ISRI expresses concerns about China’s scrap import policy

The Institute of Scrap Recycling Industries (ISRI), Washington, has submitted comments to the Office of the U.S. Trade Representative (USTR) to be included in the annual report assessing China’s compliance with its World Trade Organization (WTO) obligations.

The association says it appreciates the USTR’s comprehensive overviews of the major trade barriers affecting the recycling industry in the annual report. However, the comments ISRI submitted this week express its concern that China has failed to notify the WTO of rounds of import bans, its “overly strict” product standards, challenging licensing requirements and “nontransparent” quota issuances.

In its letter to the USTR, ISRI says, “China has been phasing in prohibitions and nontariff restrictions on imports of scrap materials since 2018 (which the Chinese government inexpertly lumps in with other nonvalue waste streams and ambiguously refers to all of it as “solid waste”). The first set of prohibitions implemented in early 2018 had been notified to the WTO, but subsequent rounds of import bans, overly strict product standards, challenging licensing requirements and nontransparent quota issuances were not notified. Furthermore, it is our general understanding that the Chinese Government intends to ban all ‘solid waste’ by 2021, but there has been no transparency on such a policy, leading to great uncertainty in the marketplace.”

ISRI’s comments say that “there has been general talk in the marketplace” since 2017 that the Chinese government could implement “a blanket import ban on all ‘solid waste’ (including scrap commodities) by 2021.” ISRI adds, “However, no official law or regulation has been developed, discussed or implemented to fulfill this intention, and instead, we have seen nontariff barriers applied to imports of scrap commodities that have impacted trade in scrap commodities with China.”

The association continues, “Recognizing that Chinese manufacturers are still in great need of these materials, the Chinese government announced in early 2020 the intent to implement a new set of standards on imports of aluminum, brass and copper ‘recycled raw materials.’ What makes these standards distinct from the overly strict standards on ‘solid waste’ and scrap that were implemented in 2018 is that material entering the Chinese market under the new ‘recycled raw materials’ standards would be in a form that is immediately ready for the smelter. This is the first major indication – after many years of advocacy by ISRI and our members – that the Chinese government understands that scrap is not waste but valuable raw material inputs for manufacturing.”

ISRI indicates it supports “the use of the WTO Compliance report as an avenue to keep legislators and the public informed of the health of U.S. industries impacted by Chinese Government trade policy actions.”

The full text of ISRI’s comments can be found here.