Ping pong it's not, but observers could be forgiven for thinking that the ongoing tit-for-tat food import bans between China and the United States, bear a more than uncanny resemblance to the game. Over the past two months both countries appear to have gone into laager mode over concerns that food is failing to meet safety and health standards, blaming each other openly for poor quality imports. However, the real concerns regarding globalized food production may become clouded, as the trade bans become a political tool for authorities in each country, analysts said.
The reality of the globalization of food production is that the entire chain of farmers to processors to distributors is under enormous pressure to keep costs down for consumers, said Steve Suppan, policy analyst at the nonprofit Institute for Agriculture and Trade Policy in Minneapolis, and lobbyists for major food producers do their best to ensure U.S. inspectors are under-funded or understaffed. Only about 1 percent of food imports are checked for contaminations ranging from salmonella to toxic pesticides such as DDT. An estimated 5,000 people in the United States die each year from unsafe food, according to the Centers for Disease Control and Prevention, and another 76 million become sick.
There are indications that food safety is becoming a token in a larger trade war between China and the United States. The issue first came to public attention this year when contaminated gluten added to pet food was traced to a Chinese manufacturer. U.S. politicians used the pet food scare to address concerns over food imports from China during the Strategic Economic Dialogue (SED) between the two countries held May 22-23 in Washington, D.C.
"We are likely to see these requirements increasingly being used, and abused, as a trade barrier," Leora Blumber, a Hong Kong-based trade adviser for law firm Heller Ehrman LLP, told the Wall Street Journal.
Since the SED, the United States has banned some seafood shipments and health supplements from China and China in turn has banned some imports of chicken and pork from the United States.
However, a very real and serious danger from contaminated food imports exists, Suppan said, because regulators have limited resources in ensuring the safety of food grown in or imported into the United States. The U.S. Food and Drug Administration (FDA) is responsible for the safety of food imports excluding meat and poultry, which are under the authority of the U.S. Department of Agriculture. The number of regulatory affairs employees at the FDA shrank from 4,003 in 2003 to 3,488 this year, and the number of non-criminal foreign and domestic inspections dropped from 11,566 in 2003 to 9,038 in 2005. However, the amount of food imports into the United States skyrocketed from 4 million shipments in 1997 to more than 15 million last year.
"The whole thing, from a management perspective, is just a shipwreck," Carl R. Nielsen, former director of the FDA division that handles import operations and policy, told the Boston Globe.
The problem of food safety is not unique to Chinese imports. According to FDA data, more imports from Mexico and India were stopped at the border from June 2006 to June this year. The most common violations were for salmonella and "filth" in the shipments.
Fixing the FDA's inspection operations is estimated to cost at least $400 million, and producers will be forced to pass on the costs of compliance to consumers.
Who is to blame?
Some U.S. consumers blame China for lax safety standards in food production, others blame the FDA for failing to catch violations or the government for failing to adequately fund the inspection programs. However, a silent but important influence on globalized food production has not been the subject of much public or media scrutiny.
For every food exporter looking to access the American market, there is a huge mega-importer looking for the lowest price.
"Some place like Wal-Mart is constantly squeezing the firms to reduce costs. At some point you can't internalize the costs of compliance with safety criteria," Suppan said. "With food you have a different challenge, especially if it's a processed food where you have ingredients coming from a lot of different places in the country. If you don't have what they call a 'chain of custody' and you can't maintain the cold chain to ensure there's not a chance for contaminants or pathogens to forge, then you have a big-time problem."
The United States has huge, highly centralized plants and processing centers that churn out mass quantities of meat or other food products quickly and efficiently. That keeps costs down, but a problem at one of these plants can quickly affect a huge number of products and portion of the American diet. The United States has its own problems with food safety through these plants, as evidenced by an outbreak last year of E. coli in bagged fresh spinach that affected multiple U.S. states and brands.
Importers may push Chinese farmers and food processors to adopt U.S.-style production to keep costs low, but it comes at a price.
"As long as we are pushing for the lowest price all the time, driving our supply chain, you get more efficient. But at a certain point there is no more efficiency and you sacrifice quality," Nancy M. Childs, professor of food marketing at St. Joseph University in Philadelphia, told The New York Times.
In the United States, lobbyists for mega food importers have successfully blocked initiatives such as country-of-origin labeling for food, raising doubts that more stringent food controls on imports will be adopted, Suppan said.
"These lobbyists are extremely well-funded, and their presence in Congress is continuous. A lot of the lobbyists are former members of Congress," he added.
These ex-politicians have open access to government officials, so concerns about food safety are not likely to be resolved with real change.
What about the WTO?
However, even if the U.S. Government is hamstrung by lobbyists and Chinese producers are crippled by pressure to cut costs, other trade regulators such as the World Trade Organization should be able to ensure food trade is safe.
"There are a couple sides to this equation," Suppan said. "One concerns what should be bilateral sanitary equivalency agreements, which is what the World Trade Organization requires and what presumably the U.S. and China negotiated as a condition of Chinese accession to the WTO."
Under these bilateral agreements, countries pledge to accept different measures that provide the same level of protection for food, animals and plants, according to the WTO.
"There was obviously either a cursory investigation by the U.S. of China's food safety controls, or there was something more extensive and there are processing establishments that are not qualified that have put a product into the system for export," Suppan said.
WTO equivalency agreements require countries to pass more stringent documentation requirements and inspections on products they have less experience in exporting, he said. In China's case, if onsite visits did not happen before, then presumably they will happen now, Suppan added. That means a lot of extra expense for Chinese farmers, who will have to pass the costs on to consumers.
"The simple closing of a lot of small feed mills and small processing establishments, which apparently is how the Chinese Government is responding, doesn't in itself fix the problem," he said. "The real issue is: Are there certified export establishments?"
The WTO department in charge of overseeing food safety has received calls to extend special treatment to developing countries in their compliance efforts.
"I can assure you, that besides small developing countries getting more technical assistance and perhaps some more infrastructure for FPS laboratories, that there will be no special treatment," he said.
(Reporting from New York) |