Business Forum: Free trade and U.S. corn are in the cross hairs

After nearly five years of review, China has finally approved importing an innovative strain of GMO corn, long after most of the world. Yet a clutch of grain traders and trial lawyers are asking American courts to give China the power to dictate when Midwestern farmers may plant new and better seeds — no matter how long or meritless the delay.

The crisis began a year ago when Chinese port officials began rejecting shipments of U.S. corn. China charged that the cargoes included trace amounts of an insect-resistant biotech corn variety. Called Viptera, it had yet to receive a Chinese import approval. The surprise move produced a significant disruption in agricultural trade.

A second surprise followed this summer. U.S. grain traders and class action lawyers filed almost 200 lawsuits but not against China. They targeted the technology company that developed Viptera: Syngenta.

Independent observers give little credence to the Chinese government's excuse for rejecting the cargoes. China accepted similar U.S. shipments from 2011 until last year and imports Viptera from both Argentina and Brazil. Analysts speculate that the Chinese wanted to support their own domestic corn producers who had just turned in a record crop and were facing dropping prices, and to protect their own biotech industry.

One Chinese official suggested as much, admitting that trade considerations play an important role in his country's biotech approval process. Reports that the recent import approval was based on shortfalls in Ukrainian production bolster this assessment. Yet WTO rules, which China has accepted, require that these decisions be based solely on science and safety. Scientists worldwide have found Viptera completely safe.

Were any other major trading nation to behave as China has, there would be universal condemnation. With China, however, such manipulations have earned little more than a shrug from the U.S. government. As Agriculture Secretary Vilsack said, "China's system is what it is. You get approvals sometimes and sometimes you don't." But it is even more troubling that U.S. grain traders are abetting the Chinese government through the courts.

Minnetonka-based Cargill has led the way. The company claims it was the developer's responsibility to ensure Chinese approval before selling Viptera seed to American farmers. Since most large grain traders (including Cargill) have not modernized their facilities and are unable to keep corn varieties totally separated, corn was mixed together as it traveled from grain elevators to dockside. China has used even the tiniest fraction of unapproved kernels as an excuse to block entire shipments.

According to Cargill and other plaintiffs, Chinese government approval should be required before sale of the new corn seed to American farmers. Forget, they insist, that Syngenta obtained approval for sale from the United States government and import approvals from other major importers, including the European Union, Latin American countries, Canada and Japan.

If successful, these suits will effectively incorporate China's bureaucratic decisions, however arbitrary or capricious, into American law. They will give China the ability to thwart marketing of new agricultural technology in the United States and throughout the world. American farmers should be able to plant U.S. government-approved seeds. They should not be denied that right by China's gamesmanship.

While Syngenta's seed is currently in the litigation cross hairs, technologies from DuPont Pioneer, Monsanto and others cannot be far behind. If Cargill and the trial lawyers are successful in imposing strict liability on the developers of new agricultural biotechnologies, they will effectively transfer to the government of China a final say in America's agricultural future. Both as a matter of law and policy, such an outcome would be disastrous. The effect on U.S. innovation would be crippling.

Giving China the power through proxy litigation to veto the sale of new and better corn in the United States and the rest of the world would be an abuse of the U.S. legal system and a threat to free trade and economic progress worldwide.

American trade officials should continue vigorously to oppose this special brand of market manipulation. Meanwhile, American courts should reject attempts to make them China's accomplices. They should dismiss the Viptera cases.