Swine Flu Infects Pork Trade Policies in China

Pig Protectionist Barriers Contrary to WTO Statement

May 5, 2009

China's ban on pork imports shows how powerless the World Trade Organization is when faced with protectionism that jeopardizes the global economy's fragile recovery.

On May 2, the World Trade Organization (WTO) collaborated with 3 other global watchdogs to issue a joint statement that pork products, when handled hygienically, do not cause swine flu infection. The World Health Organization (WHO), the Food and Agriculture Organization of the United Nations (FAO) and the World Organization for Animal Health (OIE) put their respective reputations behind this affirmation.

Citing OIE animal health standard codes, the joint statement went on to proclaim that no justification exists for any country to restrict the import of live pigs or pork products. Instead, all trading nations were encouraged to work together to monitor their pig herds for any suspicious signs of influenza. Yet China continues to respond to the global swine flu scare by slapping trade bans on pork exported from any jurisdiction with confirmed cases of influenza.

On May 2, the Canadian Food Inspection Agency reported that a Mexican farm worker may have infected 220 hogs on an Albertan pig farm with swine flu. Those pigs are now in quarantine pending further scientific testing for the influenza A H1N1 virus.

The day after the Alberta pig farm quarantine was announced, Chinese authorities decided to impose their own brand of international trade quarantine by banning all imported pork products associated with Alberta. Any Albertan pork shipped after May 3 will be returned or destroyed. Chinese officials have already confiscated Albertan pork shipments sent before the ban and will inspect those meat products for signs of influenza.

China was 8th largest importer of Canadian pork products in 2008. The Chinese consumed about US$39.1 million worth of pork exports from Canada, about 1.72% of Canada’s total $2.27 billion in pork product shipments last year.

Chinese Pork Ban Harms International Shipping Trade

China’s ban on pork products extends beyond exports originating from states with confirmed influenza cases. Chinese authorities prohibit shipments through, not just from, any state with known cases of flu infection. This creates a costly trade problem for California, which at last count has 16 confirmed cases plus 44 possible swine flu infections. California’s ports provide an essential Pacific-coast shipping conduit to China.

Transshipment hubs like California are used to combine small shipments into a larger cargo load to be divided up on arrival at the destination port. Transshipments save the costs of multiple ocean voyages to deliver small quantities to the same destination.

Chinese trading authorities prohibit cargo associated in any way with shipments of California pork. Freighters have to be re-routed to ports in other jurisdictions, or ships are sent directly to their Asian ports of destination thus making more trips to carry smaller product loads.

Federal Agriculture Minister Gerry Ritz has said that Canada would not hesitate to launch a complaint with the WTO that challenges China’s restriction on pork product imports. Canada points to how its largest customer for pork products, Japan, is complying with World Trade Organization guidelines.

Rather than impose trade barriers, Japan’s government has focused on informing consumers about the safety of both imported and domestic pork products. While Japanese officials check imported live pigs for flu infection, pork products imported into Japan will be cooked which eliminates the threat of viruses. Therefore, imported pork meat is routinely accepted into the Land of the Rising Sun without rigorous inspection.

Last year, the Japanese consumed $712.6 million worth of imported Canadian pork or 31.3% of total Canadian pork exports.

WTO Has Limited Compliance Power in Global Pork Trade

The Chinese ban on pork may well exemplify how a strong authoritarian regime uses protectionism to build up domestic sales in the world’s largest market for pork. Yet the Chinese ban on imported pork risks undercutting the fragile recovery in global trade during a worldwide economic crisis the severity of which has not seen since the Great Depression.

Now that China is a powerful member of the World Trade Organization, the WTO has little ability to force its will on Chinese authorities- or other countries that decide to develop their own trade policies on products affected by a potential influenza A H1N1 pandemic.

Of the 20 countries that have imposed bans on imported pork, only the Ukraine has formally notified the WTO of its trade action to ban pork products. Instead, the WTO depends on the World Health Organization to actively search official and media websites. The WHO publishes a list of countries imposing trade barriers against pork product exports.

Sources for this Article

This article presents independent calculations and insights based on data from Statistics Canada and the World Trade Organization.

The copyright of the article Swine Flu Infects Pork Trade Policies in China in World Trade Organization is owned by Daniel Workman. Permission to republish Swine Flu Infects Pork Trade Policies in China in print or online must be granted by the author in writing.