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GMO rules raise fears of more barriers
2002-01-22
China Daily
Technical barriers are likely to greater influence China's agricultural sector which is feeling the pressure of rising imports following the nation's entry to the World Trade Organization (WTO).
China's newly elaborated rules on genetically modified organisms (GMO) have raised eyebrows among overseas traders, who fear that a future proliferation of technical barriers will stop their exports from reaching the market.
China's Ministry of Agriculture (MOA) released details on the implementation of its first statute on GMOs two weeks ago, which was enacted last June.
The rules, covering safety inspection certificates, import classification and labelling of GMO products, will take effect on March 20.
"China's safety certification format is fair and in line with international practice and WTO rules," said Fang Xiangdong of the MOA's newly created GMO Safety Office, which will administer the issuance of safety certificates of GMO products.
"It is not clear how the regulations will influence trade in the coming months," Fang said when asked to comment on the new policy's potential impact on China's agricultural trade. "The rules are not about trade, but about technical things."
Fang emphasized the policy was aimed at protecting the health of people, animals and the environment while pushing for agro-biotechnology research.
Tang Yanli, a senior expert from the MOA's Information Centre, agreed with Fang while admitting the importance of technical barriers to a WTO member.
"After its WTO entry, China should turn to more technical measures to better protect the domestic market similar to those adopted between current members of the global trade club," said Tang.
Some foreign traders claim China is likely to seek ways to protect its huge farm population since it has pledged to increase imports vastly and lower duties under a new tariff-rate-quota system.
The duty for agricultural produce is estimated to fall from a current level of 22 per cent to 17 per cent in 2004.
Analysts and farm traders said major GMO exporters - including the United States, Argentina, Canada and Australia - are expected to be affected.
They added the new rules are likely to influence the trade of such products as genetically modified soybeans, corn, rape seed, cotton and tomatoes and vegetable oils, which are categorized as the first lot of GMOs to fall under the administration of the new rules.
"It will cost traders more and take them longer to get GMO products labelled, obtain safety certificates, approval documents and pay quarantine fees," said Tang.
"Thus, it will bring about a wider price gap between the GMO and non-GMO products, which is presently around 15 to 20 per cent," Tang said. This might result in a decrease in imports of GMO products in 2002, she added.
The United States, a major GMO soybeans supplier, agreed that the regulations are "very technical" and will analyze them very closely, according to Joseph Bookbinder, a US embassy spokesman.
Resulting confusion over the rules since June last year brought orders of US soybeans -70 per cent of which are bio-engineered - to a virtual halt in July and August 2001 as buyers worried cargo might not pass the stricter regulations.
China is the major destination of the US GMO soybeans. China bought huge amounts of soybeans in the past two years due to a short supply.
The United States shipped 1.9 million tons of soybeans to China between September 1 and December 6, 2001, according to Phillip Laney, chief representative of the American Soybean Association.
"The shipments were possible thanks to an interim arrangement reached by the two countries," said Laney.
The United States began to grow GMO soybeans in 1996, primarily developed by the agro-chemical company Monsanto, who declined to comment on China's new policy.
Tang told Business Weekly that China is expected to import substantial shipments of soybeans this year but the quantity will probably be lower than last year or even 2000. China's soybeans imports amounted to 12.8 million tons during the first 10 months of last year, and 10.42 million tons in 2000, according to customs statistics.
"Soybeans prices on the domestic market might pick up between April and June as imports are likely to fall after the implementation of the new rules on March 20," said Tang.
"Between July and September, prices will be determined by imports."
Futures market prices for soybeans surged in the three days following the release of the new details on the GMO rules' details on January 7, according to analysts from Dalian Commodities Exchange.
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