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US Conflict with China over GMOs

"The greatest danger to America's dominant position today is not
Islamic fundamentalism. It is the arrogance of American power."
London Times, 7 Feb 2002
http://www.thetimes.co.uk/article/0,,258-2002062638,00.html

Biotech firms mull action against China over GMOs
CHICAGO, Feb 6 (Reuters) -

Two big biotechnology-related companies are ready to take action
against China if it goes ahead and implements controversial rules
on genetically modified organisms, or GMOs, a U.S. lawyer
said on Wednesday.

China plans to implement the rules -- which could curtail the $1
billion in annual sales of U.S. soybeans -- on March 20.

William DiSalvatore, a partner in the New York law firm Hale and
Dorr, said the regulations would deprive the firms, which he declined
to name, of business in the world's most populous country.

"My clients will consider some form of action if the rules are
implemented on March 20 because they are a barrier that will impede
trade," he told Reuters in an interview, adding that one of the companies
is based in the United States and the other in Europe.

He did not specify what type of action might be taken.

"There are other things (possible actions) apart from court
action, but I am not at liberty to say," he said.

DiSalvatore, who was lead counsel in a patent dispute relating
to GMOs in the United States, spoke as U.S. officials held meetings
with their Chinese counterparts to clarify the rules.

The regulations require exporters of genetically modified foods
to China to apply for safety certificates stating that the goods are
harmless to humans, animals and the environment.

U.S. grain industry sources have accused China of using the
rules to stem the surge in soybean imports. China accounts for nearly
one-quarter of total world soybean imports, and its business is worth
about $1 billion to the United States.

The United States is the world's largest producer and exporter of
soybeans, and nearly 70 percent of the soybeans grown in the country
are genetically modified.

Exports of U.S. soybeans to China have slowed in recent weeks
amid uncertainty over how the government will implement the regulations,
and a lack of clarity over testing standards and tolerance levels for
cargoes of transgenic goods.

DiSalvatore said it was too early to assess potential financial
losses his clients could suffer due to the rules.

Beijing's regulations might prove temporary or be modified once
China is able to produce its own varieties of genetically modified
crops without foreign technology, he said.

"The suspicion is those regulations are going to be temporary.
Maybe they'll stay for a year. Once China develops a rice variety,
then they will modify the rules ... once they have the advantage," he said.

DiSalvatore said China's attempt at developing an indigenous
biotechnology industry was evident in its plans to ban new foreign
investment in the development and manufacture of seeds of genetically
modified plants.

A draft government document showed China also planned to limit
foreign investment in the production of cereals, potatoes, cotton and
oilseeds.

"If China is going to shut down foreign investment in GMOs, it
will be very difficult for all of the big players in the ag biotech industry
to focus on that market," DiSalvatore said.

DiSalvatore said he would advise his clients to get strong patent
protection in the United States and Europe in the event China is in
the process of developing a particular transgenic product and hopes to
sell it in the United States.

"That could be an act of infringement in the United States," he
added.

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