the Chinese market and the availability of imported products in China. China issued the draft Administrative Measure for domestic consultations in November 2019, to which Switzerland already provided its comments and questions. Switzerland would like to request China to notify the draft Administrative Measure to the WTO, and on to seek mutually acceptable solutions with Members on that basis.

Thailand provided the following statement: Thailand shares the concerns raised by the United States regarding China's draft Administrative Measure for registration of overseas producers of imported food. We would like to express our concerns on this measure as follows: First, the scope of the products covered by this measure has not been clearly identified. We are concerned that this measure would be applied to all food products including low-risk food products, which would create unnecessary barriers to trade. Therefore, we would like to request China to provide the list of commodities covered under this measure and to implement this measure as necessary only for high risk food products. Second, since this measure may have a significant effect on international trade. In order to comply with WTO transparency obligations, we request China to notify this draft measure to WTO Members and provide the 60-day comment period. Lastly, to comply with this draft measure, our exporters and authorities need a reasonable period of time to adapt to such draft measure. We therefore would like to seek clarification on the expected date of entry into force and the transitional period provided for trading partners. We hope that China will take our concerns into account.

China provided the following response: The application of a registration system of overseas producers of imported foods is a requirement in China's Food Safety Law. In recent years, China's food imports and number of registered overseas food production enterprises have grown rapidly. The current administration measure for registration of producers does not meet the requirements of a new situation anymore. The objective of revising the Administrative Measures for Registration of Overseas Producers of Imported Foods is to implement the Food Safety Law and improve the existing registration system, which will optimize the registration procedure and clarify the responsibilities of all the relevant stakeholders based on risk management. Currently, this administrative measure is still in the process of drafting. Once the draft is ready, China will notify it to the WTO and welcomes Members to share their reasonable comments or suggestions with us at that time.

In November 2020, the United States reiterated its concern regarding China's draft "Administrative Measures for Registration of Overseas Producers of Imported Foods". In particular, the United States underscored that the draft measures appeared to apply to all food, including low-risk products and products with health or safety certificates, and to require foreign authorities to confirm continuous compliance with China's laws, regulations, and standards. The US statement is contained in document G/SPS/GEN/1862.

Japan and Thailand supported the concern. Japan worried that China's proposed measures would create unnecessary barriers to trade and have negative impacts on trade. Japan requested China to notify its measures, provide relevant information, and address Members' concerns. Thailand expressed concerns on the draft measure for registration of overseas producers of imported food. While recognizing the importance of the measure for ensuring food safety for consumers in China, Thailand requested China to: (i) notify the draft measure and provide time for comments given the measure's potential significant effect on international trade; (ii) list products affected and apply the measure only to high-risk food products; and (iii) indicate the expected date of entry into force and provide for a reasonable time period for Members to comply.

China thanked the United States and other Members. Reiterating that the revision was at a drafting stage, China reassured Members that, once finalized, it would notify the draft for Members' comments.

In March 2021, the United States reiterated its concern regarding China's draft "Administrative Measures for Registration of Overseas Manufacturers of Imported Foods" (notified to the TBT Committee as G/TBT/N/CHN/1522) and its draft "Administrative Measures on Import and Export Food Safety" (G/SPS/N/CHN/1191). The United States indicated that the draft measures appeared to apply to all food products, regardless of risk or whether foods were already subject to additional certification requirements. In addition, the United States considered that China's draft measures would mandate additional certification, audit and inspection documents and procedures, and would likely create trade disruptions. The US statement is contained in document G/SPS/GEN/1899.

Australia expressed its concern on certain aspects of the draft "Administrative Measures for Registration of Overseas Manufacturers of Imported Foods" which it considered to be more trade-restrictive than necessary to fulfil China's food safety objectives. Australia requested China to provide information on the risk analysis and the technical information used to develop the draft regulation. Emphasizing the importance of compliance with WTO obligations, in particular those related to the adoption and recognition of international standards, Australia urged China to reconsider the draft regulation and revise it accordingly.

Japan, the European Union, Canada, Korea and Switzerland supported the concern. Japan considered the proposed "Administrative Measures for Registration of Overseas Manufacturers of Imported Foods" would create unnecessary barriers to trade and have negative impacts on food trade. Japan requested China to notify these measures in the SPS Committee, reconsider the content of the draft regulation to account for Members' comments and concerns and provide an adequate transition period. Regarding these same draft measures, the European Union remarked that the trade registration and control procedures should be proportionate to risk and should avoid unnecessary requirements. Canada considered the new measures proposed by China in G/SPS/N/CHN/1191 to be more trade-restrictive than necessary, and not to be based on a risk assessment. Canada requested China to notify the draft measures proposed in G/TBT/N/CHN/1522 to the SPS Committee for Members' comments and review. In addition, Canada called on China to provide an explanation on these latter proposed measures as it considered the additional licensing, inspections, and approvals to be unjustified, overly burdensome and beyond what was required to ensure food safety. Korea indicated the draft "Administrative Measures for Registration of Overseas Manufacturers of Imported Foods" would apply to a broad spectrum of products leading to an increase in cost, time, and administrative effort, resulting in unnecessary barriers to trade. Korea requested China to reconsider the draft measures and notify them to the SPS Committee. Regarding these same proposed measures, Switzerland noted they included all food categories irrespective of their risk profile and seemed more trade-restrictive than necessary.

China indicated the purpose of the revised administrative measures (Administrative Measures for Registration of Overseas Manufacturers of Imported Food) was to optimize the registration procedures, clarify responsibilities and facilitate trade. China noted it was in the process of replying to Members' comments and that it would study Members' suggestions and promote the implementation of the revised version. China clarified that the newly revised version would not affect the implementation of the agreements already signed between relevant Members and China.

In July 2021, Australia reiterated that some aspects of China's Regulation on Registration and Administration of Overseas Manufacturers of Imported Food, promulgated as Decree 248, might restrict trade more than necessary and be inconsistent with the SPS Agreement. Australia regretted that China's responses to Australia's comments to notification G/TBT/N/CHN/1522 did not provide clear answers. Australia reiterated its request for China to provide the risk analysis, scientific data and technical information, and to notify the measures to the Committee. Australia believed that China's requirement to register all overseas food manufacturers with the food safety authority, following the assessment and approval as equivalent of the food safety management system of the country where they were located by China, was inconsistent with Codex standards and would restrict trade. In Australia's view, the proposed Regulation would discriminate between local and imported foods. Understanding that the Regulation would come into effect on 1 January 2022, Australia requested guidance for the registration of overseas manufacturers of food categories, and requested that establishments that had already completed the existing registration process be exempted from having to re-register. Australia sought timely and transparent feedback in order to continue the successful history of trade in food products with China.

The European Union regretted the publication of Decrees 248 and 249 by China customs without reactions to comments provided to the draft texts notified in G/TBT/N/CHN/1522 and G/SPS/N/CHN/1191. Taking into account the high volumes of products and beverages traded between China and the European Union, and in order to minimize disruptions to economic relationships, the European Union urged China customs to develop guidelines, implementing rules and template forms and notify them through the WTO for comments; indicate the HS codes of product categories codes that must be registered under the 'registration with recommendation' procedure under article 7 of Decree 248; define the types of operations that must be registered; and provide for implementation and transition periods.

Noting the publication of Decrees 248 and 249 (notified in G/SPS/N/CHN/1191 and G/TBT/CHN/1522, respectively), the United States feared that the food facility registration requirements established would create major trade disruptions by mandating documentation and procedures beyond what is currently required for higher-risk products. The United States requested China to identify the specific food safety risks it was attempting to address with these measures. Given the complexity and significant effect on international trade of the proposed measures, the United States asked China to postpone the proposed implementation date of 1 January 2022 and continue engaging with trading partners. The US statement is contained in document G/SPS/GEN/1939.

Canada regretted that comments provided to notifications G/SPS/N/CHN/1191 and G/TBT/N/CHN/1522 had not been sufficiently taken into account by China customs before publication of Decrees 248 and 249. Noting the many successful bilateral arrangements between both countries, Canada was concerned that China's administrative measures were overly burdensome, went beyond the extent necessary to protect against food safety risks, would create confusion for competent authorities and industry due to the lack of details and transparency regarding its implementation, and would create serious barriers to trade, including significant financial impacts. Acknowledging the numerous requests for bilateral meetings to discuss these measures, Canada requested China to provide further clarity on these measures, specifically on the scope of the products impacted and the need of all imported food and food products to be registered with China. Canada asked for an explanation on the relation between these measures with Decree 177 on the import and export of grain. Finally, Canada urged China to delay for 18 months the implementation of Decrees 248 and 249.

Korea was concerned with the economic, time and administrative burden that China's measures would impose on foreign facilities and exporting countries. Korea requested China to provide the scientific evidence or risk analysis used to include a wide range of food products, and the requirement for foreign competent authorities to conduct a preliminary examination or inspection and a recommendation review. Korea asked China to delay the implementation of the measures beyond January 2022.

The United Kingdom argued that introducing changes that applied to all foods regardless of the risk would negatively impact food trade more than necessary. The United Kingdom requested China to provide further clarity on these measures including risk assessments and scientific evidence.

Japan was disappointed with the lack of response to comments provided on G/TBT/N/CHN/1522 prior to the publication of Decree 248. Japan was concerned with the burden that the measures would impose on foreign competent authorities and private facilities that manufacture, process and store food items exported to China. Specifically, Japan was concerned with the ambiguity of the regulation's scope regarding food items and companies to be registered, the duration of the registration, and the specific procedures and timeline of the registration of business operators. To avoid negative impacts on trade, Japan requested China to take into consideration the comments and concerns from WTO Members and reconsider the implementation date of the measures.

Switzerland regretted that the measures included all food categories irrespective of their risk profile, and referred to previous statements for more detailed comments. Switzerland encouraged China to consider alternative ways to ensure the importation of safe food products. Switzerland sought further clarification regarding to product categories (by HS codes) and the types of operations that would need to be registered. Likewise, Switzerland invited China to review the implementation and transition periods and share detailed guidelines well in advance of the date of implementation.

The Philippines shared the concern that China's measures would impact trade in food products, regardless of risk levels. The several layers of regulatory and administrative requirements imposed by the measures would add cost to trade and regulatory burden to competent authorities, and cause undue delays in the registration or approval process. The Philippines called on China to reconsider the measures, in light of the obligations in the SPS Agreement on harmonizing, minimizing of negative trade effects, avoiding undue delay and discrimination, and requiring information limited to what was necessary. The Philippines asked China to refer to the statement and the questions provided in the June 2021 TBT Committee meeting.

China recalled that the Administrative Measures for Registration of Overseas Manufacturers of Import Foods had been notified in 2011 as G/SPS/N/CHN/472. Given increasing food imports, new requirements had been put forward for food safety management, and the administrative measures had been updated in order to implement China's Food Safety Law. Taking into account Members' comments, China had established an eight month transition period following publication of Decree 248 in April 2021. China clarified that that this Decree would not affect the implementation of relevant agreements previously signed.