Safety and quality standards are increasingly replacing tariffs and quotas as focal points for international trade disputes.
In the latest of an apparent escalating series of tit-for-tat moves, Chinese authorities announced a temporary suspension of some imports from several U.S. meat processors, including Sanderson Farms Inc. and Cargill Inc. The notice said tests had found safety problems including salmonella in frozen chicken from Tyson and residues of growth hormones in Cargill's frozen pork ribs.
Beijing is determined to show it has food-safety issues under control after a series of safety scares and scandals have led to product bans in the U.S. and Europe. Chinese authorities have pledged to tighten scrutiny of exported products.
They also have pledged to look more closely at what China is importing from abroad. In recent weeks authorities have turned back shipments of French bottled water, Australian seafood and U.S. drink mix they said were contaminated or failed safety tests.
Safety standards have a history of being used as trade barriers. The back and forth of blocked imports between the U.S. and China looks increasingly like a trade battle.
"We are likely to see these requirements increasingly being used, and abused, as a trade barrier," says Leora Blumberg, an international-trade adviser based in Hong Kong for the law firm Heller Ehrman LLP. Ms. Blumberg says that a series of global trade pacts has reduced import duties across the board and restrained nations' ability to block trade through other means.
"It's difficult to weigh what is the safety element and what is the trade element, but my sense is that both elements are there in the discussions," says Zhang Hongjun, a partner in the law firm of Holland & Knight LLP. "Certainly it provides a lot of support to the people who are anti-international trade or anti-China trade."
The growing food-safety tension between the U.S. and China threatens to further complicate an already delicate period in relations between two of the world's major economies. "The risk is a cascade of punitive or blocking steps, misinterpretation, second guessing and retaliation," Donald Straszheim, of the investment firm Roth Capital Partners, wrote in a recent report. "This is the last thing we need."
No one disputes that regulators have genuine concerns over consumer welfare and food safety. But the highly technical nature of food safety and product standards gives governments a lot of leeway in practice, and makes it difficult to ensure that rules are enforced fairly and objectively.
"There are lots of standards where it's impossible to judge whether it is for consumer protection or to create trade barriers," says Henry Gao, a former World Trade Organization official who now teaches at the University of Hong Kong. The WTO requires any safety standard to have a scientific basis, but it often isn't equipped to assess the science, so it simply looks to see whether a proper drafting process was followed.
Adding to the convergence between the two issues is that sometimes groups calling for trade protection also are flagging safety concerns.
Beijing estimates that 15% of all Chinese exporters encountered some form of technical trade barrier last year, causing them direct losses of some $75.8 billion. China exported $969.08 billion of goods last year.
"Traditional trade policies like tariffs and quotas have less and less impact on international trade, while the impact of technical trade policies such as standards, technical regulations and conformity-assessment procedures is becoming increasingly obvious," the Commerce Ministry said.