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China Caves to U.S. Pressure on GE Soybean Imports
March 18, 2002

After months of negotiations with U.S. trade officials and under threat of WTO complaint, China announced a temporary certification scheme for imports of genetically engineered (GE) food.

Pressure was brought to bear at the highest levels of government in order to ensure that U.S. farmers would be able to export their soybeans, 70% of which are genetically engineered. Soybean exports from the U.S. to China, the world’s largest soybean importer, are valued at US$1 billion annually.

The Chinese regulations–scheduled to go into effect on March 20 of this year–require labeling for all GE imports and also oblige companies exporting products to China to apply for safety certificates stating that their products are harmless to humans, animals and the environment. The original certificates were expected to take up to 270 days to obtain.

Under the new scheme, the Chinese Ministry of Agriculture will issue temporary safety certificates to GE food exporters if they have a similar certificate from their own or a third country. The temporary certificates will take only 30 days to obtain and will remain in effect until December 20, 2002.

Prior to the announcement, U.S. soybean exports to China had virtually halted in the face of the deadline for implementation of new Chinese biotechnology regulations. Importers in China had stopped placing orders for soybeans, and exporters in the U.S. had stopped sending shipments fearing that the products would be rejected at the border.

U.S. officials had complained that the regulations were restrictive and that the certification requirements were unclear. They had alleged that the regulations were not a reflection of safety concerns but are rather an attempt by China to protect its domestic soybean market. In February, the U.S. Agriculture Undersecretary commented that filing a World Trade Organization (WTO) complaint against China was “a big option.”

In response to U.S. pressure, the Chinese Ministry of Agriculture announced in March that they would publish detailed rules regarding the import of GE products and authorize several biotechnology testing institutions to issue safety certificates before the rules go into effect.

China is the single largest market for U.S. soybeans, buying 5.2 million metric tons of the crop last year. Annual U.S. soybean exports total approximately 27 million metric tons. About 70% of U.S. soybeans are genetically engineered to be resistant to Monsanto’s herbicide glyphosate.

American farm groups had urged the U.S. government to pressure China on trade issues. In their meeting in late February, the U.S. and Chinese presidents discussed the biotechnology regulations, but the issue remained unresolved.

At least two unnamed biotechnology firms, one from the U.S. and one from Europe, had hired a lawyer in New York to strategize and consider potential “action” should China proceed with the regulations.

Critics of biotechnology have accused the U.S., Argentina and other agricultural exporting countries of pressuring other nations–including Bolivia, Croatia, Thailand and Sri Lanka–to drop strict rules on GE products that they have adopted or proposed to adopt. Both the U.S. and Argentina argue that rules restricting GE imports violate international trade law under the WTO.

Sources: Reuters News Service, March 12, 2002; Agence France-Presse, March 6, 2002; Reuters February 28, 2002; Associated Press February 21, 2002; Reuters, February 14, 2002, February 21, 2002; Inter Press Service, February 11, 2002; Office of the U.S. Trade Representative Press Release, February 7, 2002.

Contact: PANNA.

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