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New Chinese Regulations Could Harm Trade

posted on February 22, 2002

The news was not as encouraging for other crops. Global competition for wheat will drive U.S. exports to their lowest level in 30 years. Collins said the loss of those sales will contribute to a 5 cents per bushel drop in wheat prices. And cotton prices, currently at their lowest level in 30 years, will see only a small rise in the coming crop year.

As for soybeans, Collins said large worldwide supplies likely will hamper any improvement in exports or prices. The prospect of reduced exports is made worse by trade disputes over genetically modified soybeans. The latest clash is with China, where new rules are threatening shipments of U.S. beans to a long-time customer.


New Chinese Regulations Could Harm Trade

The repercussions of China's new rules governing genetically modified organisms, or GMOs, will have far reaching effects.

On its face, China appears to be following the lead of other world economies by requiring GM seeds to be certified as doing no harm to people, animals or the environment. Even so, detractors of the new rules believe this is just a non-tariff trade barrier.

Anne Veneman, U.S. Secretary of Agriculture: "There are a number of these areas where people are using regulations to impede our exports into those markets. And it hasn't happened yet with China, but what some of the things they are proposing could be issues that really harm our exports."

The major criticism relates to vague language surrounding the certification of each GMO. The new policy is unclear as to whether one seal of approval covers all shipments or if certificates will be required for each load.

The prospect of the new rules already has brought the U.S. export market to a standstill. Last year, China purchased 5-million tons of soybeans, roughly $1-billion dollars worth. It is certain that a portion of those shipments contained GM soybeans since last year's crop was comprised of nearly 70% Roundup Ready beans, a variety engineered to resist Roundup herbicide. This year American farmers are expected to plant at least that amount again.

This week, President Bush became the latest in a series of U.S. Government officials attempting to press the Chinese for more time and more clarification. The Presidential pressure appears to have had no effect and the rules are still on track for a March 20 rollout.


Tags: agriculture China economy genetic engineering news trade