The outbreak of COVID-19 in early 2020 led many countries to implement import restriction policies, which affected China’s export trade. Countries that implemented such policies saw declines in imports of live animals and animal products from China after policy implementation. These import restrictions increased operating costs for Chinese exporters, forcing them to adjust markets and find new trade partners. According to international business law, these import restrictions may violate WTO regulations, and Chinese companies can sue to protect their rights and interests. The signing of RCEP helps reduce trade barriers within the region and safeguard the export interests of Chinese companies.
Import restrictions reduced China’s exports of live animals and animal products
According to empirical research results, the implementation of import restriction policies by countries like Turkey and the Philippines directly led to significant declines in their imports of live animals and animal products from China, with reductions of 14,854,000 USD and 14,889,000 USD respectively after excluding the impact of the epidemic itself. The import restrictions forced Chinese exporters of these products to reduce exports or find alternative export destinations, increasing their operating costs.
Increased costs for Chinese exporters to find new markets
The import restrictions essentially blocked Chinese exporters from accessing the restricted markets. To make up for the lost business, they had to search for and develop relationships with new partners in other countries, revise contracts, adjust transportation routes, go through customs clearance again, and rebuild local distribution channels. All of these adjustments result in higher costs and reduced profits.
Legal basis to fight import restrictions
According to WTO regulations, import restrictions implemented in response to public health events should be necessary, temporary, and non-discriminatory. If the restrictions exceed reasonable scopes or time periods, disproportionately affect certain countries, or become trade barriers in disguise, they can be challenged through WTO dispute settlement mechanisms. Chinese exporters can also directly file lawsuits in the country implementing restrictions to defend their rights.
RCEP consolidated regional trade relations
The signing of the Regional Comprehensive Economic Partnership (RCEP) agreement in 2020 consolidated trade ties between China and other Asian countries. RCEP aims to progressively reduce intra-regional tariffs and non-tariff barriers. This helps decrease policy uncertainties and risks for Chinese exporters looking to develop alternative overseas markets after facing import restrictions. The freer regional trade environment provides more options for them to redirect exports.
In summary, the import restrictions on live animals and animal products implemented by various countries during the COVID-19 pandemic in 2020 increased the operating costs for affected Chinese exporters. However, international business laws and regional free trade agreements like RCEP provide bases for Chinese companies to fight unreasonable restrictions and develop alternative export markets.