Legitimacy of trade barrier considered
By Dai Yan (China Daily)
Updated: 2004-03-02 10:23

Chinese firms could win the right to probe the legitimacy of rising trade barriers erected by foreign countries, a government official indicated on March 1.

The official from the Bureau of Fair Trade for Imports and Exports of the Ministry of Commerce said the ministry was considering the request to investigate a trade barrier imposed by the Japanese Government on dried laver, following a request filed by producers of the edible seaweed.

The Jiangsu Provincial Laver Association, which represents 107 members, submitted its application the first in China to the ministry last Wednesday, requiring the ministry to look into the legitimacy of the Japanese action.

The Ministry of Foreign Trade and Economic Co-operation (Moftec), which was merged into the Ministry of Commerce last March, issued a temporary rule on investigations into other countries' trade barriers in September 2002.

The rule stated that the ministry should decide within 60 days whether to accept the application.

If the investigation finds trade barriers exist, the ministry will start bilateral negotiations with the relevant countries or turn to a multilateral dispute settlement mechanism within the World Trade Organization (WTO).

Zhang Hanlin, an expert from the China Institute for WTO Studies, said the first application could act as a catalyst to other industries suffering from rising trade barriers in recent years.

Wang Tingzhu, vice-chairman of the Jiangsu Provincial Laver Association, said the Japanese discrimination was intolerable.

"We have been barred from exporting to Japan for years because Japan only gives import quotas to dried laver from South Korea," Wang said.

Trade in dried laver, a major element of Japanese cuisine, is under quota management in Japan. Japan is the world's largest laver consumer.

Wang said he failed to understand the restrictions, as the species, quality and production methods of dried laver from China and South Korea are similar.

Jiangsu produces more than half of the nation's dried laver.

Zhang said trade barriers often include technical standards, quarantine and quality inspection measures, intellectual property rights, customs procedural requirements, environmental protection and labour standards, he said.

Chinese exports mostly suffer from technical standards, quarantine and quality inspection as well as customs procedural measures, Zhang added.

"Trade barriers are putting increasing pressure on Chinese exports," Zhang said.

Japan banned imports of Chinese vegetables for allegedly containing too much pesticide. Concerns over use of antibiotics also stopped exports of Chinese aquatic products to Japan and Europe.

The US Food and Drug Administration required all foreign companies that make, process, pack or warehouse food for export to notify it by noon the day before their goods arrive at the US border.

Their actions, putting stricter requirements on foreign countries, hinder free trade, Zhang said.

The latest investigation shows 71 per cent Chinese exporters and 39 per cent of Chinese commodities ran up against technical barriers, resulting in an estimated total annual loss of US$40 billion.

Although the WTO works hard to promote trade liberalizations, trade protectionism occasionally arises to increase the number of trade barriers around the world, Zhang said.

Some WTO members are relying increasingly on these barriers to control China's export growth because they are less obvious and no multilateral trading rules are currently available to keep them within limits.

It is essential for domestic companies to show the initiative to challenge these trade barriers, he said.

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