TRADE FACILITATION AND CHINA (SHANGHAI) PILOT FREE TRADE ZONE (CSPFTZ)

Implementation of the WTO Agreement on Trade Facilitation will provide a major boost to global trade in the order of billions of dollars anually. Early implementation will increase a country’s global trade competitiveness, stimulate its domestic economy and create jobs. As GACC continues implementation of its Customs 2020 Strategy and considers rolling out pilot reforms from the CSPFTZ, EUCTP II organised the Seminar on the WTO Agreement on Trade Facilitation (29-30 October 2014) in Beijing to inform these efforts. The seminar not only gathered EU and Chinese experts from customs administrations, but also a range of business representatives from transport, logistics and other industries, who had the rare opportunity to discuss concrete business concerns directly with GACC officials during a lively expert panel discussion.

GACC presented its ongoing reform program in detail and updated the business community on trade facilitation pilots in the CSPFTZ, which are intended to reduce trade costs and clearance times. Officials from other agencies like the State Council also attended, given the prominence of trade facilitation in the Customs 2020 Strategy and the legislative changes that will be necessary to implement the WTO Agreement. At the seminar, GACC also announced that, building on its Single Window customs clearance pilot in the CSPFTZ, it will aim to roll out a national Single Window by the end of 2017. The event was well received by all participants and lays the groundwork for more specific technical assistance activities on trade facilitation in 2015.


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TRADE FACILITATION AND CUSTOMS MODERNISATION top

Accurate commodity and tariff classification is critical for customs control and trade facilitation. EUCTP II and the GACC organised the Workshop on Harmonized System Classification (28-20 July 2014) in Shanghai. The activity brought together 30 Chinese customs officials with experts from the European Commission, Swedish Customs and the World Customs Organisation (WCO) to exchange views on how China could implement binding pre-entry classification rulings to increase certainty for traders about the customs treatment of their shipments. As GACC continues preparations to implement its first pre-entry classification ruling and also considers its obligations under the WTO Agreement on Trade Facilitation, the presentations on EU and international good practice and practical implementation advice were seen as a welcome input to GACC’s reform efforts.

Customs laboratories also play an important role in national security, environmental protection, narcotics control and trade policy, particularly the application of tariffs. Accordingly, customs laboratories need to produce consistently high quality results to support customs regulatory and control functions. Operating under good practice governance and quality management systems, in line with international standards, is essential to achieving this outcome. EUCTP II and GACC organised the Study Assignment on Customs Laboratory (15-21 October 2014) in France and the Netherlands to exchange views on how to maintain quality and entrench continuous improvement in the day to day operations of a customs laboratory. The study assignment improved GACC’s workforce capacity on testing and sampling methods, and deepened GACC’s understanding of good practice quality management systems as GACC begins a program to standardise the governance of its laboratories to promote consistency and quality.

EXTERNAL TRADE STATISTICS top
As the production of goods becomes more globalised, policy makers need new tools to measure the value added across complex global value chains (GVC). Given that China is embarking on a new round of reforms to diversify its economy, better tools to estimate Trade in Vale Added (TiVA) will provide crucial data on which to develop new policies. EUCTP II and the General Administration of Customs of China (GACC) organised the Seminar on Estimation of Trade in Value Added(9-10 July 2014) in Beijing which brought together leading international and Chinese trade experts to discuss the latest methodological advances in TiVA research.
The OECD presented its work with the World Trade Organisation to develop country-by-country TiVA indicators and the United States International Trade Commission (ITC) presented breakthrough TiVA research which may provide the most accurate picture yet of a country’s or sector’s participation in GVCs. Research from the Chinese TiVA research taskforce was presented and discussed in detail, providing valuable expert feedback for the taskforce as it seeks to support China’s latest round of economic reforms. GACC is now discussing further research collaboration with the ITC to improve understanding of China’s position in GVCs. EUCTP II is facilitating discussions between OECD and GACC on potential technical assistance activities in 2015.


Experts discuss trade in value added
 
COMPETITION POLICY top

Deepening the understanding for European stakeholders on China’s AML enforcement procedures and practices and continuing to improve transparency and good governance in China’s competition regime by referencing European good practices.

China’s Anti-Monopoly Law has been identified as one of the most important legal contributions to build a fair and competitive market and wider efforts to deepen reform. China’s Anti-Monopoly Enforcement Agencies (AMEAs) have quickly emerged as important actors both for domestic companies and international businesses operating in China, with a rise in AML enforcement actions displaying greater confidence among antitrust regulators. As a result, the application of AML principles and enforcement procedures will have more impact on business conducts by both domestic and foreign firms.

NDRC’s session- Finance Supervision, Enforcement Procedure, International The EU-China competition week has become a flagship activity to provide technical assistance to improve China’s AML development and enforcement capacity under the EU-China Dialogue on Competition Policy between DG COMP and Chinese AMEAs. Each EU-China competition week is jointly designed in line with the priorities identified by the Chinese beneficiaries. To better understand the on-going development of Chinese AMEAs’ enforcement practices and procedures, the 9th EU-China competition week not only discussed investigative techniques in different areas such as merger review and horizontal and vertical agreements, but, to ensure fair competition, also focused on the principles and good practices of how to achieve more transparent and predicable law enforcement.
The EU state aid control framework ensures the functioning of the EU single market and prevents government intervention in the market. This has been gradually recognised by Chinese AMEAs as a valuable reference to China’s provision against the abuse of administrative power in China’s AML. Therefore, a workshop on State Aid Controlwas organised back to back with competition week 9. It was attended by Chinese AMEAs and line ministries under the Anti-Monopoly Commission to further discuss the principles and application procedures of the EU framework on state aid control. NDRC officials also made a presentation on recent law enforcement against local government intervention in the transport sector.
 
FINANCIAL STABILITY POLICY top

Informing central bank officials of the essential steps to take in order to liberalise its capital account; improving China’s central bank financial and accounting information system.

EUCTP II continues providing support to China’s central bank officials in two important reform areas:

  • The liberalisation of capital account was highlighted as a key reform area by China’s government at the 18th Party congress in 2013. Chinese authorities have already taken some steps to gradually liberalise the country’s capital account, such as the establishment of a two-track capital flow regulation structure. At the request of the People's Bank of China’s Monetary Policy II Department – responsible for designing the framework for capital account liberalisation, EUCTP II organised a seminar on capital account convertibility in Dalian and Beijing in October 2014. This informed Central bank officials of the essential steps to move towards capital account liberalisation, drawing on the EU’s experience of establishing a codified capital account liberalisation framework. The challenge for China is to allow the necessary adjustments in the economy to proceed, while at the same time maintaining growth.
Thibault HEUZÉ, Financial Counsellor, EU Delegation to China (second from right) and WANG Dan, Deputy Director General, Monetary Policy Department II, People’s Bank of China (middle)
  • The latest developments in areas of assets and liabilities management, information disclosure and financial strength. Central banks play a pivotal role in stabilising financial markets’ funding conditions – especially in transitioning economies – and thus need to have effective macro-economic and risk management tools. To support China’s reform efforts in this field, EUCTP II organised a study assignment to Eastern Europe and Italy for officials from the accounting department of People's Bank of China to learn from the EU experience on how to strengthen its central bank financial and accounting information system.
Mr. CHEN Zhi, Director General, Accounting and Treasury Department of the PBOC discussing with experts from the Bank of Hungary
OVERALL SERVICES top

Supporting the on-going plurilateral environmental goods agreement negotiations

In July 2014 negotiations to liberalise global trade in environmental goods were launched by the European Union and 13 other members of the WTO, including China. In order to support this development and foster a dialogue between both the European and Chinese sides, EUCTP II organised a roundtable on the liberalisation of environmental goods and services in Beijing on 30 October. The roundtable provided a platform for both sides to discuss important issues such as the impacts and consequences of eliminating tariffs on a wide range of environmental goods before the next round of negotiations.
Q&A session between EU and Chinese Experts, Novotel Beijing
 
INDUSTRY SECTORS top
Following the success of the Medical Devices (MD) Roundtable II in 2012, the CFDA and the DG SANCO agreed to continue strengthening these dialogues through a third medical devices roundtable. The Joint EU-China MD Expert Roundtable III (MDER III) aimed to build upon previous meetings by analysing differences between the European and Chinese MD regulatory frameworks to ultimately minimise barriers, encourage stronger cooperation, and increase mutual understanding of industry issues. In the context of the new Chinese legislation on MD published in 2014 and the latest text of the MDD and IVDD draft text of the EU legislation, the Working
EU-China Medical Devices Expert Roundtable III (MDER III)
Group sconsisting of Chinese and European industry experts analysed the differences between the European and Chinese MD legislation and standards. The experts reviewed the Chinese legislation published on July 30, 2014 and effective on October 1, 2014 - Revised Order No. 650 “Regulation for the Supervision and Administration of Medical Devices”, Order No. 5 “Administrative Measures on the Registration of IVD Reagents”, Order No.6 “Medical devices instruction and label management regulations“ and Order No.7 “Provisions for Supervision of Medical Device Manufacture”. The latest text of the European Union IVD Regulation from September 29, 2012 was used for a comparative study. EUCTP II organised a two-day seminar in Beijing (1-2 September 2014) to present the conclusions and recommendations of the EU-China comparative study on the regulatory regime of MD. The report gives a better understanding to both CFDA and DG SANCO, Chinese and European industry on MD regulations and implementation as well as information on market access rules.
 
ANIMAL HEALTH AND WELFARE top
Enhancing animal disease surveillance to ensure animal origin food safety and international standard compliance:

Chinese MOA officials suggesting policies to incorporate epidemiology in disease control strategies in China EUCTP II implemented two interactive seminars, Impact of Animal and Human Health Control Systems on Animal Origin Food Safety(14-18 July, 2014) and Epidemiology and Risk Analysis Workshop For Chinese Executives (28 -30 July, 2014)to support MOA’s strategic plan for the control of diseases that impact the safety of food of animal origin. Specifically, these activities were organised in cooperation with the Food and Agriculture Organization of the United Nations (FAO) – within MOA’s strategic plan to enhance animal health epidemiology systems in a modern and
sustainable manner. These activities were facilitated by Chinese and European experts to enhance the capacity in animal disease surveillance of 150 professionals and high ranking MOA officials from central and provincial programs responsible for animal diseases control.

The detection of cases of African swine fever (ASF) in wild boars in Lithuania and Poland on January 2014 moved China to restrict pork imports from Poland. The EUCTP II, together with China Animal Health and Epidemiology Center (CAHEC) as well as the reference laboratory for ASF of the World Organization for Animal Health (OIE) and the EU, located in Madrid, Spain, organised a roundtable in Qingdao on 13 October, 2014 - EU standards and regulations to control African Swine fever to continue to provide technical assistance to support the application of international standards to minimise the impact of ASF outbreak on trade.

Experts’ discussion during the roundtable
on African Swine Fever
Participants during the workshop The EUCTP II supports a three-year agreement between the Chinese Ministry of Agriculture (MOA) and the French Agency for Food, Environmental and Occupational Health & Safety (ANSES), signed in 2012, to help the Chinese Animal Health and Epidemiology Center (CAHEC) located in Qingdao, to become a reference laboratory in China with the technical support of ANSES's Animal Health Laboratory located in Maisons-Alfort, France. The Consultation to Harmonize Animal Health Reference Laboratories (October 22-31, 2014) was
part the MOA-ANSES working plan and enhanced the capacity of the Shaanxi animal health laboratories to support the regional disease surveillance programs, improved further CAHEC laboratory's capacity to support China's compliance with international standards and to enforce animal food safety legislation. Additionally, Experts from countries neighbouring the P. R. China gained knew knowledge regarding the role of reference laboratories in the control and surveillance of brucellosis in domestic animals in China and France.
 
FOOD SAFETY top

The Summer Academy in Global Food Law and Policy in Spain
Using risk assessment to support standard developments and to ensure food safety: The EU has one of the highest food safety standards in the world, and a stable risk assessment system has been one of the main pillars to ensure these high standards are maintained. EUCTP II organised a Study assignment on Standards, Food safety and Risk Regulation (21-25 July, 2014) to enhance the capacity of the NHFPC and CFDA in developing and enforcing food safety policies. Chinese delegates participated in the Summer Academy in Global Food Law & Policy in Spain and enhanced their knowledge and skills on international regulations governing food risk.
The workshop Increasing the risk analysis capacity of animal health surveillance systems (21 -25 July, 2014) enhanced the capacity of veterinary epidemiologist in China to assess the risk of animal origin hazards. This activity supported the Field Epidemiology Training Program for Veterinarians (FETPV) from MOA which aims to improve animal origin food safety using risk-based approaches. This five-day interactive workshop was facilitated by two European experts and attended by 25 professionals from 17 provinces throughout China.
Veterinary professionals assessing animal health risks

Participants after completing the BFR summer school on risk assessment in Berlin.
Under the auspices of the MOU between the Chinese Animal Health and Epidemiology Center (CAHEC) and the German Federal Institute for Risk Analysis (BfR), EUCTP II organised a study assignment, Application of models in risk assessment (18-29 August, 2014), to enhance CAHEC’s capacity on risk assessment and to support sustainable cooperation between CAHEC and BfR. The participants enhanced their knowledge and skills on risk assessment and risk communication in food safety and established professional links with the German Federal Research Institute for Animal Health, Friederich Loeffler Institute (FLI).
 
ORGANIC AGRICULTURE AND PLANT HEALTH top
During the four-day seminar, EU Regulations and practices to assess risk in agricultural products (14 -17 October, 2014), Chinese professionals from CAHEC, from BfR and FLI enhanced the capacity of MOA officials representing seventeen provinces of China on risk assessment of animal origin agricultural products. During this activity the FLI and CAHEC signed an MOU to cooperate in the area of risk assessment of animal diseases.


Certificate ceremony after the seminar
 
FOOD SAFETY TRACEABILITY top
Fight counterfeiting in trade of alcoholic beverages and adulteration in food: The EU-China forum on technologies used in food safety and product authentication(22-24 October, 2014) was carried out  within the framework of scientific cooperation in the fields of food, agriculture and biotechnology, which promotes cooperation between EU and Chinese laboratories. The forum is part of the joint effort between the EU and China to fight fraud in food-related products and promote anti-counterfeit measures in the field of wine, spirits, non-alcoholic beverages and food. Experts answering questions during the conference
The three-day activity was attended by 130 professionals representing Chinese and European authorities, industry, academic institutions and diplomatic attaches from EU Member States. Participants gained a specific understanding of the modern and classic technologies that support the authentication of food and alcoholic and non-alcoholic beverages.