The Newly Signed Economic and Trade Agreement Makes USA Exporting Infant Formula to China Easier

On 15^th of January, 2020, USA and China signed ECONOMIC AND TRADE AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNITED STATES OF AMERICA. This agreement set the requirements on the trade between USA and China regarding many food product categories, e.g. dairy product, infant formula, meat, seafood, fruit and vegetable. This Agreement enters into force within 30 days of signature by both Parties or as of the date on which the Parties have notified each other in writing of the completion of their respective applicable domestic procedures, whichever is sooner. In this article, CIRS summarizes the content, in the agreement, related with exporting infant formula from USA to China.

Infant formula falls under special food category, based on the current Chinese regulations, if the foreign companies plan to import and sell their infant formula powder to China, they need to complete two kinds of registration first: 1. The foreign infant formula facilities need to complete the facility registration under General Administration of Customs, P.R. China (GACC); 2. Infant formula powder products need to complete the product formula registration under the State Administration of Market Regulation (SAMR). In the agreement, China has set special requirements for USA infant formula companies to facilitate their registration processes in China, details as follows:

USA infant formula facilities registration will benefit from the following points:

(1) To streamline procedures, improve efficiency, and advance trade facilitation, not require an on-site audit or inspection as a pre-requisite to registering an infant formula facility; if on-site audit or inspection is required, China needs to notify the FDA, the USA Department of Agriculture (USDA), and the facility at least 20 working days in advance;

(2) Ensure that any audit or inspection it conducts for the registration of an infant formula facility is for verification of either the USA system of oversight or of the ability of the facility to meet the applicable requirements;

(3) Each time the United States provides China with an updated and complete list of infant formula facilities under the jurisdiction of the FDA, within 20 working days of receipt of the list, register the facilities, publish the list on the GACC website, and allow USA infant formula imports into China from those facilities, provided the infant formula product is registered with the SAMR;

(4) In the meanwhile, within one week of the date of entry into force of the Agreement, China shall register those USA infant formula facilities whose products have been approved in China and that have facility registration applications pending review by the GACC by publishing the complete list of facilities on the GACC website;

(5) Not require renewal of registration of infant formula facilities more frequently than once every four years.

USA infant formula product formula registration will benefit from the following points:

(1) Take into full consideration USA regulations when China reviews applications for, and decides on, the registration of USA infant formula products; in the meanwhile, take into account previous Chinese audit reports, USA regulatory information, and any other relevant information, including information provided by the manufacturer, when determining whether a facility inspection is required for product registration or re-registration;

(2) Accept, complete review of, and issue a decision on product registration applications regardless of whether the submitting entity is associated with an already-registered facility;

(3) Time for reviewing and deciding on the applications of USA infant formula products is halved. Based on the current regulations for infant formula product formula registration, the required time for reviewing and making the decision is about 208 working days. However, based on the trade agreement, for USA products, the estimate registration time is 105 working days. The detailed timeline comparison as follows:

Registration proces s	Required time (working days)
	Current registration measurement	Economic and trade agreement between USA and China
Application acceptance	5	45
Transfer dossiers to review center	3
Technical review	60
Provide additional documents (usually required)	Submit the additional dossiers within 3 months
On-site inspection	20 (Chinese domestic infant formula) Case by case (imported infant formula)	40
Random sampling	30
Decision making	20	20
Decision notification	10
Total	Estimated 208 working days	Estimated 105 working days

(4) Ensure non-disclosure of all trade secrets provided in the infant formula product registration process;

(5) Not require renewal of registration of infant formula products more frequently than once every five years.

The economic and trade agreement between USA and China is beneficial for USA infant formula to conduct the regulatory compliance work for Chinese market, because the agreement greatly reduces the difficulty of USA infant formula facilities and product formula getting registered and reduces the uncertainty caused by many reasons, for instance on-site audit or inspection. In the meanwhile, when reviewing and deciding the registration of USA infant formula companies, China will also take into full consideration USA regulations, which could facilitate the registration process of infant formula facility and product formula.

At present, there are seven USA infant formula facilities have got registered in China (), and three of them produces liquid infant formula. Based on the current regulations, liquid infant formula products do not need to get the product formula registration. Among the remaining 4 facilities, only one facility (Maple Island Inc.) has already got the product formula registration for one brand (Baby's Only). This agreement is a good opportunity for USA infant formula companies that are interested in Chinese market. It is believed that there will be more USA infant formula facilities and product formula successfully get registered soon.

Resources for the agreement:

PS. CIRS China is providing imported infant formula milk powder registration service, and have rich experiences and successful cases. If you need any regulatory support, please feel free to contact at service@hfoushi.com.