China Completes Biotech Approval
Beijing OKs final safety certificates for key US agricultural products
BEIJING - 02/24/04 - Chinese government officials have announced the approval of permanent safety certificates for several grains derived from plants improved through biotechnology.?
The decision comes after extensive testing by Chinese scientists who confirmed the safety of these crops, which has long been realized in the US. The successful outcome of this issue resulted from close cooperation between the US and China.?
Previously, China required traders to obtain temporary safety certificates, usually good for only a few months, if they wished to import biotech grains. China is expected to finalize the safety approvals for other biotechnology products in the near future.
Currently, China is the top foreign customer for US soybeans and cotton.?
For the first five months of the current marketing year, US soybean sales to China reached 8.3 million metric tons, more than a third of total US soybean sales to all export destinations.?
In 2003, US agricultural exports to China reached a record of nearly $5 billion, in large part due to record exports of soybeans, which reached nearly $2.9 billion.
US cotton sales to China also rose significantly, amounting to almost $740 million compared to $141 million the previous year.
This is the first permanent approval issued by China for imports of a food commodity produced through modern biotechnology.
The biotech crop approvals "are a significant development that should assure continued US access to this important market," said US Trade Representative Robert Zoellick and US Secretary of Agriculture Ann Veneman in a joint statement.
China's decision to approve the certificates for several biotechnology crops "is another positive step for trade between our two countries and demonstrates the Chinese government's commitment to the WTO principle of using sound science to determine such issues," the statement said.
The move to approve the safety certificates comes shortly after Deputy Assistant US Trade Representative Charles Freeman III told a recent meeting of the US-China Economic and Security Review Commission that "China's WTO compliance record falls short of the mark."
According to Freeman, 'While US exports to the world have decreased by 9 percent" over the past three years, "exports to China have increased by 62 percent."
But, he said, "neither volume of trade statistics nor anecdotal evidence of US business successes in China are the yardsticks by which the Administration measures China's compliance with its trade agreements."
Freeman said the true measure of China's compliance with its WTO commitments is "the extent to which China has institutionalized market mechanisms and curtailed direct governmental actions or complicity with nongovernmental actions to intervene in the marketplace," adding that the country "has made important headway since its WTO accession two years ago, and has completed much of the nuts and bolts work of WTO implementation."?
He pointed out that the Chinese government has reviewed thousands of laws and regulations and made changes necessary to effect many of its WTO commitments; established new transparency procedures in many national and sub-national ministries and agencies; reduced tariffs to their committed levels; and relaxed certain constraints in soybeans trade, as well as reduced capitalization requirements in some financial services sectors; and opened up the motor vehicle financing sector, among other things.
Despite these improvements, Freeman said, "China's market for US goods and services is not as open as it should be, our engagement with China in the WTO has not been as useful as it should be, and China's record of WTO implementation is more inconsistent than it should be."
He noted that China's WTO implementation efforts "have taken place against a challenging political and social backdrop" that has included a major leadership change and a national epidemic of severe acute respiratory syndrome (SARS) in 2003.
"These factors may have presented challenges, but they are not grounds for foot-dragging in implementing WTO commitments," he said.
Freeman said the Bush Administration believes that, for China to be in compliance with its WTO commitments, the Chinese government must meet obligations to fully open its agricultural market; refrain from the use of arbitrary limitations on agricultural market access; better enforce intellectual property rights (IPR) through mechanisms such as the use of deterrent-level criminal penalties and restriction of exports of counterfeit or other IPR infringing goods; and provide for full liberalization of trading rights and distribution services.
In addition, he said, Beijing is expected to use fair and transparent standards and technical regulations; establish procedures that ensure the public's right to comment on proposed measures; and fully institute national treatment - including non-discriminatory taxation - and market access for US goods and services.
Freeman concluded his prepared testimony before the commission by saying that the Bush Administration is "fully prepared to assert the United States' rights through multilateral means, including dispute resolution at the WTO" if cooperative or bilateral efforts with the Chinese government "are not productive, or if it becomes clear that engagement on any given issue has reached stasis."
The Washington, DC-based US-China Economic and Security Review Commission monitors, investigates, and reports to Congress on the national security implications of the bilateral trade and economic relationship between the US and China.?
The Commission is composed of 12 members, all of whom are appointed by members of Congress.
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