Chinese Law on Foods and Medicines

Abstract

1.1 Global Agreements and Standards China joined the WTO in 20011. If we look at foodstuffs and medicines from a consumer viewpoint, the most important WTO agreements are the Technical Barriers to Trade Agreement (TBT Agreement) and the Agreement on Sanitary and Phytosanitary Measures (SPS Agreement). The TBT Agreement covers all mandatory and voluntary technical regulations and standards, including testing and certification procedures. The aim of the agreement is that these technical measures do not create unnecessary obstacles to trade.2 The SPS Agreement defines the rights and obligations of members with respect to application of sanitary and phytosanitary measures. This means laws and standards on food safety, animal health and plant health. Basically, the SPS agreement defines how food is to be regulated in order to maintain TBT agreement goals3. The TBT agreement also applies to medicines4. Disputes arise when trade restrictions are justified by somewhat ambiguous goals such as human health. The most famous food disputes resolved by the WTO Dispute Settlement Body are the ‘hormones in beef case’5 of 1998 and the ‘sardine case’6 of 2002. EC banning beef hormones was not justified according to the SPS agreement, because it was not based on Codex Alimentarius Standards. EC restricting the use of the term ‘sardine’ was not justified according to the TBT agreement, because the restrictions were not based on the Codex.7. Here we see the connection between Codex standards and WTO disputes: Codex rules are specifically referred to in the TBT Agreement8 and the SPS Agreement9, and are therefore used as a reference in trade disputes at the WTO.10 Codex Alimentarius is an international organization governing foodstuffs and operating under United Nations organizations FAO11 and WHO12. China is a member. Codex documents are global food law13: Codex Alimentarius pursues to protect the health of consumers and to promote fair international food trade.14 The Codex Alimentarius Commission is the highest decision-making body, where the representatives of the approximately 18015 member states meet every year. The Codex Alimentarius Commission is the most important global actor drafting food standards. Codex documents are in the forms of standards, codes of practice, guidelines, principles, recommendations, etc. Standards often relate to product features and can be very precise, setting for example MRLs (maximum residue levels) for pesticides or medicinal substances in foods. There is for example a standard for canned baby food and a standard for frozen spinach. Codes of practice guide procedure as regards production, preparation, transport and storage, including HACCP16 systems. Guidelines exist for example on nutrition and health claims17. Principles are more general and relate for example to import and export certificates. The division between different document types is not important as none of the Codex documents are directly binding on food industry operators. All of the above-mentioned document types are listed under ‘standards’ on the Codex web page18. It is important for China to defend their interests in Codex, particularly as a member of the WTO. The role of the Codex Commission is to provide a political forum to debate issues. The role of WTO Dispute Settlement Body is to ultimately resolve issues that cannot be agreed upon. As regards to China, the absence of WTO disputes against China is seen as a sign of China’s reasonably effective implementation of the WTO rules19. The worst possible scenario is that China would disrupt the whole WTO process that is based on consensus20. Trade partners expect China to comply with the spirit of the WTO agreements and to develop into a “more responsible member of the international community”21. Foreign businesses expected to benefit from a more transparent and predictable business environment in China22. According to the US-China Business Council in 2008, China has gone a long way in fulfilling its WTO obligations, but there are still problems related to the principle of national treatment in particular. This means that foreign companies experience adverse treatment compared to Chinese companies. Discrimination comes in the form of stricter regulations and their enforcement. In addition, application procedures and license approval procedures are more stringent, time consuming or costly for foreign companies, foreigners are excluded from standards setting processes, and there is bias towards domestic goods in government procurement.23 According to Peerenboom, some of the areas listed by foreign investors are actually required of China by the WTO, while others are just wishful thinking seeking to further foreign interests24. Besides factors related to the Chinese legal culture, employment and income levels of the Chinese people will determine whether China will fulfil its WTO obligations25. The TBT Agreement recommends the recourse to international standards wherever possible while drafting technical regulations. Besides Codex standards, ISO/IEC26 standards are particularly referred to in the TBT Agreement27. ISO is the International Organisation for Standardisation, and has published several standards related to the food industry. ISO is a nongovernmental organization “forming a bridge between the public and private sectors”. ISO is a network of the national standards institutes of its 157 member countries. Many of the member institutes are part of the governmental structure of their countries, while others have been set up by national partnerships of industry associations.28 Legal description of the ISO standards is difficult. They are not agreements between states as with Codex standards, and they are not selfregulation as governments are involved. They are followed voluntarily, although abiding by a standard might be required in practice. In any case, ISO standards can be defined as soft law. On medicines, the WHO is involved in developing international medicinal products law. They develop international norms, standards and guidelines, and provide guidance, technical assistance and training to support countries in adopting these standards on medicinal products.29 The WHO also organizes international conferences of drug regulatory authorities, where medicinal products law is discussed. The outcome of these meetings are “Recommendations”, in which various areas of medicinal products law are discussed. They are in the form “member states should…”i.e. adoption is not mandatory. In 2006, it was agreed for example that member states should support clinical studies of herbal medicines30, and seek efficient sanctions for false drug advertising, particularly internet advertising31. China is involved in the WHO discussions and drafting the recommendations on medicinal products law. China also works bilaterally on issues of medicine law. For example between China and the EU, the agreement on a “Consultation and Cooperation Mechanism” was signed in 2008. In 2009, the Chinese SFDA32 met with the Director General Enterprise of the EC in the first annual high-level working conference under the “mechanism”.33