October 20, 2011
A sharp rise in US corn exports to China this year has sparked off a discord between genetically modified (GM) corn seeds developers and US grain exporters, sources said.
Central to this dispute is the fact that the US often grants approval for new GM varieties before other trading partners like China follow suit. US corn exporters typically buy both GM and non-GM corn from producers and then store them together in warehouses prior to export, as strict separation would increase their costs.
Domestically, this poses no problem because commercialisation of a particular GM seed does not occur before it has been approved in the US. But for exports to China and elsewhere, corn exporters have to consider whether a corn shipment may get rejected because it contains some GM corn not approved for consumption in that foreign country.
In order to guard against that possibility, industry groups look to discourage commercialisation in the US of GM corn seeds until major foreign partners like Japan have also approved them. The problem now dividing the industry is whether China, with its new interest in US corn, should now be considered such a "major" partner.
US biotechnology companies eager to commercialise their products argue that US growers should not have to wait for China to approve new GM varieties before growing them in the US, as its regulatory process is unnecessarily long and complicated.
Grains industry groups like the North American Export Grain Association (NAEGA) are now arguing that biotechnology firms should first win approval in China, and other countries as well, before they commercialise new GM seeds for commodities like corn.
Biotechnology companies and groups like the National Corn Growers Association (NCGA), which represents the corn growers themselves, disagree, arguing that growers should only have to wait until a shorter list of major markets that does not include China approves the GM variety before launching production in the US.
The industry is still talking internally on how to resolve this issue. China has a zero-tolerance policy for unapproved GM materials, meaning that shipments could be rejected even if they contained only a small percentage of unauthorised corn. At the same time, it is unclear whether it actually tests incoming shipments of commodities, industry sources said.
This issue came to a head in a legal case launched in August by Syngenta Seeds, a biotechnology company, against Bunge North America, which is a grains company that refused to purchase harvested loads of the GM "Viptera" corn that had been grown by US corn farmers, as it has not got import approval from China.
NAEGA, reflecting the interests of exporters, in September 2010 pressed the Biotechnology Industry Association (BIO) to change its policy to include China in its definition of "minimum markets in which regulatory requirements should be met prior to commercialisation" of a new GM seed.
"The negative consequences of overly aggressive commercialisation of biotech-enhanced events by technology providers are numerous, and include exposing exporting companies to financial losses because of cargo rejection, reducing access to some export markets, and diminishing the United States' reputation as a reliable, often-preferred supplier of grains, oilseeds and grain products," said NAEGA in a joint statement issued with the National Grain and Feed Association (NGFA) on the Bunge-Syngenta case.
BIO, in an October 4 submission to the Office of the US Trade Representative (USTR), criticised China's policy of not accepting applications for import authorisation of a new GM product until it has first been approved in an exporting market. In the case of Viptera, Syngenta received approval in Brazil before submitting an application to China.
"This measure promotes asynchrony in the international approval process and increases the chance of a situation where a low-level presence (LLP) of an unapproved product is included in a shipment to China," BIO wrote. "China does not have a policy on LLP, therefore increasing the risk of significant trade disruption."
Referring to China's requirement that a product first be approved in a producer country, USTR said it worries that this "creates an automatic delay in China's biotech approval process that may lead to significant disruption in exports of US biotechnology products that are approved for marketing in the US but not yet eligible for use in China."