Tue October 3, 2017

 

PLASTICS Chief Economist Perc Pineda weighs in on how China’s intent to ban imports of scrap plastics by the end of 2017 could impact the plastics and recycling industries.

China's notification to the World Trade Organization (WTO) of its intent to ban the importation of recyclable plastics by the end of this year places U.S. exports of those plastics at risk.

For the record, countries were only given 48 hours to comment on their notifications to the WTO—an unusual move and an underhanded strategy that the U.S. government is protesting. Regardless of how that plays out, the import ban, which also includes paper and metals, is already on the U.S. Department of Commerce Secretary Wilbur Ross’ agenda when he meets with China's government officials next month.

While China has branded the import ban as an expression of its concern for the environment, it is rather oxymoronic that it would ban the importation of products that, by their very nature, keep the gears of an environmentally-beneficial process—recycling—churning as a global activity. An outright import ban will in no way address China’s stated concern of health and environmental safety. As such, there appears to be a slightly more sinister reason for such a bold display of protectionism. It should also be noted, however, that China itself also exports recyclable plastics, including to the U.S. Would its import ban lead other countries to stop importing recyclable plastics from China? Where would those materials go?

In any case, last year 38.6 percent of U.S. exports of recyclables went to China. While the ban has yet to take effect, exports of recyclable plastics to China have already decreased in the first half of this year compared to last.

One scenario would be for the import ban to fully go into effect in January, driving the U.S. to develop new markets for recyclables and companies with recycling operations in China to move into other Asian nations. This would be disruptive, but certainly not catastrophic. Another possibility would be that the ban gives rise to a reshoring of recycling activities to the U.S.

If anything is certain, it’s that the U.S. plastics industry’s commitment—environmentally and financially—to recycling will not waver due to any import ban. Environmental groups need not be concerned that the China ban would mean more landfilling of plastics materials in the U.S. The industry has already begun to adjust.