Groups Seek China Trade Action

The grain and oilseed industries of the U.S., Brazil and Argentina have temporarily put aside their rivalry in world export markets and have banded together to fight what they see as increasingly flagrant violations of international trade rules by China.

A coalition of six trade associations, representing the grain export and soybean processing industries of the three countries, have called upon their respective governments to work together to eliminate ongoing trade restrictions imposed by China in violation of its World Trade Organization (WTO) commitments.

In a letter to President Bush, President Nestor Kirchner of Argentina and Brazilian President Luiz Inácio Lula da Silva, the associations expressed “profound concern” that recent actions by Chinese officials disregard WTO commitments for established sanitary and phytosanitary procedures and “ultimately threaten all global agricultural trade".

The letter referred specifically to AQSIQ (General Administration of Quality Supervision, Inspection and Quarantine) announcement 73, which it says “unilaterally imposes new and additional standards” to imports of agricultural products and “expressly rejects” internationally accepted sampling and testing procedures. AQSIQ announcement 73, which took effect on July 1, requires that quality-control inspections for all types of goods take place in the port of entry rather than the port of origin. Under that regimen, exporters will only know if their goods are accepted once they are in China.

The industry coalition also asserts that the latest Chinese actions were preceded by other “abuses” under “the guise of protective health measures” which supported Chinese private sector efforts to avoid contractual obligations relating to three months of commitments to buy Brazilian soybeans.

The associations urge the U.S., Brazilian and Argentine governments to establish a technical working group to consider science-based practices to guide the establishment of technical, environmental, plant, animal and human health policy related to world agricultural trade.

“The initial charge of such an effort should be to address the appropriateness of the current Chinese actions and to make specific recommendations on standards to address Chinese concerns,” the letter states.

The associations also ask each government to immediately begin examining the legality of China’s current and past actions and following such an investigation, “to move forward jointly to address this indiscretion under the WTO process.”

Finally, the associations suggest that consideration be given to the inclusion of additional governments in “any actions in this regard”.

Editors note: Richard Brock, The Corn and Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

To see more market perspectives, visit Brock's Web site at www.brockreport.com.