RED SCARE: Competent Authority Decision Trees

You have a practically new red laptop, which you brought from the USA on a visit to your friend in Shanghai.  Your friend admires it and asks where you got it.   You offer it to your friend in exchange for their hospitality.

You have just committed a crime in China.  China has protectionist trade barriers, designed to make people buy new stuff made in new Chinese factories.   The USA Commerce Department, the WTO, and customs agencies around the world are constantly haggling over trade barriers, tariffs, and non-tariff trade barriers all around the world.  NAFTA was formed in North America to try to ease them, but it hasn't really worked.  The USA has a history with these as well, and many point to the Smoot-Hawley Act (increasing tariffs to create USA jobs) as the most likely cause of the Great Depression.

A non-tariff barrier is something created to act like a tariff but not to look like a tariff under a non-tariff agreement between two countries.   Let's say China bans the color red.   Just doesn't like it.  It's a sovereign nation, can do this if it wants.

The question is whether if you sell a product that is banned in China, whether you have violated a USA law if someone from China buys your red product.  You say "of course not?"  Read on.

Now let's say you are selling sneakers worldwide, including China.   You are in competition with a Chinese shoe manufacturer, who perhaps you accuse of reverse-engineering your design.  You realize that China has now banned the color red, and you have a red logo on your sneakers.

No problem.  Chinese Customs are the competent authority, if they say no red then you cannot ship red sneakers or sneakers with red logos.  You pull out some stocks, slow your orders, and start to begin shipping  a new design of your sneakers, one with an ORANGE logo.

Next thing your orange logo sneakers are stopped at the port.  You have been identified as a shipper of RED product.

  1. Containerloads of your sneakers which you were shipping to Singapore went through Hong Kong port.
  2. Orange contains red, it is a mixture of red and yellow.
  3. You have shipped red product in the past, and are a known red-product seller.
  4. Your loads are suspected to contain red product, so the containers must be set aside for inspection, incurring thousands of dollars in penalties on the sea containers at the shipping line.

Socratic Redness
If it was a laptop, rather than a sneaker, it might even be seized for displaying red content .. a picture of a red fire truck...  The accusations are all written in Chinese, it's going to cost tens of thousands just to find out what your product is accused of violating.  (In 2002, used goods were seized in China as being "below cost", and the western NGOs translated the word "dumping" to be an environmental enforcement.)

Red is a word, and most people agree what "red" means.  But with orange and purple and "midnight blue", it can get pretty subtle.  But any non-biased 3rd party observer would agree that the actions above appear to be aimed at the USA maker, not at the goods themselves.   This is an example of a "non-tariff barrier", intended purely to interfere with competitive commerce - which all signers of the WTO agreed not to do.  So you need a competent referee, which is either:

A) the WTO
B) the USA Department of Commerce
C) the Chinese Ministry of Colors
D) the Chinese Department of Commerce

In the example above, three out of four choices are correct:  The WTO, the USA and China Commerce Departments will all be involved in the dispute resolution.  The Chinese "ministry of colors" would submit testimony via the China Commerce Department.

The problem in the "e-waste" realm is that China has banned all secondary commodities, like the week old red laptop.  They have accused shippers of refurbished goods of illegal acts, similar to 1-4 above.  Yes, including shipping to other countries which accept re-manufactured goods if the sea container goes through a Chinese Port.   Hong Kong is one of the largest trans-shipping containeryards in the world.  If the USA is selling red cars to South Korea, they may well go through Hong Kong.

China, under Basel, has used the word "waste" to describe many things that compete with a product that a particular Chinese company thinks may compete with their product.  The USA has a lot of used working assets, and there are many rapidly emerging nations which are choosing between a well made used product (car, computer, clothing) or a cheaply made new version of the same product - often as not, "made in China".

E-Stewards Certification and R2 Certifications have definitions which are intended to protect reuse - "key functions", "tested working", or "fully functional", all debated with sincerity.  But none of these terms protects you as a recycler or "shipper of record" if the other nation DEFINES your product to be WASTE.  The only protection is your right to pursue whether the entity is a competent authority for that definition.   That's tricky, but the EPA in the USA does not have the authority to define a working used laptop, suitable for its original intended purpose, to be WASTE, and therefore does not have the competency to recognize that other agencies have the competency to declare working goods to be WASTE.

If you are like me, you "don't go there".  In other words, it's not worth trading used goods in China, whether you are right or wrong.  In other words, your shipment of red laptops or red sneakers to China may be ILLEGAL in China.  However, it is important to distinguish that the export of it was not ILLEGAL in the USA, and what was polluting or immoral.   And when competitors of mine who do sell to China are accused, I try to take time to listen for what they are really being accused OF before I join it the tar and feathering.

BAN and R2 and EPA should all recognize that the purpose of E-waste certification and reform is to stop bad environmental results, not to have our green laws coopted by dictators to stop internet or to protect local commercial interests.   The way some USA rules are being written, the export off the working red laptop is being defined as a USA ENVIRONMENTAL CRIME, when no pollution has resulted anywhere.   I sold computers to Egyptians, who used the internet to start a revolution.  That is not an e-waste crime, and wasting environmental resources chasing arbitrary accusations will not be good for the environment.

When two countries make trade agreements to "free and fair trade", they agree to submit these claims to a third party and to abide by WTO rulings.
Packaging instruction for working laptops
However, because of the cartoonish portrayals - both legitimate and propaganda - of electronic scrap yards in places like Guiyu, the word "waste" has been given special pollution, social, criminal status.   It is unlikely that Interpol (the UN police squad) would be involved in an investigation of red logo sneakers into China... that's a commerce/WTO joint.  But if pictures of children and allegations of toxics, witches brews, caldrons, purgatory, hellfire acid bath damnation have been circulated widely about a word - red, or waste - then people react to the word as if it is a crime without making the distinction whether there is any violation of the Basel Convention, IE that pollution with hazardous Annex III characteristics RESULTS.


Results is from Basel Convention.   It is a big word.   It's an important word.   If pollution results, the issue is definitely no longer a trade issue, it is an Environmental Protection issue.

No pollution results as a consequence of my sale of a tested working red laptop.  It is not "waste".

What BAN is trying to do (find a single elective upgrade RAM or capacitor, calling that upgraded PART a "waste") is find a pollution RESULT of sale of Annex IX material - the electronics repair, reuse, refurbishment of used electronics specifically defined by the Convention NOT to be waste.

What WR3A does is makes sure that the legitimate reuse and repair does not RESULT in pollution.  If a part is electively upgraded, damaged in shipping, etc. we create fair trade incentives for the importer to safely recycle it, so that no pollution RESULTS.

The RESULT of WR3A practices are that proper CRT cutting and recycling operations are now invested in Indonesia and Malaysia, which properly recycle any incidental breakage etc. from WR3A shipments.  We did that 5 years ago.  TODAY, most of those investments are being actively used to PROPERLY RECYCLE the CRTs generated inside those countries.

Caught Red Handed
By giving and paying for and incentivizing the recycling of fallout or electively upgraded parts, WR3A created a solution in these nations for their own waste, creating recycling jobs, and competing against hard rock "red metal" mining which is the biggest toxic threat in those nations rain forests and coral islands.

The key difference between exports under WR3A, R2, and E-Stewards is the difference between a unilateral test and a bi-lateral agreement.  Both R2 and E-Stewards design a standard for export "fully functional" or "key functions" or "tested working" - which can be employed by someone in the USA - end of story.  But the real "end of story" happens in a bi-lateral agreement.  Was the "tested working" unit electively upgraded?  Was the volume equal to the amount of storage space, or demand, that the end market has available?   A proper agreement which considers the needs of both parties.  And both R2 and E-Stewards leave dictators as the "competent authority".  If Country A bans the sale of tested working product to Jews, Christians, Tibetans - or arbitrarily bans the color orange - the R2 and E-Steward standards turn that into a domestic "environmental crime".   While I respect those laws, I resent seeing them turned into USA law by reference.  EPA in any country is the "competent authority" for matters of waste and pollution, not for commerce and reuse.

China also bans satellite dishes - because they can be used to watch Taiwanese television news, not because they are "e-waste" or toxic.   The USA EPA should not make the Chinese Communist Party a "competent authority" for export of used satellite dishes under RCRA!
Angola VT Reuse

The red laptop, by the way, is the same as the one I wrote about in the Spring, whose adapter plug worked as a power source but would no longer charge the battery.  I put photos of the repair parts in question, as an example of the kind of laptop repair which my Geek Friends in Egypt did.  I had the laptop fixed, here in Middlebury, by Nate of IndieCycle, who was up to discuss laptops with Miguel of Angola and Wahab of Ghana.  My own red laptop never did get exported for repair.  But even though I repaired it in the USA, it would still be illegal in China.  If Nate fixed it with Wahab in Accra, it would be legal under R2 but not under E-Stewards (since it was not fully functional at the time of repair).  But if Wahab or Miguel come to Middlebury to fix it with Nate, then it is legal to export under both E-Stewards and under R2 - but is illegal to export to Egypt, Kenya, or China.  Angola has not signed either the Basle Convention nor the regional African counterpart... he is free to buy the laptop and burn it, under international environmental law.  If he was an idiot spending Angola's limited resources to ship working and repairable product and lose money.  Which he isn't or he wouldn't have that money.

Got it?

From Ghana Wahab 2011

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