June 27,2002

Grassley, Others Urge China to Open Markets to U.S. Ag Products

WASHINGTON – Sen. Chuck Grassley, ranking member of the Committee on Finance, andother senators today urged China to stop threatening U.S. exports of soybeans, soybean products,processed food and other agricultural products. The senators wrote to the Chinese ambassador tothe United States and also wrote to President Bush expressing concern about the problem.

The text of the senators’ letters follows.

June 27, 2002
The Honorable Yang Jiechi
Ambassador Extraordinary and Plenipotentiary of the
People’s Republic of China to the United States
2300 Connecticut Avenue, NW
Washington, D.C. 20008

Dear Mr. Ambassador:

We are writing to express our strong concern about continuing difficulties related to China’sproposed use of questionable biotechnology product approval and food labeling regulations thatthreaten U.S. exports of soybeans, soybean products, processed food and other agricultural productsto China.

We are concerned that these new regulations, particularly the regulations recently proposedby China’s Ministry of Health, will completely undermine the improved market access China grantedto U.S. exports of corn, wheat, and other agricultural products when China entered the World TradeOrganization.

Earlier this year, China’s Ministry of Agriculture sought to suddenly impose scientificallyquestionable regulations on U.S. grains exports. A disruption in trade was averted through aninterim agreement on safety certification for biotechnology products that expires on December 20,2002.

Since that interim agreement was reached, China’s Ministry of Health has issued additionalapproval and labeling regulations that again threaten to cutoff our exports. We have serious concernsabout whether these regulations are compatible with China’s WTO commitments. One importantconcern is that these new regulations have not been notified to the WTO as required. Further, thenew MOH regulations are being imposed in a manner that does not provide sufficient time forclarification of their numerous ambiguities. In fact, China has not even provided guidance oncompliance with the MOH regulations, even though they take effect on July 1, 2002.

In the case of the new Ministry of Agriculture regulations, U.S. exporters are faced with timeconstraints that are entirely unrealistic. These rules require field testing of each biotech event foreach commodity as part of the complete data submission required for a safety approval before theinterim measures expire on December 20.

These requirements clearly inhibit the ability of United States exporters to complete therequired field testing in China by December 20, and it is highly likely that trade inbiotechnology-related products will end at that time, unless China modifies its regulations or the timefor compliance.

We believe that it is crucially important that trade between our two countries not be disrupted.Accordingly, we urge your government, in the strongest terms, to take appropriate steps to ensurethat implementation of these new safety regulations do not interfere with trade.


Chuck Grassley 
Max Baucus

June 27, 2002
The President
The White House
Washington, D.C. 20500

Dear Mr. President:

We are writing to express our concern about the severe market access difficulties whichcontinue to face United States agricultural exports. We are particularly concerned about the impactwhich China’s ongoing efforts to adopt new biotechnology product approval and food labelingregulations is having on our ability to export to this potentially large market.

U.S. soybean exporters have already lost an estimated $240 million worth of sales to Chinadue to the uncertainty caused by the Chinese Ministry of Agriculture’s attempt to imposescientifically questionable regulations on U.S. grain exports earlier this year. Without your timelyintervention and conclusion of an interim agreement with China, losses would have been muchhigher.

Since conclusion of the interim agreement, the Chinese government, through the Ministry ofHealth and the Ministry of Agriculture, has issued additional biotech approval and labelingregulations which again threaten to impede U.S. agriculture exports to China. We have a numberof concerns with these new requirements and regulations and question whether they are compatiblewith China’s commitments under the World Trade Organization and certainly our bilateralagreement with respect to agriculture.

For example, the new Ministry of Health regulations, which are to take effect on July 1, 2002,still have not been notified to the WTO as required. Further, there has been insufficient time for U.S.exporters to seek clarification of the numerous ambiguities inherent in the regulations. Finally, theChinese government has not provided any guidance as to how U.S. exporters are to comply with thenew regulations.

We also are concerned that the new Ministry of Agriculture regulations are also beingimplemented in an unrealistic manner. For example, Ministry of Agriculture rules now require fieldtesting for each commodity as part of the data requirements necessary for U.S. exporters which mustbe submitted before December 20, 2002, to receive the required safety approval to export to China.However, Chinese authorities are limiting the ability of U.S. exporters to import the seeds neededto complete the required field testing, clearly inhibiting their ability to complete the tests and gatherthe data needed to comply with the December 20, 2002 deadline.

Mr. President, U.S. exports of soybeans, corn, wheat, and other agricultural products, whichwere granted improved market access by China when China entered the World Trade Organization,continue to be threatened by these new regulations. Without quick resolution of these problems, U.S.agriculture producers and food manufacturers will be severely harmed.

Accordingly, we urge you to bring this matter to the attention of the Chinese government assoon as possible and empha in the strongest possible terms how critically important it is thatthese new biotech regulations not unjustly impede U.S. agriculture exports.

We will continue to work with you to ensure proper monitoring and enforcement of China’sWTO obligations and stand ready to assist you in taking the necessary steps to ensure compliance.


Chuck Grassley 

Max Baucus

Richard Lugar 

Tom Harkin