US and EU at odds over report on GM food curbs

"At first sight it appears to be a mixed bag. The panel found against the EU on some points, but upheld our arguments on others. The panel clearly said that no moratorium currently exists."

an anonymous EU official

The US and EU were again at loggerheads over trade issues on Wednesday, with each claiming a WTO report had favored its position on Brussels' curbs on imports of genetically modified foods.

The 1,050-page preliminary ruling concluded that the EU had an effective ban on biotech foods between June 1999 and August 2003, when the panel was established, and had therefore acted inconsistently with its WTO obligations.

But the EU countered that its current regulations on biotech products were vindicated by the report, saying that there was never a European moratorium on the imports of genetically altered crops from the US or elsewhere.

"This interim report is largely of historical interest, as this panel will not alter the system or framework within which the EU takes decisions on GMOs (genetically modified organisms)," said EU spokesman Peter Power.

Senior US officials said the confidential verdict by the WTO panel, which was delivered to the involved parties late on Tuesday, would bring great benefits to farmers and rural areas worldwide.

"It's a significant and positive development," said Susan Schwab, a deputy US trade representative. "The proof will be in trade flows and the transparency and ease of the approval process."

Complaint

The report largely sided with a legal complaint brought by the US, Canada and Argentina over an EU moratorium on approval of new biotech foods, ruling that individual bans in six EU member states -- Austria, France, Germany, Greece, Italy and Luxembourg -- violated international trade rules.

The report concluded that the EU had breached its commitments with respect to 21 products, including types of oilseed rape, maize and cotton. But it also rejected several other US contentions that Brussels' effective moratorium had broken trade rules on several other products, including potatoes and soybeans.

It also found that the individual member state bans were against trade rules.

The panel stressed that it had not examined whether biotech products were safe or not.

"At first sight it appears to be a mixed bag. The panel found against the EU on some points, but upheld our arguments on others," said an EU official, who spoke on condition of anonymity because it was a confidential report. "The panel clearly said that no moratorium currently exists."

A final ruling is expected next month and can be appealed.

The complainants say that there is no scientific evidence for the EU's actions and that the moratorium has been an unfair barrier to producers of biotech foods who want to export to the EU.

US groups hailed the decision, as did members of the US Congress from farm states. The farm groups had contended that they were losing hundreds of millions of dollars annually in export sales of genetically modified crops to the EU. Types of corn, cotton and soybeans had all been blocked by the EU.

The ruling will open the door to more European customers for US businesses but also will set an example for other world markets, said Leon Corzine, chairman of the National Corn Grower's Association, based in suburban St. Louis.

If the ruling remains unchanged in its final publication, it will likely be used as a legal tool against biotech bans passed in EU member states, as well as in several Asian and African WTO member countries and even in a few US counties, according to the Institute for Agriculture and Trade Policy, a Minneapolis-based research organization.

Moratorium

The EU ended its moratorium in 2004 when it allowed onto the market a modified strain of sweet corn, grown mainly in the US. Brussels says the 25-nation bloc has approved the import of nine biotech crops since 2004, but the US has said it will continue with its WTO case until it is convinced that all applications for approval are being decided on scientific rather than political grounds.

The environmental group Friends of the Earth said the case undermines the right of governments to decide what is safe for their citizens, and pressures other countries -- especially developing nations -- to accept genetically modified foods against their will.

"The WTO is unfit to decide what we eat or what farmers grow," said Brent Blackwelder, US president of Friends of the Earth. "It is an undemocratic and secretive institution that has no particular competence in environmental or health and safety matters."