The Zika virus belongs to the Flaviviridae family and Flavivirus family. Spread by the Aedes mosquito, this virus was first isolated in the Zika forest of Uganda in 1947. From 1950 to 2006, it was restricted to a narrow equatorial belt. The virus is associated with birth defects and pregnant women are particularly vulnerable to it.
In 2006 the Zika virus became a pandemic which affected a number of South American countries, notably Brazil which was hosting the Rio 2016 Olympics and consequently faced a barrage of withdrawals from athletes who considered it a serious health risk. Zika has now moved to Asian countries.
Inevitably it affects international trade particularly in shipping where every care must be taken to ensure that the virus is not transported either by freight or through the human agents that work in the shipping trade. China has been taking steps to protect itself whilst minimizing the risk to its lucrative trade, particularly with the USA.
China’s new mandate on the fumigation of US cargo
The Chinese government has ruled that all US cargo entering the country has to be fumigated according to strict standards that are set by the shipping regulators. Understandably this measure has not been well received by US officials and businesses since it places an additional burden on them to ensure that their products are fit for export according to Chinese standards. Indeed there have been instances of US goods being turned away from Chinese ports due to non-compliance.
Amongst the requirements is the need to present a valid and current mosquito eradication certificate. The problem is that such directives do not account for the ambiguities in defining what a valid certificate is and the categories of goods that it applies to.
In response, US companies have started issuing warnings to their customers and partners of a real possibility that goods shipped to China may be turned away; at considerable expense to the shipper. Others question whether this is not yet another sign that China is creating non-tariff trade barriers to the US given the fact that there have been no reported incidents of the Zika virus in China up to date.
However, the Chinese officials insist that they are only being vigilant in light of the fact that they have a large vulnerable population whose infection would cause the pandemic to escalate to hitherto unknown proportions.
Details of China’s new rules
The underlying principles of the new policy is that there must be competition and cooperation in a safe environment. Therefore the Chinese official agency in charge of imports and shipping has issued a report by way of a series of directives.
First of all, it is expected that all port authorities within the jurisdiction of China will adopt an anti-mosquito blanket policy. This policy takes place with immediate effect. That means that the port authorities must eliminate all mosquito breeding sites while simultaneously reducing the amount of mosquitoes that are within the port area.
To that end, the port officials are required to strengthen the level and frequency of health supervision. This instruction is deemed necessary by the Chinese authorities in order to stop the spread of not only the Zika virus but also any other contagious infections. From the Chinese perspective, this is a necessary precaution regardless of the impact that it has on the wider trade or diplomatic relations with other countries.
How this mandate is affecting exporters
There has been disquiet about the new policy in as much as it places additional burdens on all those companies that ship containerized goods to China. US-based exporters have been particularly vocal about the possibility of unsustainable costs of doing business. Another potential problem is the logistical nightmare that confronts the importer or exporter as they go through the bureaucratic processes that are demanded by China.
Various trade groups have joined the fray raising the scepter of possible downturns in trade flows as a direct consequence of the new measures. A case in point is the Agriculture Transportation Coalition which has sent notices out to members to the effect that they should anticipate logistical and financial challenges due to the new policy.
The Mosquito Eradication Certificate is considered to be an onerous requirement, particularly when dealing with perishable agricultural goods. There is a real possibility of being quarantined which leads to even more costs due to the compulsory fumigation process. At the moment it is not clear that the fumigation facility will be able to handle the increased volumes due to bureaucracy-induced backlogs. Shipping companies have sent out notices to their partners and customers so that they can be compliant with the specific requirements that have been put in place by China.
The Chinese Entry-Exit Inspection and Quarantine Bureau maintains a list of countries which have to undergo such checks and there is worry that the list could be expanded. After all, the USA was considered a safe country in terms of the Zika virus threat but was soon added to the list with significant consequences for all those concerned.
US officials admit that Florida has a problem with the Zika virus but the rest of the country is not considered to be an at-risk jurisdiction. The people who are doing the fumigation also face a dilemma because the chemicals required have not been specified. There are some instances where the importer or exporter does not even know who is supposed to issue them with a certificate.
UPDATE: US – China cargo rules due to the Zika Virus
Chinese regulators have removed the mandate that all containers arriving in China from the United States must be treated with special rules to prevent the spread of the Zika virus. Instead of applying to the entire US, the mandate will only apply to shipments leaving the state of Florida, which is the state that has been affected by Zika the most. Containers leaving Florida that are bound for China must be disinsected with approved pest management techniques such as air curtains, trapping, chemicals, or other methods.
This is good news for US shippers (outside of FL) who were concerned about the potential increase in costs and delays due to the original mandate. China based its decision on research which showed a low Zika transmission risk through cargo shipments. However, if China Inspection and Quarantine (CIQ) officials find any infected cases, larva, eggs, or mosquitoes, the ship and its cargo are subject to the full Zika treatment requirements.
Next steps for the US and China
At this point, US companies have no option but to comply with the Chinese government requirements. Resistance will only make the Chinese more reluctant to give in. However, there are possibilities for diplomatic overtures to try and reassure the Chinese government. On the other side of the coin, the Chinese authorities have to set clear ground rules that target specific risk areas rather than employing a blanket ban.
