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As revealed by the MOFCOM notice released on Jan 16th, 2020, China's Vice Premier Minister Liu He signed the phase one trade agreement with U.S. President Trump on Jan 15th. The agreement has nine chapters covering intellectual property, trade in food and agricultural products, microeconomic policies, etc. President Xi remarked it an agreement that will benefit China, the U.S., and the whole world.
Take the food and agricultural product chapter as an example. This chapter covers products highly demanded in China, such as dairy products, meat, aquaculture products, rice, fruit, feed, and pet food. Vice Premier Liu went on to outline how China's main drivers of economic development are currently changing and how China's new focus was on high-quality products.
INCREDIBLE BENEFITS to U.S. Dairy and Infant Formula Manufacturers
Dairy Product
1. Easier Market Access
As of the implementation of this Agreement, China shall allow the importation of the following U.S. dairy products:
manufactured at a facility on a list compiled by the FDA; and
accompanied by an Agricultural Marketing Service (AMS) dairy sanitary certificate
2. Onsite Inspection of GAC manufacturer registration (former CNCA registration) is not a must due to the recognition of U.S. dairy-safety system
According to this Agreement, China will recognize the U.S. dairy-safety system as providing an equivalent level of protection as China's dairy-safety system. Each time the U.S. provides China with an updated list of dairy facilities and products, within 20 working days of receipt of the list, China shall:
register the facilities and publish the list of facilities and products on the GAC website; and
allow U.S. dairy imports into China from those facilities;
3. Loosen policies for products which are new to China
China shall allow the importation of
U.S. bovine, ovine, and caprine dairy products when accompanied by an AMS dairy sanitary certificate;
U.S. extended shelf life (ESL) milk, which can be sold as pasteurized milk in China
U.S. fortified milk
a) subject to China's National Food Safety Standard — Modified Milk (GB25191);
b) allow such product to be labeled and sold to consumers as "pasteurized modified milk" provided the product is pasteurized;
U.S. ultrafiltered fluid milk
a) subject to China's National Food Safety Standard — Modified Milk (GB25191) and
b) such products should be labeled with "ultrafiltration technology."
c) allow such product to be labeled and sold to consumers as "pasteurized modified milk" provided the product is pasteurized;
U.S. dairy permeate powder
Within 60 working days of the date of entry into force of this Agreement, complete the approval process for U.S. dairy permeate powder for human consumption consistent with relevant requirements and allow the importation
The exemptions offered to these new dairy products will only be extended to U.S. products. In the long term, after these products enter China, it will likely accelerate the formulation of relevant national dairy standards in the future.
Infant Formula
1. The registration of U.S. infant formula recipes will be approved within 105 working days
As revealed by this Agreement, China shall
Complete the technical review of the infant formula recipes within 45 working days of the receipt of registration applications. The technical review here refers to the document review.
Finish other necessary inspections, review, sampling or testing within 40 working days after the technical review
Complete the recipe registration within 20 working days after the two steps above
China will complete the recipe registration in 105 working days for U.S. infant formula products. Until today, the U.S. only had six approved infant formula recipes and 7 for infant formula manufacturers.
2. Onsite inspection for recipe approval is not a must
The Agreement reveals that the onsite inspection will no longer be a pre-requisite to register a dairy or infant formula facility. At the same time, China still has the right to audit the U.S. dairy and infant formula food safety regulatory system, including dairy and infant formula facilities. If China wants to undertake an audit, a notification shall be released to FDA and involved facilities at least 20 working days in advance.
3. Faster manufacturer registration approval
Each time the United States provides China with an updated list of the approved infant formula facilities under the jurisdiction of the FDA, China shall register the facilities and publish the list on the GAC website within 20 working days of receipt of the list.
Besides, within one week of the implementation of this Agreement, China shall pass the manufacturer registration of those U.S. infant formula facilities whose infant formula recipes have been approved in China and update the information of these manufacturers on the GAC website.
Effective Date
As revealed by the Article 8.2, this Agreement shall enter into force within 30 days of the signature by both Parties or on the date both Parties have notified each other in writing of the completion of their respective applicable domestic procedures, whichever is sooner.
While it is also said, "Either Party may terminate this Agreement by providing written notice of termination to the other Party. The termination shall take effect 60 days after the date on which a Party has provided that written notice to the other Party, or on any other date the Parties may decide."
CL interpretation:
This Agreement is a huge good opportunity for U.S. enterprises to work in the dairy and infant formula market in China. It will also be a good opportunity for multinationals to establish U.S. factories.
Click here for the full English Version about other products and chapters.
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