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Mystery Meat: President Trump’s Trade Deal, Chicken from China, and Implications for American Consumers

July 29, 2017

On May 11, 2017, the Trump administration announced a new trade deal with Chinese President Xi Jinping. While this deal aims to address the growing trade deficit between the United States and China, it does so by creating greater market access for American firms as opposed to levying steep tariffs on Chinese imports[1].

From this agreement, several key industries stand to benefit due to reductions in China’s barriers to trade. Specifically, China has pledged to lift its ban on American beef products, permit the sale of genetically modified seeds by U.S. firms, remove restrictions on American credit card providers and other electronic payment service providers, allow credit rating agencies to have a presence in China, and increase its importation of liquefied natural gas from the U.S.[2] However, the deal also fast-tracks the exportation of processed chicken products from China to the U.S. which poses a significant concern for American consumers due to the inherent food safety risks and the fact that these products are not likely to be labeled as “Made in China.”

Total Food Imports from China in Billions of Pounds, 2003-2012.Total Food Imports from China in Billions of Pounds, 2003-2012.

In 2004, China first sought to begin exporting poultry products to America. Per U.S. food safety regulations, the Food Safety and Inspection Service (FSIS) of the U.S. Department of Agriculture (USDA) conducted an audit of China’s food safety system for poultry products and determined that their chicken processing facilities were equivalent to those of the U.S. Nevertheless, FSIS found that China’s slaughter system was not equivalent to the American system since carcasses were not adequately inspected. As a result, China would be permitted to export only cooked chicken that had been slaughtered in an approved country and processed in China.[3] For example, China would be able to process chicken raised and slaughtered in Canada into chicken nuggets or soup and then export the finished product to America. Although Congress successfully stalled the importation of these products until 2010 by withholding from USDA the appropriations needed to finalize the regulations, China requested a new round of audits that year which yielded the same approval. This opened the door once again for them to export processed chicken.[4] Under President Trump’s new trade deal, USDA must finalize its rules by July 2017 so that firms may finally begin to import these products to the U.S.

Breakdown of Food Imports from China in 2012 by Type.Breakdown of Food Imports from China in 2012 by Type.

Disconcertingly, this accelerated arrangement places American consumers at risk due to well-known poor food safety standards in China. It has already experienced astonishing food safety scandals such as infant formula laced with melamine that sickened over 300,000 children, cabbage sprayed with formaldehyde as a preservative, and fish injected with a chemical used in temporary dental fillings as a tranquilizer.[5] In fact, in the first nine months of 2016 alone, the Chinese Food and Drug Administration had discovered more than 500,000 instances of food safety violations.[6] These issues are particularly acute for poultry products as evidenced in the chicken jerky dog treats from China which killed 1,140 dogs and sickened an additional 6,200.[7] Equally concerning, China has suffered from numerous outbreaks of the avian influenza since 2013 which has caused 1,347 human illnesses, some deaths and further demonstrates the need to improve food safety.[8]

Although FSIS has declared Chinese poultry processing plants equivalent to those in the U.S., this finding is far from comforting. At a 2014 hearing before the Congressional-Executive Commission on China, FSIS admitted they relied primarily on documentation provided by the Chinese government to ensure its regulations are equivalent to those in America. They will merely rely on certificates from China to determine the chicken was slaughtered in an approved country and was processed in an inspected facility. As Congressman Chris Smith (NJ-04) noted, China has a history of providing documentation that is “every time, laced [with] misinformation and lies and deceit”.[9] Smith further observed that since China remains a dictatorship, there are few protections for journalists or factory workers to blow the whistle if documents are forged.[10] Consequently, FSIS should not be confident that China’s food safety system is comparable, the chicken was indeed slaughtered in an approved country, or the final product was processed in one of the four inspected facilities. While FSIS does have the capacity to conduct on-site inspections, they admitted at the hearing that they must provide a 60 days-notice.[11] In this time, the factory could temporarily correct any violations or create a “shadow factory” to deceive American inspectors.

These issues are particularly acute since existing U.S. country of origin labeling (COOL) laws are not likely to cover the processed chicken imported from China. Currently, the Agricultural Marketing Service of USDA mandates COOL for poultry products, but these regulations only apply to muscle cuts or ground chicken which will not be imported from China in the near future.[12] The processed chicken may still be subject to labeling requirements from U.S. Customs and Border Protection (CBP). However, CBP exempts all imports that undergo substantial transformation within the U.S. which is broadly defined as “a change in name, character, or use”.[13] Therefore, if the chicken imported from China is combined with another food item, further processed, or even repackaged within the U.S., it may not be subject to COOL requirements. Consequently, businesses may use this broad definition of substantial transformation to obscure the origin of chicken processed in China and hinder consumers who wish to avoid these potentially harmful foods.

While President Trump’s new deal with China advances trade objectives and confers advantages on certain sectors of the American economy, it creates an undeniable risk to consumers. Although FSIS has concluded that China’s poultry processing facilities are comparable to American facilities, the support for this designation does not provide any reassurance that the chicken imported will indeed be safe for consumption. Even worse, loopholes in existing COOL laws will prevent consumers from determining if their chicken was processed in China and thus impede their fundamental right to know. As a result, this trade deal brings the notion of “mystery meat” to a troubling new level.

Student Blog Disclaimer
  • The views expressed on the Student Blog are the author’s opinions and don’t necessarily represent the Penn Wharton Public Policy Initiative’s strategies, recommendations, or opinions.

 

References

  [1] S.K., “What might a trade war between America and China look like?,” The Economist, February 5, 2017, http://www.economist.com/blogs/economist-explains/2017/02/economist-explains-2.

  [2] Eunice Yoon, “Here’s who wins with the new US-China trade deals,” CNBC, May 12, 2017, http://www.cnbc.com/2017/05/12/heres-who-wins-with-the-new-us-china-trade-deals.html.

  [3] Joel L. Green, Chicken Imports from China, (CRS Report No. IF10148) (Washington, DC: Congressional Research Service, 2015), 1-2.

  [4]. Ibid.

  [5]. U.S. Congressional-Executive Commission on China, Pet Treats and Processed Chicken from China: Concerns for American Consumers and Pets, 113th Cong, 2nd session, 2014, 51-53 (testimony by Patty Lovera, Assistant Director of Food & Water Watch), https://www.gpo.gov/fdsys/pkg/CHRG-113hhrg88496/pdf/CHRG-113hhrg88496.pdf.

  [6].Maria Godoy, “Chinese Chicken Is Headed To America, But It’s Really All About The Beef,” NPR, May 12, 2017, http://www.npr.org/sections/thesalt/2017/05/12/528139468/chinese-chicken-is-headed-to-america-but-its-really-all-about-beef.

  [7]. “Jerky Pet Treats,” U.S. Food and Drug Administration, March 3, 2017, https://www.fda.gov/animalveterinary/safetyhealth/productsafetyinformation/ucm360951.htm.

  [8]. Wenorah Hauter, “Food Safety Advocates Denounce Expanding Trade with China,” Food & Water Watch, May 12, 2017, https://www.foodandwaterwatch.org/news/food-safety-advocates-denounce-expanding-trade-china.

  [9]. U.S. Congressional-Executive Commission on China, Pet Treats, 15 (testimony by Daniel Engeljohn, Assistant Administrator, Office of Field Operations, Food Safety and Inspection Service).

  [10]. Ibid., 16.

  [11]. Ibid.

  [12]. Ibid., 10.

  [13].Ibid., 33 (testimony by Christopher D’Urso, Student and Consumer Advocate).

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