AFX - Asia | October 11, 2001
BEIJING - The US has accused China of breaking WTO rules and imposing unfair trade restrictions on imports of soybeans that could cost American farmers up to 1 bln usd in lost exports this year. David Hegwood, special counsel to US Agriculture Secretary Ann Veneman, said exports to China have virtually dried up as a result of problems relating to the government's new regulations on imports of genetically modified products and the quarantine and inspection procedures applied to US soybeans. Hegwood has been in Beijing this week for talks with Chinese trade, agriculture and quarantine officials in an attempt to resolve the dispute before US President George W. Bush and his Chinese counterpart Jiang Zemin meet next week in Shanghai at the APEC summit.
However, Hegwood told journalists at a briefing here that although President Bush was aware of the issue, he could not say whether it would be raised during the meeting.
"I can't say for certain whether he will raise it or not, but it's something he is aware of."
He said the quarantine and inspection procedures were being applied "in a manner which is inconsistent with the obligations that China will undertake as a member of the World Trade Organisation".
Although China is not expected to formally enter the WTO until later this year or early next year, Hegwood said the US may pursue the issue through the global trade body's disputes procedure.
"That's certainly an option," he said, although he would not comment on any retaliatory measures the US might take. "Right now we will continue our discussions with the Chinese in the hopes of resolving this as quickly as possible. Beyond that I can't really speculate on what further actions we might take."
China announced new rules governing imports of genetically modified soybeans in June but has not yet issued details about how they are to be implemented, creating uncertainty for both importers and exporters, particularly US traders, whose main shipping season starts around July/August and continues through till April, Hegwood said.
"Everything that comes in on contracts after June 6 is subject to the new regulation, but noone knows what the regulation says. So noone can ship under a contract dated after June 6, which basically means anything from the US." He said Chinese quarantine officials are now holding ships in ports for several days to two weeks while they perform testing. This uncertainty has left US shippers unwilling to ship.
"Last year soybean exports to China were valued at 1 bln usd, but this year, since July, there have been no imports of US soybeans and we are now entering peak harvest and shipping season in the US. This season exports on a worst case scenario could be zero."
Hegwood said China is not the first country to implement a new regulation for genetically modified imports after it has already allowed the products into its country.
"But this is the first time where we face the possibility that our exports will be cut off while the safety assessments are done. Other countries such as Australia, New Zealand and South Korea have allowed exports to continue as those safety assessments are carried out."
He said the US wanted a grace period to allow the soybeans into China while the necessary safety assessments were undertaken under the new regulation. "There is no evidence that these are anything but unfair trade restrictions, specifically the quarantine and inspection procedures. We see no evidence that these are scientifically justified, at least in the manner in which they are being applied now. "Our desire is that the Chinese government lift these restrictions immediately so we can resume our soybean exports to China."AFX - Asia:
