Ambassador Allen Johnson, Chief Agriculture Negotiator for the Office of the United States Trade Representative Outlines Discussions on China's New Biotechnology Regulations.

March 7, 2002

Statement by Ambassador Allen Johnson
Chief Agriculture Negotiator for the Office of the United States Trade Representative

Beijing, China

As you know, President Bush visited China last month where a major part of his discussions with Chinese leaders was agriculture and the importance of biotechnology. This is the second time in 5 months the President has been in China discussing these issues.

Ambassador Zoellick has been very interested in these issues including working with Minister Shi last October in developing an understanding on how trade would continue before China issued its biotechnology implementing regulations.

Ambassador Zoellick asked me to come to China this week to follow-up on discussions between President Bush and Chinese President Jiang and Premier Zhu on China’s new biotechnology regulations. Working closely with our Ambassador here, Sandy Randt, and his embassy team we have raised this issue a number of times in the past months. We want to ensure that trade is not disrupted after these biotechnology regulations are implemented on March 20.

China is a very important market for US agriculture with 1.3 billion people, one-fifth of the world’s population and significant economic growth of over 7% annually. Our soybean exports to China amounted to over $1 billion last year and China’s WTO accession offers the potential for significant new trade in a broad range of agricultural products.

But while there are opportunities there are also challenges. China is moving from a formally closed economy to a more open and market-oriented economy. All difficulties related to this transition will not be resolved overnight.

This was also an opportunity to highlight the benefits to the Chinese people that low-cost, high quality biotech agricultural products offer. It is important to also recognize that China is a major user and developer of biotechnology.

Today our interagency team, including USTR, USDA and State, held meetings with a Chinese interagency group. This group was composed of officials from MOFTEC, MOA, and AQSIQ. The Chinese side was led by MOFTEC Vice Minister, Ma Xiuhong.

Our concerns have focused on a general lack of information on the regulations since they were first published last June. This could result in disruption in trade of U.S. biotech farm products. We were concerned that China’s regulations were not transparent, discriminatory, more restrictive than necessary and that companies would not be able to complete the application process in time to meet the Chinese deadline. We still have questions regarding their compatibility with China’s WTO obligations.

I would characterize our meetings as cordial, but serious, with both sides getting down to business quickly.

Both sides agreed from the outset to focus on the immediate consequences to trade of China’s new biotechnology regulations which are due to go into effect March 20. This follows up on discussions two weeks ago between President Bush had with Premier Zhu.

Our goal for this meeting was to identify interim measures to ensure there are minimum disruptions of trade and begin a broader dialogue on regulations themselves that would recognize China’s objectives for the regulations without disrupting trade and be consistent with WTO obligations. Specifically, we look forward to further discussions on the approvals process, shipment documentation, testing and verification and labeling requirements.

We feel these objectives have been met.

China recognized that we have legitimate concerns and sees the need for some form of interim arrangement. China is developing an interim arrangement to reduce trade disruptions and address our specific concerns including approvals, market access, and labeling.

We were able to discuss their proposed arrangement and ask numerous, clarifying questions. We also provided the Chinese with suggestions that targeted our chief concerns.

Our expectation is that the interim arrangement will allow trade to continue, if implemented as described to us today. Specifically, if the product has completed the regulatory review in exporting countries and has initiated the approval process in China, imports should be allowed under China’s system. We believe U.S. soybeans, corn, cotton and processed products should have access to China’s market.

China also agreed with us regarding the importance of follow-on discussions regarding the regulations. It was agreed that our two sides would meet again soon to discuss many of the outstanding technical issues with the regulations, including their consistency with China’s WTO obligations.

Vice Minister Ma told me today that China will publish a bulletin with the details of the arrangement very soon, and before the biotechnology regulations are scheduled to take effect.

I also took the opportunity to raise our serious concerns regarding China’s continued failure to implement their WTO commitment to issue tariff-rate quota (TRQ) for agricultural products and fertilizer.

I am encouraged by our discussions today and look forward to continued cooperation with China on biotechnology and other agricultural trade issues.