ISRI highlights concerns with China scrap policy
The Institute of Scrap Recycling Industries (ISRI) called out China's alleged lack of transparency and receptiveness to dialogue on its scrap metal import policy in comments to the US Trade Representative (USTR).
The Washington-based trade group highlighted its concerns in a letter yesterday to the Trade Policy Staff Committee for the USTR, which publishes an annual report on China's compliance with its World Trade Organization (WTO) commitments.
Ambiguity around China's multi-phased roll out of its scrap import policy over the last three years, as well as the Chinese government's failure to notify the WTO on more than just its first round of import bans were among the trade group's major concerns.
China first officially notified the WTO of its intent to adopt wide sweeping environmental protection control standards for a certain number of waste items in late November 2017, when it notified the intergovernmental agency that it would adopt impurity thresholds on the imports of ferrous and nonferrous scrap.
But since this initial notice, ISRI said that the Chinese government has failed to notify the WTO of its evolving policies regarding scrap imports, which has impacted global trade.
"Subsequent rounds of import bans, overly-strict product standards, challenging licensing requirements and non-transparent quota issuances were not notified," said Adina Adler, IRSI's vice president of advocacy, in the letter.
The lack of transparency on its import policy has led to uncertainty throughout the industry and resulted in a precipitous drop in US scrap exports to China.
Chinese scrap imports have fallen sharply since 1 March 2018, after the country implemented the impurity thresholds of which it notified the WHO.
Imports were further hampered after the nation introduced a policy in July 2019 that required all scrap metal importers in China to get import licenses and regulated scrap import volumes of high-grade aluminum, brass and copper scrap with approved quarterly quotas.
The Chinese government's uneven rollout of the policy has sown uncertainties about future trade and exports to the nation, according to ISRI.
China implemented license and quota requirements last year as part of a broader recategorization policy initiative of high-grade copper, brass and aluminum as raw material with no import restrictions.
But ISRI noted that the quality standards and compliance requirements are not in line with recognized industry standards, are too restrictive and that the Chinese government has not notified the WTO.
"The [Chinese] Government has not notified these standards to the WTO and have not provided transparency as to their development nor timeline for implementation, causing additional confusion for exporters," ISRI said.
Separately, ferrous scrap which was not included in the government's initial recategorization policy was approved to be renamed as recycling steel material in March this year.
These new scrap import standards were set to come into force on 1 July, but the government has not yet released key details on the final policy.
Again, ISRI cited widespread market confusion over the lack of transparency in the government's implementation of it new solid waste plan, which forced shipping lines to make their own interpretations of the law and resulted in major shipping lines halting transportation of scrap commodities to China with a scheduled departure date effective 1 September.
Despite its repeated attempts at communicating with the government agencies on the policies, ISRI noted that its outreach efforts were ignored.
"We have not found the Chinese Government to be receptive to dialogue on these measures, as we are sure members of the Trade Policy Staff Committee have encountered," Adler said.
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