Improved business but problems for European members

29 June 2001

As usual, the International Council of Hides Skins & Leather Traders Associations held their meeting in Hong Kong immediately prior to the Asia Pacific Leather Fair. In his president's report, Gorman went on to say: 'BSE is no longer solely a United Kingdom problem. 'According to the OIE (The World Organisation for Animal Health) outbreaks have occurred in sixteen other countries - most of which are in Europe. Countries reporting the highest incidences are Belgium, France, Germany, Republic of Ireland, Portugal, Spain and Switzerland. But, of course, their numbers in no way approach those of the UK. Around 200,000 cases have been confirmed since 1994. 'Just when meat consumption had returned to a pre-BSE level in the UK, the country has been gripped by a relentless spread in foot and mouth disease. The horrific pictures of burning animal carcases must have been flashed across most of our television screens. I am sure we would all like to express our sympathies to the UK at this time. 'As a separate issue, the question of controlling levels of animal health and hygiene has long been a subject dear to the hide and skin trade. It has been an on-going and uphill struggle to make farmers appreciate the added value it gives to the hides and skins of their animals. But the struggle must continue. 'From a council membership point of view, the US constitutes our single biggest producer of hides. Increased exports are going primarily to China and South Korea. These same markets are soaking up the exports of both Australia and New Zealand. Given these factors some of us must be concerned with the economic slow down in the US - the country often referred to as the engine which pulled the Far East out of recession. 'Possibly it is reassuring for us to learn that a world economic downturn would hardly ripple the surface of China's economy. Last year, China's imports grew by a staggering $55 billion - suggesting that the country is, itself, becoming a regional engine of growth. For the same period, foreign trade was put at $475 billion. China's stock of foreign direct investment is the world's third largest. 'In the current year, the Deutsche Bank in Hong Kong estimate that only a half-percentage point would be knocked off the country's growth…if…China's net exports were to decline by even as much as 25%. 'As I speak, we should note that nearly all agreements are in place for China to join the World Trade Organisation this year. According to an article in the Beijing Leather magazine 'joining the WTO is a promotion to leather industry.' Certainly we have all heard Madame Zhang of the China Leather Industry Association campaigning on behalf of the leather industry in her country. 'The ICHSLTA Asia Committee is doing a great job in promoting the use of the International Contracts No 6 and No 7. Already No 6 has been translated into Chinese and the completed translation of No 7 is imminent. Thanks must go to Unido, as well as to the Chinese, for their separate contributions towards translating the Interational Contracts accurately. It is hoped this work will promote sound Sino/global trading practices within our industry. Report of director general Tony Cox told the meeting that during the year the association had again been approached by the International Council of Tanners - on behalf of their Italian association - with another re-draft of the International Contract No 6. He went on: 'It has to be remembered that the International Contracts are used effectively worldwide without problem. We do not receive any complaints from the tanners - with the exception of the odd point here and there which is always given due consideration. 'But the points which, once again, are now being raised are points which have been considered in the past and which the ICT contracts committee themselves have dismissed in debate. 'Our membership has voted overwhelmingly against any renegotiation for at least four years. Although the membership fully appreciate the need to keep the contract updated it is pointless to enter into new negotiations when the current contract is running well - without problem to the trade in general. The costs involved with travel, meetings and people's time, reprinting the contract, arranging translation work for other languages, writing off the current stocks etc, are tremendous and cannot be justified on the basis of one-off requests.' Cox then went on to outline the foot and mouth situation in the UK and the rest of Europe, saying that at the time of speaking there was no end in sight. He said that the virus is mainly of Far Eastern origin and the most likely cause was meat which goes to pig swill which is not cooked at high enough temperatures to kill of the virus. The pigs eat the infected swill and then take the virus out into the field. He suggested that the meat was probably leaving the east in frozen form but was likely to undergo defrosting and refreezing. The virus is extremely contagious and can be airborne up to 100 miles with a 21-day incubation period. Affected animals are burnt to destruction and then a second cull is carried out to provide a firewall to prevent the spread of the infection. All hides and skins are lost, having been burned with the carcase at the point of slaughter. Cox said that it would be at least August or September before normality might return and this would involve the loss of 3 - 5 million cattle and sheep. The worst case scenario would involve 50% of the UK's livestock. Exports of hides and skins are allowed within the EU with appropriate veterinary documents but the disaster has been devastating in the UK industry with a severe knock-on effect in Europe. Elsewhere knee-jerk reactions from other govenments have resulted in a ban on UK hides in Poland, a twelve-month (reduced to six months) ban by Türkiye who have turned containers back, and China only allowing wet-blue but refusing pickle or wet salted. The mass slaughter has led to a problem of carcase removal which eventually led to the army being called in. Cox said the army was not involved earlier because this would have required declaring a state of emergency preventing the proposed May election. In the event political interests had to be waived and the election postponed. But one wonders what the delay cost in real terms.

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