Exporting $8.4M from a Foreign Trade Zone
Making it Easier for China Consumers to Buy U.S. Dietary Supplements
Jiangxi Province Foreign Affairs Official inspects U.S. products at the Nanchang Foreign Trade Zone. The United Natural Products Alliance (UNPA) is using the FTZ to make it easier for U.S. makers of dietary supplements to sell to customers in China. UNPA’s efforts have helped U.S. firms generate $8.4 million of sales in China over two years.
Beating Trade Barriers: From Blue Hat to Distributed Ledger
The FTZ strategy is just the beginning. Barriers to China’s $23 billion natural health products market remain like the “blue hat” quality seal from the State Administration for Market Regulation. It resembles a blue hat, hence the nickname. The seal signifies that products meet high quality and safety standards. Firms with blue hat registration certify, among other things, the origin of all product inputs. But the registration process disproportionately favors Chinese manufacturers, with over 99% of approvals being awarded domestically.
The next phase of UNPA’s strategy is to create an alternative to blue hat by integrating distributed ledger technology within FTZ environments. This new quality and regulatory assurance process will allow U.S. firms in FTZs to meet or exceed the blue hat requirements without going through the discriminatory process.
ITA Support
The support of the International Trade Administration goes beyond the $300,000 financial award ITA made to UNPA in late 2020. ITA’s Commercial Service China staff, including Ming Yang, Xiaowan Yan, and Yaoyi Wang, has helped UNPA coordinate and mount two major events in China. From Washington D.C., Michael Boyles in ITA’s Industry & Analysis unit coordinates overall support by the 11-member ITA project team from Washington, D.C. From ITA’s Commercial Service field office in Salt Lake City, where UNPA is headquartered, Shelby Daiek and Daniel Bruner provide stateside support.
UNP Strategy: Create U.S. Jobs at New FTZ
UNPA members have really taken to the FTZ model. Most recently, UNPA and World Trade Center Utah are helping U.S. firms leverage duty-free imports of inputs, transform them into higher value-added products, and re-export them, thus increasing margins and creating U.S. jobs.
China remains a huge market, but with the FTZ strategy many new markets are becoming profitable for U.S. firms. UNPA predicts $30 million in additional export sales for the industry with the new FTZ strategy.