Synchronizing China trade on biotech and beef

Jan 4, 2014
by WLJ

U.S. Agriculture Secretary Tom Vilsack raised some concerns about public views on biotechnology in China that require the trade negotiators and biotech companies to take a cautious approach.

Following up on his pre- Christmas trip to China, Vilsack told DTN in an interview last Tuesday that public officials in China are getting more pressure from the public about biotechnology. In a positive sign, Vilsack thinks the U.S. will be sending U.S. beef to China in the coming year.

The conflicts over rejected grain shipments yet optimism over possible beef exports reflect some of the growing pains in the trade relationship. With roughly $20.5 billion in sales, China is close to topping Canada as the top market for U.S. agricultural products. Soybeans, virtually all biotech, make up 60 percent of the sales.

Vilsack said biotechnology approval is always a major topic when speaking with Chinese officials, but they cannot be compelled or coerced into speeding up their regulatory process. China’s policy requires beginning its regulatory approval process after an export country completes its regulatory approval. More than two dozen biotech petitions are still waiting approval in China. Some involved extensions of imported grains that had already been approved at least once before.

On the continuing rejection of Syngenta’s MIR162 insect-resistance corn trait, Vilsack suggested the rejection of corn shipments by China goes beyond the actual trait involved. Shipments of corn and distillers grain have been turned away because the MIR162 seed has been awaiting Chinese approval for two years.

“[The] impression from U.S. and Chinese officials was that there was some specific issue with the shipments, that [it] was more than just a biotech trait that had not been approved,” Vilsack said. “There was some concern about the communication that had taken place about the company and the Chinese. At least that’s what I gathered in some conversations with the shippers and with the Chinese officials.”

Vilsack didn’t give any indication China would move more quickly to approve MIR162, despite the market disruptions over the rejections. China has rejected roughly 650,000 tons of corn and 2,000 tons of dried distillers grains, according to Dow Jones.

USDA has been working to start a pilot project with China to begin the regulatory process on a biotech trait at the same time in both countries. The current asynchronous regulatory regimes extend the entire approval process by years, creating the situation in which a crop is approved in the U.S., but not for export to China. “What we’re suggesting is, we could shorten the time by having the processes in China and the U.S. start at the same time,” Vilsack said.

It’s understood the U.S. would probably still conclude its approval more quickly than China, but it would still shave time off the process. “So we are working out the details of what that pilot would be and when it would start, but there is still a desire to do that.”

Vilsack said the U.S. cannot compel China to accept biotechnology, but needs to demonstrate both the safety and benefits to Chinese officials. Working with China at various levels will prove better in the long run, he said.

The secretary noted there is “a great deal of negative reaction” in the Chinese public to biotech crops. That is affecting the way Chinese officials at some ministries have approached biotech approvals.

“So what you are seeing is an overall general concern of how to deal with this public reaction, and I think that’s part of the reason there has been a slowerthan-expected process within these ministries for approvals on certain events,” he said.

Overall, some of the complaints against biotechnology in China mirror those raised in the U.S. Some consumers still remain leery of the science. “The reality that some believe it represents a challenge, a threat to safety and so forth. Those are predictable and understandable,” he said.

Vilsack said he was more surprised by an argument being made in China that biotechnology is a way in which Western culture can try to infiltrate Chinese life. There is lingering fear in China over a foreign culture having too much influence over China’s population.

“Of course, that is a very difficult issue for us to address, but I think we have to be sensitive to it, recognize it as an issue and work with the Chinese to assist their administration and their officials who understand the need for biotechnology and the importance of science in agriculture’s future” he said.

Beef in China in 2014

U.S. beef could finally move into the rest of China beyond Hong Kong if Chinese officials follow through with plans to open up the market in 2014.

After the U.S. moved to allow imports of processed chicken products from China, Vilsack said he expected China to make a good faith move on importing U.S. beef.

China has agreed to start the process of allowing imports of U.S. beef from cattle under 30 months of age. That could include both boned and deboned cuts, as well as five specific offals, or variety meats. “We’re now working on the technicalities of this, such as certain certification requirements that go hand-in-hand with access,” Vilsack said. “There is still work to be done there, but I think there is a desire to get those technicalities resolved sometime in 2014.”

The assurances from Chinese officials mark the first time they have agreed to put a timetable on reopening the market. “In both public and private conversations, I got the sense they were serious,” Vilsack said. “They recognize they have a responsibility. So we saw that as some progress.”

USDA indicated two weeks ago that approval could come by mid-year.

Outside of Hong Kong, China has kept a ban on U.S. beef because of bovine spongiform encephalopathy cases a decade ago. U.S. beef exports in 2012 reached $5.5 billion, but very little is sold in China outside of Hong Kong. Through October, 2013, beef exports totaled $4.4 billion, of which about $614 million in beef went to Hong Kong.

China, though, also wants the U.S. to approve imports of whole or cut chicken products. USDA will have to make sure there are equivalent inspection standards before allowing such imports from China, Vilsack said. USDA has audited Chinese meat inspections and raised specific concerns. “We need some answers to some questions we raised in those audits for us to go to the next step,” Vilsack said. Any imports have to be as safe as if they were produced in the U.S., he said. — Chris Clayton, DTN