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Can GMO’s can be a win-win for the U.S. and China?

June 25, 2014

Much has been written in the media recently about China’s rejection of shipments containing varieties of unapproved genetically modified corn. Trade disruption such as this is unnecessary and costly because the product in question has been approved for use in food, feed and for cultivation in several countries, including Argentina, Brazil, the European Union and the United States.

This exposes a significant vulnerability in global commodity trade, as most countries maintain a zero tolerance policy for biotechnology products that have not been approved in their countries, forcing them to reject shipments, rather than manage the situation appropriately. This disruption and China’s approach to GMO regulation costs U.S. agriculture industry billions and hurts China’s ability to access a consistent supply of imported corn and soybeans to feed their rapidly growing livestock industry.

Chinese leaders see the promise and importance of agricultural biotechnology and raised its investment for domestic GM technology development. Officials have said China will not fall behind in the field of transgenic technology development, because it is critical to national development and food security.

As the #6 ranked country in global production of GMOs, China planted almost 4 million hectares of GM pest-resistant cotton in 2013. The country also cultivated more than 6,000 hectares of GM papaya last year.

But for outside firms trying to do business with China, GMOs have been a key obstacle. Most of the varieties at issue have been cleared by the United States and other exporting and importing nations, but have been awaiting approval by Beijing for years. Currently, China does not begin its reviews of GM products until approval from the importing country – such as the United States – is received. In the best of circumstances, this puts China two-to-three years behind U.S. deregulation, however, some products have been stuck in the queue for four to seven years.

The American Chamber of Commerce in China released a report earlier this year saying that China’s biotech approval process “has gone from being slow but predictable to even slower, unpredictable and nontransparent.”

The situation prompted U.S. Secretary of Agriculture Tom Vilsack to meet with Chinese government officials in December as part of the annual Joint Commission on Commerce and Trade talks. There was discussion of biotech approvals, including a pilot program to synchronize U.S. and Chinese regulatory review of new biotech crop varieties.

As this article goes to press, China’s Ministry of Agriculture (MOA) has not approved a new soybean or corn biotech trait since June 2013. In the past, MOA routinely issued decisions three times per year but since 2011, this has dwindled to about once per year, according to U.S. government and industry officials.

Ultimately it’s American farmers and Chinese businesses and consumers that suffer. U.S. Farmers need access to the latest technology in order to maintain competiveness and to manage insects and weeds and environmental challenges like drought . However, because China imports more than a quarter of total U.S. soybean production, many farmers are reluctant to plant biotech traits that are unapproved in China to avoid the potential for trade disruption.

GMOs are critical to the economic well-being of the United States and China, so it is essential that these governments work together to find a solution that will enable U.S. farmers to use new technologies and Chinese firms and consumers to have needed imports.

Matthew O’Mara is the Managing Director for Food and Agriculture, BIO