Chinese Honey not Dumped but adversely affects Industry

[Grandma_DOG]

Quick Summary - Chinese honey was found to be not dumped, but was causing 'material injury to an industry in the United States'.

I've heard it dozens of times "Dumped Chinese Honey" and went to the root of the report.  I've pulled the US International Trade Commission report of 2007 that reviews the existing tariff on Chinese and Argentine Honey.  I just want US Beekeepers to understand the political landscape this caused, and the artificial honey prices they are enjoying.

What the US ITC is:
"The mission of the Commission is to (1) administer U.S. trade remedy laws within its mandate in a fair and objective manner; (2) provide the President, USTR, and Congress with independent analysis, information, and support on matters of tariffs, international trade, and U.S. competitiveness; and (3) maintain the Harmonized Tariff Schedule of the United States (HTS)."

I interpret this Commission to be a non-independent, fact finding commission that is subject to political influences from Congress.

The 2007 report itself is 92 pages and remarkably easy to read considering. Found at:
http://www.usitc.gov/publications/701_731/pub3929.pdf

And the 2009 report is http://www.usitc.gov/publications/701_731/pub3369.pdf

The American Honey Producers Assc. and the Sioux Honey Assc. filed the original complaint in 2000. On the initial investigation half the board found China was dumping, half found they weren't. (See footnote 3)

'Anti-dumping duty order' is what is needed to impose a tariff, if I understand the process. It does not mean the item was dumped.

'Dumping' is a nebulous word. I believe the public thinks 'dumping' means selling for less then you make it for, which of course make little economic sense. In this case, there was a 1995 US-Chinese agreement of selling above a pre-determined reference price point. Specifically:

"It also provided that these imports had to be sold at a reference price, which was 92
percent of the average of the honey unit import values for all other countries during a specified six-month
period."

If I interpret all this in context, the US honey packers could not compete with its two largest competitors and successfully lobbied for a tariff.  They only targeted the two largest competitors to the US.  If I extrapolate, if that tariff ever comes down, they have done little to make themselves competitive again.

As a good economist, I interpret that the current honey price is artificial, thus not reflective of the true free market price in an open world economy.

No other country has leveled a protectionist tariff on Chinese honey. The EU did temporarily ban it on a quality issue. The US tariff is $2.63/kg on Chinese honey.

And to head off the other side of the coin, Chinese honey quality is not at issue here. That is a different item. This post is about protectionism policy. Also, I am just the messenger. Don't get mad at me.

[AllenF]

First it was poisoned pet food.

Then came the warnings that imported seafood was unfit for human consumption.

Then it was recalls of toys, fireworks, electrical products and much more.

Now China is under fire for shipping to the U.S. honey tainted with a potentially life-threatening antibiotic as well as adulterating exports with sugar.

"Almost 70 percent of the honey consumed in our country is imported – most of it from China," says Conrad. "Unfortunately, China has a long track record of importing adulterated honey and engaging in other fraudulent conduct in the honey trade. These actions not only hurt honey producers in North Dakota and across the country, they also present needless health risks to our consumers."

In a bipartisan letter signed by 15 senators, Conrad urged the FDA to act on a petition for a standard of identity for honey. Such a regulation would provide a uniform, legal definition of honey purity levels that would aid regulators. Imported honey is an ingredient found in a wide array of products including cereals, snacks, meats and beverages and is also a common ingredient in many health and beauty products.

In 2002 and 2003, the FDA and U.S. Customs seized multiple shipments of Chinese honey at U.S. ports which were contaminated with chloramphenicol, an antibiotic that is banned in food products in the U.S. because of its potentially life threatening effects.

More recently, there are reports that imported honey is being blended with sugars or being labeled as a blend to avoid U.S. duties. This honey is subsequently sold to U.S. processors as pure honey.

Read more: Chinese honey now reported among import dangers http://www.wnd.com/?pageId=42270#ixzz1B8wuNKpC
Copied from http://www.wnd.com/news/article.asp?ARTICLE_ID=56372

But I agree that they do produce honey or what they call honey at such a low price, American honey producers can not compete.

And don't forget just over 300,000 Chinese children died from melamine-tainted powdered milk. Melamine was also found in chicken feed...ergo, in the chickens as well and Obama lifted the chicken ban from China.

We don't need to bring up poison toothpaste and bad sheetrock from China.

[WPG]

They got Al Capone for tax evasion, not for all of the other crimes he committed. But they got him.

Chinese honey is bad from any point of view.
We need to stop it however we can.
They can afford to shove out cheap honey because of all of the other stuff our companies have them make and sell here.
They are rolling in dough.

Your grandkids better learn to speak Chinese.

[Acebird]

You can consume a little bit of poison and it is not deemed harmful to humans.  Isn't that the logic?  It is not about dumping it is about quality, and fraud.  The solution is to find out who is using these products and putting them in the foods that we eat either as additives or straight from the bottle.  Once you know who is doing it broad cast the bad news in any way shape or form that we can.
Destroy the demand for cheap honey or something called "honey" that really isn't.

[Grandma_DOG]

Folks, let us stay on track on the tariff side of this equation. 

Issues of Chinese honey quality should be put in a different post. That is entirely separate issue, considered by a different government agency than the US ITC.

The interesting point of this post was that the US honey industry can't compete on a global free market economy. It needs protectionist umbrellas to compete. Part of that is commoditization of honey. Honey packers have let the public believe that honey is honey is honey.  We failed to create a strong need for "Local honey", or "Honey for Alergies", or other honey products that are different than the mere commodity of 'honey'.

Another part of this, is that honey production is a labor intensive process, and American labor cost is high.

[buzzbee]

Do not forget that a lot of honey is imported because not enough is produced domestically to meet demand.

[Acebird]

Another part of this, is that honey production is a labor intensive process, and American labor cost is high.

American labor costs for any large scale agriculture is predominately illegal aliens.  It slowly is becoming the predominate work force for the construction industry also.  The global free market economy has never been equal so when you speak of competition you must first solve the inequality of the trade laws.  Oh, but that is another political snafu.

[WPG]

There is no 'Global free market economy'.
It is what ever the large multi-national companies want to do and what laws in whatever country they can get changed to suit them.

They don't care about the individual consumer or small producer.
Some laws still do protect the individual from the greedy b......s.

One of the few things government is actually supposed to do.



I am filling and creating a demand for 'Local' and 'pure' and 'unprocessed' and 'American' honey and hive products.
I have done better each year and see no reason for it not to continue to increase. If I can keep the bees alive.

[hardwood]

There is honey packer close to me the says some 90% of Florida honey is shipped overseas to the middle east (where honey standards are very strict) and the EU who also tests all honey imports.

It seems that the cheaper honey (I'll not single out China here) can't make the grade.

Scott

[rdy-b]

http://www.downtoearth.org.in/node/1953      RDY-B

http://www.americanhoneyproducers.org/Articles/PhippsSpeechJan2010.pdf

[rdy-b]

In September 2000, several US honey producers filed an unfair trade case alleging dumping of honey imports from China. In May 2001, the US commerce department issued a notice of preliminary determination which required US customs to collect anti-dumping duties on imports of natural bees honey from certain Chinese companies. The duty rates increased between 34 and 184 per cent.

http://www.foodnavigator.com/Legislation/Dumping-investigation-reveals-contaminated-honey
RDY-B

[Rosalind]

Issues of Chinese honey quality should be put in a different post. That is entirely separate issue, considered by a different government agency than the US ITC.

Why?

Imagine I have a jar of yellow liquid of shady origin, and I label it "100% pure American honey," and ship it overseas for $0.25/lb. Upon further inspection this yellow liquid turns out to be, oh, let's just say it's some other yellow liquid that comes out of animals, and so the import is initially rejected as mislabeling/adulteration. After some diplomatic intervention and shouting, it is agreed that I may sell this yellow liquid if anyone wishes to voluntarily purchase it, labeled "honey," but there will be a Stupidity Tax levied on the product. I agree to these terms with an ill grace, and to improve the appeal of the product, I mix it with powdered Girl Scout Cookies and heroin. This product is then sold in stores where little actual food is ever sold and pretty much everything that is sold as food, tastes like HFCS mixed with Crisco anyways, so my "honey" doesn't cause much comment.

Vendors of genuine honey, from a bee, are appalled and levy accusations of dumping, due to the long and sordid history that RosalindCorp has of selling similarly faulty products.

If China wishes to label a Tata Motors Indica "Mersaydees C300," and announces to the US that they'd like to open a new "Mersaydees" dealership here, selling C-class cars for the low, low price of $3000, does Mercedes-Benz not have a right to complain about a lot more than simple trademark violations?

I agree w/ you that there is something to be said for the European protectionism of particular products (Parma ham, Champagne, Stilton cheese), but the bar has been set very, very high for those products--it would be difficult to make the case now, in modern times, for any particular honey producer that they have a culturally distinct product worthy of PDO status.

[Acebird]

Why?

Yeah, we all want to know that.

I take particular offence that Americans cannot compete.  Not all Americans, just the few in the driver seats who can manipulate the laws to their advantage at the costs of everyone else.

You got it right Rosiland.

[Grandma_DOG]

The honey industry has some hard truths it will have to cope with.  First, beekeepers in China export some darn fine honey. High quality honey and sell PROFITABLY it at low wholesale prices. This honey doesn't make the news.  Only the small percent of honey that is bad makes the news. Beekeepers would love to think that all Chinese honey is horribly tainted and will cause children to grow two heads. This is not the case.

China, like the US has some bad apples. Bad packers doing bad things make the news.  The FDA was set up to stop fraudulent quality claims of foods and drugs. The US honey market a century or two ago was rife with sugar water adulterated honey. Packers were mostly the ones to blame. People began to only trust comb honey.

When the Chinese packers begin, and they will, to Quality Control (QC) their exports they will be a force to be reckoned with in the American and European market.  I can make the analogy fairly well with Japan after WW2. They only made cheap junk knock offs of US goods. But over time they got their QC down and began competing with equivalent quality, then finally surpassing US quality.  China is going down that path, and the US honey industry had better have a plan - create value added honey products and de-commoditize honey in order make it special and unsubstitutable.

Or they can hide behind the skirts of US tariffs for as many decades as possible.

[rdy-b]

When the Chinese packers begin, and they will, to Quality Control (QC) their exports they will be a force to be reckoned with in the American and European market.  I can make the analogy fairly well with Japan after WW2. They only made cheap junk knock offs of US goods. But over time they got their QC down and began competing with equivalent quality, then finally surpassing US quality.  China is going down that path, and the US honey industry had better have a plan - create value added

the only way this will take place is --the american packers need to turn in the suppliers of circumvented and tainted honey-currently the packers simply reject the load-so the honey gets put back in the loop-gets blended out or sold to lees reputable packers-it needs to be removed from the market at a cost to the chinese suppler -they will not improve there methods under current practices-and if they do price will have to increase-and why you are supporting imported honey is beyond me -if it takes a tariff so be it theirs more to it than just the price of honey we have to feed america first-honey is just a byproduct from the BEEKEEPING INDUSTRY --- [nín hǎo] --- 8-)  RDY-B
-

[Acebird]

to Quality Control (QC) their exports they will be a force to be reckoned with in the American and European market.  I can make the analogy fairly well with Japan after WW2.

First of all China is nothing like Japan.  Secondly, China's QC will not change unless their consumers FORCE them.  This is no different than a mega corporation, they need to be forced.  If left unchecked the crimes will get worse not better.

I am more familiar with the FDA functions than I am with USDA functions but I think they operate in the same fashion.  The FDA doesn't inspect product; it checks the quality "system" and documentation of the supplying companies (in the United States).  There is no FDA in China, Japan or any other country.  The FDA puts the onus on the company that is name branding the products to follow "their" quality system.  The parent company is suppose to do the in-house inspections of all "their" manufacturing facilities and assure everything is up to snuff.

Now in the case of tainted (adulterated) product it is the responsibility of the parent company to recall it and keep track of it.  That means a paper trail as to its origin and if it comes to it, disposal.  Usually there is an investigation of the American plant of origin if it exist within this country.  It gets dicey when the plant is off shore.  For off shore plants the name brander (in the US) gets investigated as to how well they are following their quality system and usually they have to come up with an answer (plan) as how to prevent the infraction/s in the future.  This is where the too big to fail comes in as to who has more power in Washington, the FDA or the Mega Corporation.  Small Corporations don't usually survive the costs of recalls and end up getting swallowed by the bigger ones that can.  So the small corporations are deathly afraid of a recall and their QUALITY of their products not their programs show it.

OK now here is the deal, if there is no definition of "honey" then there is no infraction.  Period.  End of story.  The only possible way of an infraction is if the parent company defined what honey was for themselves and they did not put out what they said it was.  Each company can have its own definition of honey as long as the federal government doesn't come in and standardize the definition for all the US.  If anything is sold to Europe it must meet their criteria.  Europe is very selective on everything.  Although, Japan's regulations are without question the most difficult to comply with before and after the sale.  If you can sell Japan you can lick the global markets.

[Rosalind]

When the Chinese packers begin, and they will, to Quality Control (QC) their exports they will be a force to be reckoned with in the American and European market...  China is going down that path,

Citations please?

I am honestly unsure how you conclude this; I think it is just a very different economic situation. China has no shortage of Barnum-esque suckers to buy their junk. They are a reasonably wealthy country selling garbage products to comparatively poorer demographics--poor countries and poor populations within wealthy countries, of which there truly is no shortage, indeed there are more every day even within China as economic disparity grows. As long as China has a growing demographic of poor people unable to afford quality food to whom they can sell garbage, they have no real incentive to improve their quality. It would be like expecting Hormel to stop making Spam and start selling fresh grass-fed free-range bison.

Japan, in contrast, was a much poorer country selling technology-intensive products to wealthy demographics: it is reasonable that their product quality could rise to meet their customer base's expectations, as their market would otherwise have been restricted to the centrally controlled governments who would have imposed serious constraints. If they were going to grow their market, they had few choices: India, and middle-class Westerners. At the time, middle-class Westerners had more money.

You can see the effects of demographics demand currently in China: iPhones and iPads made in China become higher quality with many more features and speed, applications, etc. because their target demographic is able to pay for it and expects these features--even people living in areas with irregularly-available electricity are able to buy a mobile phone with lots of features to do their banking, pay bills online. People very much need to be able to exchange money and pay bills and contact relatives and colleagues cheaply, so there is a demand for these items even amongst very poor people, because it is a necessity when wars/lack of infrastructure/natural disasters preclude other options.

Honey is not a necessity in the same way. (I know, I am a blasphemer.  ) It's food, but other foods can substitute for sweetness. So it's a luxury branded product, like free-range meat, soda and organic veggies.

In contrast, also in China currently, for products that are targeted for a non-wealthy demographic, the quality is very poor, even poisonous. It's not that Chinese manufacturers simply don't know how to make good quality products, because they certainly do. It's that they choose not to, when they are confident that they might get away with it, which is when their demographic has few other options.

[alflyguy]

At several time the price of the honey at our local grocery store, I never have enough to satisfy my customers. They appreciate a quality local product.