By Chris Prentice

WASHINGTON (Reuters) - China's lengthy approval process for genetically modified crops remains a sticking point in talks to end the trade war between China and the United States, according to two sources with knowledge of the talks.

Beijing has taken years to approve new strains of GM crops, which U.S. companies and farmers have complained stalls trade by restricting the sales of new products from companies such as DowDuPont Inc, Bayer AG, and Syngenta AG.

The issue is one of a host of U.S. complaints that the administration of President Donald Trump is demanding China address if it wants to end trade disputes that have cost both countries billions of dollars and slowed the global economy.

 

Trump on Thursday said the two sides were getting very close to a deal that could be announced in about four weeks, though there were still differences to be bridged.

GM crops and the approval process are still a "big issue" in the discussions, said one of the sources, who spoke on condition of anonymity.

The issue has been a source of tension between the two countries for years. China is the biggest buyer of U.S. soybeans, the bulk of which are genetically modified. If it does not approve new strains, then farmers in the United States cannot plant them because China may reject shipments that include them.

Seed companies cannot fully commercialize sales of new strains without those approvals. The two sides had appeared to make some progress on the issue in January, when China approved a handful of GMO crops for import. They were the first in about 18 months. The move did not address the core U.S. concerns over delays to the process.

A spokeswoman from the Office of the U.S. Trade Representative, who is leading the Washington team in the discussions, did not respond immediately to request for confirmation or comment.

China's Ministry of Agriculture and Rural Affairs did not immediately respond to faxed questions on Friday, which was a public holiday in China.

It is unclear what differences on the issue remain. The United States wants China to accelerate its approval process and make it more similar to Washington's.

Beijing allows imports of GMO soybeans and corn for use in animal feed, even though it does not permit planting of them.

China bought about 60 percent of U.S. soy exports, worth about $12 billion, before the ongoing U.S.-China trade war and could reject shipments of unapproved varieties.

Beijing promised to speed up its review of applications during previous trade talks with the United States in 2017. In the past, Beijing has held back approvals of imported GMO products amid concerns about anti-GMO sentiment in China.

The trade deal, should it be agreed, is expected to include a six-year time frame for purchases of more than $1 trillion in U.S. goods, including commodity products.

(Reporting by Chris Prentice in Washington; Additional reporting by Tom Polansek in Chicago and Andrew Galbraith in Shanghai; Editing by Simon Webb and Grant McCool)

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