If anyone had any illusions concerning China’s WTO membership, recent events should have dispelled them. Drooling suits are now wiping themselves clean and taking a good look at semi-accurate translations of semitransparent regulations the Chinese Ministry of Foreign Trade and Economic Cooperation (MOFTEC) released earlier this month concerning the import of soybeans.
The issue of China’s compliance with WTO rules and the transparency of China’s new trade laws the drafting of which are the “top priority of this year,” according to China’s WTO watchdog, Wang Zhongfu, minister of the State General Administration for Industry and Commerce is going to be a headache for any and all who want to do business in China.
Not only are MOFTEC’s edicts indecipherable and/or vague, but also the central government has no control over how local authorities implement (or do not implement) any new legislation. So what Beijing says is OK, Sichuan will veto but not openly and in a court of law or on the floor of the Provincial Congress (which doesn’t exist, as far as the drooling suit is concerned). A veto in China is more informal and more potent: no one talks to you, no matter what documents you prepare, roadblocks in the form of applications for this and licenses for that pop up, expenses mount until finally someone else gets the contract.
Or as in the case in Mongolia, they throw you in jail. Or as in the case in Nanjing, workers take over your hotel room and demand payment basically the legal system still operates based on whim, caprice and power and not actual rule of law. But for those who remain convinced that the regulations will eventually mean something after China produces its own legions of lawyers determined to revamp the system, look to www.isinolaw.com, where you can buy a reference guide through China’s Law Forest for a few thousand bucks. Sites such as these, offering legal clairvoyance, are becoming more and more common as foreign businessmen become more and more confused.
Back to soybeans:
The new regulations demand that all imported soybeans be tested for any genetically modified ingredients, and if GMOs are found, the product must be labeled accordingly. Also, the importer must receive a certificate from China’s Ministry of Agriculture as well as a certificate stating that the soybeans are also marketed in the country from which they originate.
This must be done by March 2002
Naturally, the US soybean crop is almost completely genetically altered. To make matters worse, different beans with different levels (and types) of genetic “improvement” find themselves in the same batch. Needless to say, US soybean growers are none too pleased, the 50% stake they had in the market will evaporate under the new regulations.
Of course, this has more to do with Chinese domestic soybean production than it does with the CCP’s concern for its citizen’s health. With agricultural subsidies down almost 20% and soybean imports from the US, Argentina and Brazil pouring in, China felt the squeeze and acted to protect the historically Chinese product from foreign domination.
It is interesting to note that the Chinese government has placed high hopes in its own GMO agriculture, working hand in hand with Monsanto, while developing its own GMO rice and cotton. Rather than “Go Green” and take a stab at the organic produce market, which would somewhat justify the regulations announced January 7 concerning soybeans (and perhaps gather a whole chunk of supporters it never had: Indian farmers, Seattle coffee-shop kids, Minneapolis West Bankers ), China has decided to do as the Big Boys do and use bogus regulations to stall the demise of domestic industry.
The regulations in themselves are unique and rather groundbreaking, surpassing the EU for strictness and far outshining anything US opponents of GMO crops have ever dreamed of. Unfortunately, the MOFTEC people don’t really mean it its all a means toward a different end.
Another sign that China’s WTO membership is shaping up to be an interesting one is the conflict arising between the “Quad” as the real leaders of the WTO (US, EU, Japan and Canada) are dubbed and the Chinese delegation over who gets to chair the Trade Negotiations Committee. The TNC lords over the talks that began with the WTO Ministerial in Doha. All items that the participants in Doha agreed were important and worthy of discussion will now be deliberated over the next three years with the TNC acting as the guide and organizer.
China wants the guidelines of the talks to be discussed before a chair is selected, while the Quad wants a chair to be selected so that guidelines can be discussed
Now the WTO is about as democratic as the next institution (as in, it isn’t democratic at all). All decisions are made through consensus and informal talks. Which translates into: the Big Boys get together and decide what will happen, and they dangle carrots in front of enough Little Guys to build a consensus.
Many developing countries don’t have the resources to produce a large, competent and informed delegation, so those who can make the rules. China’s delegation is in the dozens and climbing and those people are quite competent, their leader being Sun Zhenyu, Deputy Minister of Foreign Trade and Economic Cooperation. Sun dealt with US and Oceania matters in his capacity as Deputy Minister.
China plans to use this strength to challenge to status quo in the WTO. By insisting on a clear set of guidelines before a chair is selected, China in effect bypasses the chair and forces whomever it may be (usually the director-general, in this case Mike Moore) to act as a sideline player instead of dictating from on high. China is supported by a several developing countries that have considered Moore to be a pawn of the Quad in the past.
Both soybeans and the TNC chairmanship put China and US on the same street headed different ways we’ll see how long killing terrorists keeps them from each other’s throats.