As complex as the world trading system has become, it still fundamentally relies on something as simple as trust — that nations and people will be as good as their word.
Most basically, it requires that those who enter into mutually agreed upon contracts will not violate those contracts whenever they see it in their short-term advantage to do so.
Unfortunately, we are now faced with more evidence that China has yet to fully embrace this concept.
The latest instance of Chinese misbehavior has to do with an innovative new GMO corn — called Viptera — that was created to withstand insect devastation. It is so popular with farmers that it now accounts for some 10 percent of all corn in the United States, according to media reports. I have grower friends who use it on their corn acres.
As with all GMO varieties, the trait went through an exhaustive regulatory process ensuring its safety — both in the United States and key growing and grain-importing countries around the world — and is now relied on by farmers and consumers in the European Union, Latin America and Japan, as well as the U.S. For reasons known only to the Chinese government, however, it has so far been unwilling to complete this trait’s review.
Until recently, that fact had not prevented the Chinese from importing tens of thousands of tons of Viptera corn, which by the nature of the distribution process is, practically speaking, inseparable from other corn. Suddenly in November, however, the Chinese started turning away corn shipments in which the trait was detected.
Many have speculated on the reasons behind this latest Chinese action. But the simplest explanation is probably the best: China simply wants out of the corn contracts it signed when the price of corn was higher than it is today.
This year’s bumper harvests mean that global prices have already dropped by some 40 percent. Meanwhile, the Chinese appetite for imported corn continues to grow, from 5.23 million tons last year to an expected 7 million in 2013-14.
One thing is for certain: The issue is not GMOs or supposed concerns about their safety. Almost all the corn China imports from the U.S. is genetically modified in one way or another, and even while turning away ships with U.S. corn, China continues to accept shipments with the Viptera trait from Argentina.
U.S. Agriculture Secretary Tom Vilsack traveled to China in December in order to suggest to the Chinese that they fix their regulatory approval process, which doesn’t even begin until a producing country has finished its own. As part of that, he discussed a pilot project between our two nations in which the Chinese would start their regulatory review “in synchrony” with the U.S., so the entire world wouldn’t have to wait an extra two years — which is how long it takes in the best of circumstances — to bring innovative new traits to market.
The bigger issue is one that Secretary Vilsack could probably only hint at: It’s time for the Chinese to start acting responsibly on the world stage. China enjoys a huge trade surplus with the United States, and it should respect the fact that fair trade goes both ways.
China’s actions create huge uncertainties and costs in our global trading system and threaten to undermine the kind of technological innovation in agriculture that will allow us to feed a growing, calorie-hungry world population — much of which happens to reside in China.
The ultimate message should be this: that innovation must go forward, regardless. Western growers and technology innovators can’t allow the bad actions of one nation to hold back progress for the rest of the world.
John Block was Secretary of the U.S. Department of Agriculture from 1981-1985, where he played a key role in the development of the 1985 Farm Bill.