(Reuters) — Dow Chemical Co. has finally received U.S. government approval for a package of chemicals and new genetically modified crops, but now it faces a major obstacle to a US$1 billion market opportunity: Chinese import barriers.
The Asian nation has become a major buyer of U.S. corn and soybeans in recent years but has also shown mounting reluctance to accept some GM crops grown by U.S. farmers. For the last year, it has been rejecting U.S. corn shipments containing traces of a type of GM corn developed by Syngenta AG .
Now Dow, which, like Syngenta has yet to receive Chinese import approval for its new crops, faces the ire of the U.S. farm sector if traces of those crops make their way into ex-ports to China.
U.S. corn and soybean farmers have largely embraced the GM specialty crops that can tolerate treatments of herbicide and fight off harmful pests, citing enhanced ease of production of critical food, feed and energy crops.
However, while GM crop developers and other GM crop backers say many scientific studies show the crops are safe and the U.S. Department of Agriculture promotes the crops as a means to enhancing global food security, many other countries and environmental and consumer groups say the crops contribute to health and environmental problems.
Chinese consumer wariness over GMO safety has mounted recently, and at the same time, Chinese regulatory approvals have ground to a near halt. The last import approval for a GM grain was granted in June 2013.
Reluctance by Chinese regulators to approve some types of GM varieties from the United States is a significant problem for the entire U.S. agricultural sector, limiting access to a big export market.
Those involved in the effort say there is no solution in sight.
The U.S. trade representative and the U.S. Department of Agriculture have joined with U.S. agribusiness companies over the last year to increase pressure on the Chinese government to ease its stance against GM grain.
However, U.S. industry players say that with each step forward comes at least one step back.
The industry is also taking its message directly to Chinese consumers, backing a push to combat GMO wariness in the country.
Darci Vetter, chief agricultural negotiator in the office of the U.S. trade representative, said the GMO import issue is a high priority for U.S. trade negotiators.
“Trade is being blocked now. We have reached out at very high levels to China on this issue,” she said.
The industry was pushing for U.S. president Barack Obama to raise the issue with Chinese president Xi Jingping when they met in Beijing Nov. 11. U.S. agriculture secretary Tom Vilsack is slated to hold talks on agricultural trade issues with China at a meeting of the U.S.-China Joint Commission on Commerce and Trade in Chicago in December.
As well, industry officials were planning to discuss GMOs at a highly anticipated meeting of the newly formed U.S.-China Agriculture and Food Partnership in November. However, the broad-based meeting of government and private-sector representatives from the two countries has been postponed until sometime next year, organizers said.
The Obama administration and the U.S. agribusiness industry want China to change measures that they see as blocking or delaying approval of GM agricultural products. One requires a product to be approved from an exporting country before Chinese regulators will begin reviewing an application.
Dow’s application has been languishing before Chinese regulators since after Canada approved Enlist crops in 2012. The company said Chinese regulators have not indicated when a decision might be granted.
Chinese authorities used to issue regulatory decisions multiple times a year, but they have indicated they now will issue decisions on applications only once a year, according to those who have been working on the issue.
Beijing issued the last import approval for a GM grain in June 2013, said Matthew O’Mara, director of international affairs at the Biotechnology Industry Organization.
The U.S. also wants China to change a zero-tolerance approach for even low levels of an unapproved GM strain in a shipment of grain from the U.S.
Cargill sued Syngenta last month, alleging that China’s rejections of U.S. crops contaminated with the seed-maker’s unapproved GM corn had cost the exporter at least $90 million.
Meanwhile, Dow says it is designing a strategy to minimize disruption to export channels until China approves Enlist.
Industry experts warn there is a high risk that more U.S. grain sales could be in jeopardy of Chinese rejection if farmers begin harvesting Enlist grain before China improves the herbicide system for import.
China is already a large producer of GM cotton, and the country imports millions of tonnes of GM soybeans annually for pig feed. However, consumer concern about the health risks of GM crops has grown over the issue of human consumption.
In response, the industry has deployed CropLife International, the industry-funded group that promotes public acceptance of biotechnology. It has met with Chinese journalists, teachers and others who are seen as opinion influencers and is planning a China social media campaign next year.
“The Chinese government is under huge pressure because of the public perception on biotech crops,” said Michelle Chang, executive director of CropLife China’s biotech committee. “There is a lot of negative news on biotech.”