Industry Market Trends

WTO Condemns E.U. Over GMO Moratorium

Feb 08, 2006

In a move hailed by most American biotechnology, food and agriculture groups, the World Trade Organization ruled yesterday that the European Union and six member states had broken trade rules by barring entry to genetically modified crops and foods.

Yesterday the United States won a closely watched trade dispute in which the World Trade Organization (WTO) ruled that the European Union breached international rules by restricting imports of genetically modified (GMO) crops and food made from them.

The U.S., joined with Argentina and Canada, had argued that the moratorium had more to do with protectionism than precaution, and the WTO agreed. The ruling, which runs 800-1,000 pages and is said to be one of the most complex the commerce body has issued, had been delayed several times. A final ruling is expected next month and can be appealed.

The hush-hush decision, which was not made public but rather was discussed by federal trade officials, "represents a victory for the agricultural biotechnology industry, which for years has been battling opposition to its products from consumers and governments in Europe and some other countries," the New York Times reported today.

While the ruling at the Geneva-based trade group is not expected to flood Europe with biotech foods, American government and industry officials have said it would help discourage other countries from adopting similar barriers and would thus "set a precedent that countries must have sound scientific reasons for rejecting genetically modified crops." Some countries have feared they would lose exports to Europe if they were to grow the crops.

"One of the reasons we brought the case was because of the chilling effect the E.U.'s actions had on the adoption of biotechnology," a U.S. trade official told reporters yesterday.

The U.S., Canada and Argentina together filed a complaint against the European Union in 2003, claiming that "a moratorium on approvals of genetically modified crops that Europe adopted in 1998 violated a food trade treaty that requires regulatory decisions to be made without 'undue delay' and to be based on science," noted the NYT. The three countries also complained that six European countries — Austria, France, Germany, Greece, Italy and Luxembourg — violated trade rules by banning even biotech crops that had been approved by the European Commission.

Europe had argued that it did not have a moratorium but that it just took time to weigh the possible risks to health and environment posed by genetic engineering. It said it needed to take a "precautionary" approach to regulation as opposed to Washington's "laissez-faire" stance.

Interesting, the trade organization panel appears not to have challenged Europe's regulatory process for biotech crops. Rather, it said Europe failed to follow its own procedures, resulting in undue delay of decisions.

The panel ruled in favor of the U.S. regarding the bans by the six countries. It also ruled in favor of the U.S. on 23 of 27 specific crops, according to a biotechnology industry consultant who said he had been briefed on the ruling.

Although genetically modified crops, mainly corn, soybeans and cotton containing bacterial genes that provide resistance to herbicides or insects are widely grown and consumed in the U.S., they are rarely as such in Europe.

Further, while American biotechnology, food and agriculture groups hailed the WTO's ruling, consumer and environmental groups opposed to biotech crops condemned the finding.

"The World Trade Organization, with its secretive decision-making processes, is unfit to decide what we should eat or what farmers should grow," Alexandra Wandel, trade coordinator for Friends of the Earth Europe, said in a statement.

If this decision is upheld by WTO members, Europe will not be forced to alter its regulations or labeling requirements or force consumers to buy and eat food that they do not want, wrote adjunct fellow Jon Entine at the American Enterprise Institute for Public Policy Research. "It will demand the E.U. observe its own regulatory process — using sound science to evaluate new products. That hasn't been happening."

Although the E.U. officially lifted its legal ban on GM crops and foods in 2004, squabbling among member states have left the moratorium in place, with 16 products bottled up in committees.

Europe is expected to argue that the decision is moot because it resumed approving biotech crops in 2004. However, the American trade official said that some applications filed in the 1990s had still not been approved. Moreover, the recent approvals have generally been for importing crops, not for growing them.

The ruling against E.U. curbs on imports of genetically modified foods should bring great benefits to farmers and rural areas worldwide, U.S. officials said today. "The continuing adoption of agricultural biotechnology worldwide is evidence it provides tremendous benefits to farmers and rural communities," said U.S. Agriculture Secretary Mike Johanns.


World Trade Agency Rules for U.S. in Biotech Dispute

by Andrew Pollack

The New York Times, Feb. 8, 2006

Let Them Eat Precaution: Beyond the WTO Decision on GMOs

by Jon Entine

The American Enterprise Institute for Public Policy Research, Feb. 8, 2006

U.S.: WTO Ruling Should Benefit Farmers (Update 6)

by Sam Cage

The Associated Press (via Forbes), Feb. 8, 2006

WTO ruling should benefit farmers, Feb. 8, 2006

EU moratorium on ag biotech breaks WTO rules

Agriculture Online, Feb. 8, 2006