Research On Impacts And Measures For EU’s Technical Barriers To Trade Against Chinese Toy Export

With the continuous development of trade protectionism, the traditional means of trade protection are limited and restricted by international trade rules, and non-tariff barriers are being gradually abolished by countries. However, the Agreement on Technical Barriers to Trade of the World Trade Organization (referred as TBT Agreement of the WTO) has some exceptions and special provisions for technical barriers to trade, which makes technical barriers to trade become the most important and widely used tool for trade protection. The European Union, as the second largest importer of Chinese toys, is also one of the birthplaces of technical barriers to trade, and its release of the New EU Toy Safety Directive (2009/48/EC) formally implemented on 20 July 2011 has improved toy market threshold. Therefore, Chinese toy exports enterprises are facing a severe challenge for survival. Based on the analysis of the characteristics of technical barriers to trade, the status quo of Chinese toy industry and the New EU Toy Safety Directive, this paper evaluates the impacts of technical barriers to trade on Chinese toy industry, tries to give measures to deal with the technical barriers to trade against Chinese toy export and explores a sustainable way to develop Chinese toy industry.The first chapter is the introduction part that containing the research background, research significance and literature reviews. The research status and trends at home and abroad provide strong guidance for this paper.The second chapter of this paper gives a brief overview of the theory of technical barriers to trade. At present scholars do not reach a consensus on the definition of technical barriers to trade. According to the explanation and expression of the TBT Agreement of the WTO, the definition of technical barriers to trade can be summarized as, for the guarantee of the quality of its exports, or for the protection of human, animal or plant life or health, of the environment, or for the prevention of deceptive practices, a series of mandatory or non-mandatory technical measures are taken by the government or regional organization to set market access obstacle and limit import from other countries, including technical regulations, standards and conformity assessment procedure. Chapter two also expounds the origin, forms and characteristics of technical barriers to trade in the European Union. With the improvement of economy and technology in its member states, consumers have higher requirements for the quality and safety of products. On the pretext of ensuring product quality, protecting human life and health and protecting environment, developed countries take advantages of the existence of technology gap to set up technical barriers to trade, so as to protect economic interests and the development of domestic industry. Since the deepening of economic globalization and trade liberation, tariff barriers and traditional non-tariff barriers were abandoned by countries. Technical barriers to trade gradually become the widely used trade protection tool around the world trade due to its rationality, concealment and universality.Chapter three gives a detailed analysis of the status quo of Chinese toy export and the technical barriers to trade system of the European Union against the export of Chinese toy. The first part of chapter three analyzes the status quo of Chinese toy exports from four aspects. In terms of export value, Chinese toy export value has kept a steady growth during the recent ten years. Only in 2009, the export value declined due to the frequent toy recalls in 2007, the global financial crisis in 2008 and the release of the New EU Toy Safety Directive in 2009. In terms of the export destination, Chinese toy mainly export to a few developed countries and regions, including the United States, the European Union, Hong Kong and Japan, which accounting for more than 60% of the total export value. However developed countries mentioned above are also the main bodies formulate and implement technical barriers to trade, which determines toy exports in our country will unavoidable encounter technical barriers to trade. In terms of trade mode, processing trade still accounts for a large proportion of Chinese toy exports, but a downward trend is presented in recent years. Processing trade, on the one hand, helps enterprises quickly enter the international market. On the other hand, enterprises can only earn cheap processing fee. But high value-added production phase of toy industry chain are dominated by foreign enterprises. At the same time, mainly produce low-tech products limits Chinese enterprises to innovate technology. In terms of the export area, Chinese toy export areas mainly concentrate in Guangdong, Zhejiang, Jiangsu, Shanghai, Shandong and Fujian. Export value of the above provinces account for more than 90% of the total amount of Chinese toy export. From the perspective of geographical position, the primary export provinces locates in coastal areas where economy is developed with high level of opening up to the outside world, convenient maritime transportation and cheap labor resource and materials.In the second part of chapter three, this paper describes the technical barriers to trade in the European Union that against Chinese toy from three forms which are specified in the TBT Agreement of WTO, including technical regulations, technical standards and conformity assessment procedures. Technical regulations are mandatory provisions and documents that stipulate the product characteristics or related processes and production methods which usually published in the form of directive. It can be seen the complexity and universality of technical barriers to trade in the European Union by listing toy related directives. Technical standards are non-mandatory documents approved by a recognized body that provides rules, guidelines or characteristics for products or related processes and production methods, which can be repeated used. Technical standards in the European Union are in the form of harmonized standards. Harmonized standards are tools for manufactures to prove that products are in compliance with the basic requirements of directives. The present harmonized standards set up various requirements related to toy include mechanical and physical properties, chemical properties, electrical properties, labeling and so on. Conformity assessment procedure refers to any procedure used, directly or indirectly, to determine that relevant requirements in technical regulations or standards are fulfilled. Conformity assessment procedures related to toy can be divided into two categories. Manufacturers could obtain the CE marking and enter the European Union market by completing the EC type examination by a notified party or self-verification.Chapter four of this paper analyzes the impacts and reasons that Chinese toy export encountering technical barriers to trade in the European Union. There are both negative and positive impacts on Chinese toy export.In the short term, technical barriers to trade directly cause the rising of product cost and reduction of export value. Strict requirements also increase the level of market access standards for Chinese toy enterprises. In the long term, technical barriers to trade contributes to formulation and implementation of Chinese toy technical regulations and standards, technology reformation and product upgrading and increasing awareness of protect consumers’ interest. The paper also analyzes the reasons why technical barriers to trade are set against Chinese toy from international and domestic perspectives. Trade protectionism is rising after European countries suffered great losses in the financial crisis and economy recovered slowly, to protect domestic industry and ease social contradictions. Meanwhile, as the second largest export market of Chinese toy industry, the European Union is also the origin of technical barriers to trade. Too much relying on only a few developed countries will inevitably lead to increasing risks to encounter technical barriers to trade. In addition, with the improvement of the living standard in the European Union, consumers have higher requirements on products especially toys are mainly used by children. Domestic factors are listed as follows. The irrational toy industry structure determines Chinese toy enterprises mainly manufacture low-tech products without self-owned brands. It is hard for them to reach the strict requirements set by the European Union because of the lack of incentive to innovate technology. What’s more, imperfect domestic technical regulation and standard system and low national technical specifications provide opportunities for Chinese toy enterprise export unqualified products to the European Union. Moreover, the lack of standard consciousness and experience of dealing with technical barriers to trade makes Chinese toys enterprises vulnerable to technical barriers to trade in the European Union.In chapter five of this paper, measures are concluded from the perspectives of government, industry association and enterprises according to the status quo and reasons of technical barriers to trade in the European Union. Government should play a guiding role to create a favorable external environment for Chinese toy enterprises. Accelerate the construction of technical standards system related to toy product and make them in line with international standards, are the most direct ways to avoid technical barriers to trade in the European Union. In order to reduce the potential losses of Chinese toy enterprises caused by technical barriers to trade, government also needs to establish an early warning system to get the newest information timely. Guide the restructuring of toy industry so as to realize technology reformation and products upgrading of toy enterprises, expansion of the production scale and enterprises scale, and establishment of self-own brands. Industry association ought to play an intermediate role in connecting government and toy enterprises. Active participate in the formulation of industry standards by helping government to propagandize policies and regulations to enterprises and reflecting opinions and suggestions of toy enterprises to government. Industry association should also supervise market order and strengthen self-discipline to create a favorable export environment for Chinese toy enterprises. As the representative of the common interests of all toy enterprises, industry association could coordinate and organize related enterprises to cope with technical barriers to trade together, and provide assists and counseling for enterprises who are in need of. Establish cooperation and exchange mechanism to provide a wide platform for toy enterprises to conduct commercial exchanges and promote products. Toy enterprises obviously should play a leading role in striding over the technical barriers to trade. Keep Track of the trends of technical regulations and standards and enhance of the awareness of standard consciousness helps Chinese toy enterprises avoid technical barriers to trade in advance. Focusing on technology reformation and product upgrading and narrowing the technology gap between us and developed countries is the core to overcome technical barriers to trade. Only when Chinese toy enterprises possess self-owned brand and core technology can survive in the fierce competition. When encounters technical barriers to trade, enterprise should make use of the favorable clauses for developing countries to fight for the fair trade treatment. At last, expand market to developing countries is another alternative to avoid technical barriers to trade and reduce the risks of relying on single market.