U.S. Eyes Syngenta’s Acquisition with Caution

Published Date : Mar 02, 2016

While ChemChina’s acquisition of Syngenta has been applauded by many, a top agricultural officer in the U.S. has raised his concerns over the deal stating that it might impact the global food security as China supports the genetically modified organisms made by the U.S. The deal is being seen as Beijing’s strategic move to strengthen its agricultural technologies as well as to address its food security concerns. Syngenta is largely present in the U.S. fertilizers and seeds market and hence, being scrutinized by Washington and is subjected to a voluntary national security review. Tom Vilsack, the U.S. agricultural secretary has been open about his concerns regarding the ChemChina-Syngenta deal and its impact on the U.S. competition for the Chinese market. He has further stressed about his fears regarding the treatment of innovation and biotechnology in China where politics plays an important role in shaping up of the market.

Would Syngenta Receive Preferential Treatment in China?

Syngenta is a global leader in the production of genetically modified seeds for crops such as soybeans, corn, and sugar beets. In the past couple of years, a number of fertilizers and seeds manufacturers such as Monsanto and Syngenta have struggled to get approval from the Chinese authorities to distribute genetically modified seeds across Mainland China and import crops grown from them. Interestingly, Chinese authorities have recently approved three of the twelve GMO varieties submitted for approval. Industry experts as well as the U.S. officials have pointed out that the deal is a way to protect China’s domestic biotech industry that is still at its infancy. In recent years, a number of Chinese nationals have been arrested for trying to steal GM corn and other seeds. Some officials have also stated that the approval of the Syngenta deal would lead to the Swiss company’s products getting preferential treatment in China, thereby negatively affecting the Chinese competitors.