Chinese exports will encounter increasing technical barriers among major trading partners like the United States and the European Union in the coming years because of strict new rules on energy use and chemical content in those markets, a top official warned.

Although it is still too early to say what kind of impact such barriers would have on exports, they could be serious, said Li Changjiang, minister of the General Administration for Quality Supervision, Inspection and Quarantine (GAQSIQ).

The growing number of foreign regulations has caused Chinese exporters to suffer huge losses, and it is conceivable that such growth will continue in the future, Li said.

Consumer goods generally have to conform to technical regulations and standards that set out specific characteristics for a product, such as its size, shape, design, function and performance. These rules can also cover labelling and packaging.

Export products that fail to meet the standards in the markets they are destined for will be denied entry to those markets.

Such regulations impose costs on manufacturers and exporters, which have to adjust their production facilities to comply with the requirements and pay for testing and certification to prove that their products meet the foreign regulations. Even translations and explanations of the regulations can raise costs.

A Xinhua report said about 90 per cent of Chinese agriculture and food import and export enterprises are affected by foreign technical regulations, costing the country approximately US$9 billion every year.

Official figures also show that the Restrictions on Hazardous Substances (RoHS) directive, which the European Union adopted on July 1, affected more than US$60 billion worth of electronic and electrical products exported from China.

China received 895 notifications of similar technical barriers from WTO members last year, up 50 per cent from 2002. The number of notifications involving sanitary and phytosanitary measures reached 853, up 30 per cent over 2002.

Phytosanitary refers to the health of plants and covers such issues as plant diseases and pests.

The majority of these notifications came from China's major trade partners, such as the United States, the European Union, Japan, New Zealand, Brazil, Canada and Israel.

GAQSIQ has taken steps to address trade issues involving automobile exhaust, food components, chemical residues and animal diseases. These areas will continue to be key issues for exporters in coming years.

Li said most technical standards are adopted and applied in an effort to protect human safety or health, animal and plant health, and the environment.

However, there is a risk that some countries could use technical regulations and standards to protect favoured domestic industries.

Li said China would actively take on inappropriate regulations through the World Trade Organization's dispute-resolution mechanisms.

This effort has already born some fruit. Japan last month lowered its standards for chemical residues in 18 categories of food products, and at almost the same time the European Union lowered standards for pesticide residues on Chinese tea from 0.01 mg per kilogram to 30 mg per kilogram. With a better understanding of WTO rules, we will be more active in international trade affairs, Li said.

(China Daily 12/14/2006 page2)

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