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7-Business: US and China resolved emerging GMO soy dispute



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TITLE:  US-China soybean trade tiff resolved-US farm group
SOURCE: Reuters, by Richard Cowan
DATE:   October 24, 2001

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UPDATE - US-China soybean trade tiff resolved-US farm group

WASHINGTON - A trade dispute between the United States and China over 
genetically modified foods has been resolved, opening the door for renewed 
sales of U.S. soybeans to China, a U.S. farm group official said this week. 
"Indeed, the issue with biotech (regulations) is resolved," said Stephen 
Censky, chief executive of the American Soybean Association, which is based 
in St. Louis. U.S. Trade Representative spokesman Richard Mills confirmed 
China has, "made a proposal which it describes is designed to remove 
obstacles to U.S. exports." Mills added: "We are discussing with the 
Chinese how to implement its proposal in a way that will allow U.S. soybean 
exports to resume at normal levels."

U.S. soybean exports to China had been suspended due to confusion over 
China's rules on imports of bio-engineered foods. About 70 percent of U.S. 
soybeans are grown from genetically-modified seeds. The trade dispute was 
threatening up to $1 billion in sales of U.S. soybeans to China. In recent 
weeks, Bush administration officials have speculated China was creating 
uncertainty about its biotech rules simply to slow soybean imports and 
strengthen prices and markets for its domestic soybean growers.

Censky, in a telephone interview with Reuters, said he was informed this 
week by U.S. Agriculture Department and U.S. Trade Representative officials 
of the breakthrough. As a result, Censky said he was "still hopeful" his 
industry could achieve its goal of shipping $1 billion worth of soybeans to 
China this marketing year, which runs until Aug. 31, 2002. "China still 
needs the beans," he said. Censky said he also was "hopeful" U.S. exporters 
would not face burdensome quarantine and inspection procedures once 
shipments reach Chinese ports. In recent weeks, there have been reports 
that boats loaded with South American soybeans have faced unusual delays 
once arriving at those ports.


TRANSITION PERIOD

In early June, China announced it was imposing new controls on imports of 
genetically modified foods. But since then, the Chinese government has not 
provided any details on the safety assessments U.S. exporters must provide. 
The absence of detailed rules made Chinese importers leery of taking a 
chance on buying U.S. soybeans since it was unclear whether any shipments 
would be accepted or rejected at port. As a result, the U.S. industry asked 
for clarifying rules and a transition period for those rules to take 
effect. "They gave us the transition period we wanted," Censky said. He 
added that China has not indicated when it would produce the detailed 
regulations to enforce new rules on imports of genetically modified foods. 
"We understand from reports the Chinese are still working on those," Censky 
said.

The apparent breakthrough came after U.S. officials at the highest levels 
complained about China's trade practices. Last week in Shanghai, at a 
meeting of Asian-Pacific country leaders, President George W. Bush 
discussed the problem with Chinese leaders. Those conversations came a day 
or so after Zoellick and Chinese trade officials talked at length. Censky 
said any new purchases of U.S. soybeans will take 30-45 days to arrive at 
Chinese ports. September and October are typically heavy booking periods 
for U.S. soybeans destined for China, as the new U.S. crop is coming to 
harvest. The interruption in China trade, coupled with seasonal factors, 
has contributed to a drop in the price of U.S. soybeans. November soybeans 
closed at $4.20-1/2 per bushel in Chicago Tuesday, down from July's 10-
month high of $5.38 per bushel.



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