China's approval process for biotech crops is beset by regulatory hurdles and delays that have cost U.S. companies billions of dollars and added to challenges for American farmers.
Industry groups and members of Congress have been urging the Trump administration to press China to make its regulatory process for approving agricultural biotech products more transparent and timely.
High-level talks earlier this month in Washington between Chinese and U.S. negotiators touched on a variety of nontariff barrier issues. A spokesman for China's Ministry of Commerce, Gao Feng, told reporters Thursday the talks achieved "new progress," adding that technology transfer and intellectual property were among the issues discussed.
Chinese regulatory policies on genetically modified organism seeds are seen as protectionist and favoring domestic development and commercialization of agricultural biotechnology, according to industry observers. Beijing is believed to have spent over $3.5 billion on biotech crop research to help develop its domestic industry.
"The GMO approvals protocols are very oblique and yet have been a huge problem for the U.S.," said Joseph Glauber, a former U.S. Department of Agriculture chief economist and now a senior research fellow at the International Food Policy Research Institute in Washington.
The financial impact of delays in Chinese approval of U.S. biotech crops is estimated to have resulted in direct impact of nearly $5 billion over five years, according to a study commissioned by the industry trade group CropLife International. When including the "ripple effects" to the overall U.S. economy, the report by researcher Informa estimated impacts topping $14 billion.
In January, China's Ministry of Agriculture and Rural Affairs approved five new biotech traits for imported crops, including varieties of soybeans from Bayer and DowDuPont. It was agency's first approvals since mid-2017 and came during a round of trade talks in Beijing between U.S. and Chinese officials.
"We are encouraged that systemic improvements in the regulatory process in China remain an important focus in ongoing negotiations," said Christi Dixon, a spokesperson for Bayer, which last year completed the acquisition of U.S. seed giant Monsanto. "We support the goal of these negotiations - enabling a predictable, timely, transparent and science-based process that fuels both global innovation and trade."
Added Dixon, "A predictable global regulatory system is essential in ensuring companies can continue to deliver new innovations to farmers around the world in a predictable and timely way."
Genetic traits in seeds have been developed to improve yields and be more resistant to pests, diseases and adverse weather conditions such as drought. Seed companies also have engineered crops to be resistant to weedkillers or herbicides.
Regardless, American farmers have been hesitant to buy GMO seeds not approved by Beijing because the Chinese have historically been large buyers of U.S. agricultural commodities, including soybeans and corn. For example, the Chinese government in the past has turned away corn when it was found to have contained new biotech traits not approved by Beijing.
"Our farmers can't grow certain crops that would perform better under current conditions because they can't sell it into China," said Michael Nepveux, an economist with the American Farm Bureau Federation, a Washington-based trade group. "We had an issue where China detected a certain biotech event in a corn shipment ... and China went ahead and shut down the imports, which was a huge impact to the industry."
Among the leading GMO crops are soybean, corn, canola, cotton and alfalfa. Prior to the trade war and retaliatory tariffs from Beijing, the Chinese were buying about 60 percent of U.S. soybean exports, including most of it GMO soybeans to feed the Asian country's hungry herd of hogs.
According to experts, some biotech products have waited more than six years for approval in China, and they insist there is no scientific basis for these lengthy delays. Also, Beijing agreed more than a year ago to make changes after being pressed, but sources insist the regulatory process has, in fact, become less transparent and less predictable.
At the same time, industry executives insist China's biotech approval process and government policies now are more tilted to favor their own interests over other countries.
For one, Beijing doesn't accept plant trials done abroad so U.S. companies have seen added hurdles and delays. Also, foreign companies are barred from conducting biotech research or biotech seed production in China.
"The history here suggests this has been a sticking point and probably will continue to be," said Matthew O'Mara, vice president of international affairs and trade policy for the Biotechnology Innovation Organization, a Washington-based trade group that represents some of the largest biotech seed companies. "It's not only in the United States' interests, but it's globally an interest for China to adopt a system that facilitates trade.