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Trade, Investment, Safety, and Innovation Hearing Before HEARING ON CHINA'S AGRICULTURAL POLICIES: TRADE, INVESTMENT, SAFETY, AND INNOVATION HEARING BEFORE THE U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION ONE HUNDRED FIFTEENTH CONGRESS SECOND SESSION THURSDAY, APRIL 26, 2018 Printed for use of the United States-China Economic and Security Review Commission Available via the World Wide Web: www.uscc.gov UNITED STATES-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION WASHINGTON: 2018 U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION ROBIN CLEVELAND, CHAIRMAN CAROLYN BARTHOLOMEW, VICE CHAIRMAN Commissioners: HON. CARTE P. GOODWIN HON. JAMES TALENT DR. GLENN HUBBARD DR. KATHERINE C. TOBIN ROY D. KAMPHAUSEN MICHAEL R. WESSEL HON. JONATHAN N. STIVERS DR. LARRY M. WORTZEL The Commission was created on October 30, 2000 by the Floyd D. Spence National Defense Authorization Act for 2001 § 1238, Public Law No. 106-398, 114 STAT. 1654A-334 (2000) (codified at 22 U.S.C. § 7002 (2001), as amended by the Treasury and General Government Appropriations Act for 2002 § 645 (regarding employment status of staff) & § 648 (regarding changing annual report due date from March to June), Public Law No. 107-67, 115 STAT. 514 (Nov. 12, 2001); as amended by Division P of the “Consolidated Appropriations Resolution, 2003,” Pub L. No. 108-7 (Feb. 20, 2003) (regarding Commission name change, terms of Commissioners, and responsibilities of the Commission); as amended by Public Law No. 109- 108 (H.R. 2862) (Nov. 22, 2005) (regarding responsibilities of Commission and applicability of FACA); as amended by Division J of the “Consolidated Appropriations Act, 2008,” Public Law Nol. 110-161 (December 26, 2007) (regarding responsibilities of the Commission, and changing the Annual Report due date from June to December); as amended by the Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act for Fiscal Year 2015, P.L. 113-291 (December 19, 2014) (regarding responsibilities of the Commission). The Commission’s full charter is available at www.uscc.gov. ii May 7, 2018 The Honorable Orrin Hatch President Pro Tempore of the Senate, Washington, DC 20510 The Honorable Paul Ryan Speaker of the House of Representatives, Washington, DC 20515 Dear Senator Hatch and Speaker Ryan: We are pleased to notify you of the Commission’s April 26, 2018 public hearing on “China’s Agricultural Policies: Trade, Investment, Safety, and Innovation.” The Floyd D. Spence National Defense Authorization Act for 2001 § 1238, Pub. L. No. 106-398 (as amended by the Carl Levin and Howard P. “Buck” McKeon National Defense Authorization Act for Fiscal Year 2015 § 1259b, Pub. L. No. 113-291) provides the basis for this hearing. At the hearing, the Commissioners received testimony from the following witnesses: Ambassador Darci Vetter, General Manager, Public Affairs, Edelman, Former Chief Agricultural Negotiator for the Office of the United States Trade Representative; Dr. Fred Gale, Senior Economist, Economic Research Service, U.S. Department of Agriculture; Bill Westman, Senior Vice President of International Affairs, North American Meat Institute; Thomas Sleight, President and CEO, U.S. Grains Council; Dr. Carl Pray, Professor of Agricultural and Resource Economics, Rutgers University; Nathan Fields, Director of Biotechnology, National Corn Growers Association; Dr. Holly Wang, Professor of Agricultural Economics, Purdue University; and Michael Robach, Board Director Chairman, Global Food Safety Initiative and Vice President for Food Safety, Cargill. The following submitted statements for the record: Dr. David Ortega, Assistant Professor of Agricultural, Food, and Resource Economics at Michigan State University; American Soybean Association and U.S. Soybean Export Council; Howard Minigh, President, CropLife International; and Joseph Damond, Executive Vice President for International Affairs, Biotechnology Innovation Organization. The hearing investigated China’s food policies and how they affect the United States. It examined China’s food security and agricultural trade policy, China’s investment in food resources abroad, the impact of China’s biotechnology policies on U.S. firms and farmers, and export opportunities for U.S. food and agricultural firms in China. It also probed food safety challenges in China and how the United States should respond to food safety and market conditions in China. We note that the full transcript of the hearing is posted to the Commission’s website. The prepared statements and supporting documents submitted by the participants are now posted on the Commission’s website at www.uscc.gov. Members and the staff of the Commission are available to provide more detailed briefings. We hope these materials will be helpful to the Congress as it continues its assessment of U.S.-China relations and their impact on U.S. security. The Commission will examine in greater depth these issues, and the other issues enumerated in its statutory mandate, in its 2018 Annual Report that will be submitted to Congress in November 2018. Should you have any questions regarding this hearing or any other issue related to China, please do not hesitate to have your staff contact our Congressional Liaison, Leslie Tisdale, at 202-624-1496 or [email protected]. Sincerely yours, Robin Cleveland Carolyn Bartholomew Chairman Vice Chairman cc: Members of Congress and Congressional Staff iii CONTENTS THURSDAY, APRIL 26, 2018 CHINA'S AGRICULTURAL POLICIES: TRADE, INVESTMENT, SAFETY, AND INNOVATION Opening Statement of Senator Carte Goodwin (Hearing Co-Chair) .........................................................................................................6 Prepared Statement ...........................................................................................................8 Opening Statement of Chairman Robin Cleveland (Hearing Co-Chair) .........................................................................................................9 Prepared Statement .........................................................................................................10 Panel I: China’s Food Security Policies and U.S.-China Trade in Agriculture Panel I Introduction by Chairman Robin Cleveland (Hearing Co-Chair) .......................................................................................................11 Statement of Ambassador Darci Vetter General Manager, Public Affairs, Edelman; Former Chief Agricultural Negotiator for the Office of the United States Trade Representative ....................................................12 Prepared Statement .........................................................................................................15 Statement of Dr. Fred Gale Senior Economist, Economic Research Service, U.S. Department of Agriculture .......27 Prepared Statement .........................................................................................................29 Statement of Bill Westman Senior Vice President of International Affairs, North American Meat Institute ...........36 Prepared Statement .........................................................................................................38 Statement of Thomas Sleight President and CEO, U.S. Grains Council .......................................................................77 Prepared Statement .........................................................................................................80 Panel I: Question and Answer............................................................................................86 Panel II: Chinese Biotech Policy and Food Safety Panel II Introduction by Senator Carte Goodwin (Hearing Co-Chair) .....................................................................................................108 Statement of Dr. Carl Pray Professor of Agricultural and Resource Economics, Rutgers University ....................109 Prepared Statement .......................................................................................................112 Statement of Nathan Fields Director of Biotechnology, National Corn Growers Association ................................124 Prepared Statement .......................................................................................................127 Statement of Dr. Holly Wang Professor of Agricultural Economics, Purdue University ............................................134 Prepared Statement .......................................................................................................137 iv Statement of Michael Robach Board Director Chairman, Global Food Safety Initiative and Vice President for Food Safety, Cargill ...............................................................................................................151 Prepared Statement .......................................................................................................153 Panel II: Question and Answer ........................................................................................162 STATEMENTS SUBMITTED FOR THE RECORD Statement of Dr. David Ortega Assistant Professor of Agricultural, Food, and Resource Economics at Michigan State University .....................................................................................................................183 Statement of American Soybean Association and U.S. Soybean Export Council ...........197 Statement of Howard Minigh President, CropLife International .................................................................................201 Statement of Joseph Damond Executive Vice President for International
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