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US Threatens WTO Reprisals over EU Labels on GE Food

GUARDIAN (London) Monday July 31, 2000

New trade war looms over GM labelling
Paul Brown in Washington

Europe and the United States are on a collision course over the issue of
the labelling of genetically modified food which threatens to spark a
trade war.

Washington has warned the EU that it is considering making a formal
complaint to the World Trade Organisation in Geneva on the grounds that
labelling GM products is unfair discrimination against US goods and
therefore a restraint of trade. The US says it will ask the WTO to impose
sanctions against EU exports if GM labels are not removed from supermarket
shelves.

The row comes at a time when trade relations with the US are tense over
other disputes.

A spokeswoman for the US food and drug administration, which insists that
only nutritional information should be on the label, said: "This is
getting extremely serious. We regard requiring GM labelling as economic
fraud. Our view is that we would not have allowed these products on the
market if they were not safe, they are the same as non-GM food, so they do
not require a label. In fact, to label them is trade discrimination and
therefore wrong."

The agency confirmed there had been discussions with the European
commission over labelling and the restraint of trade issue, but the two
sides were "as far apart as ever".

Among those urging the US to take action is Senator Christopher Bond, a
Republican from Missouri and a leading advocate of US bio-technology. He
told the Guardian that the EU's insistence on labelling was designed to
lower consumer confidence in US goods and was a barrier to trade. "I will
be pushing for trade sanctions over this hysteria," he said. "We are on a
collision course, and our government must go to the WTO if the EU does not
give way."

In Brussels, Beate Kminde, speaking for the commission, said the EU was
aware of US threats but no formal complaint had been made. "We are aware
of our trade obligations but we also believe in consumer choice so we
require GM foods to be labelled. The Americans will not accept this but we
are determined. We will have to see what they do."

Unless the row is resolved, there could be a trade war that would make
present disputes seem very small.

The British government is already braced for heavy job losses in the
Scottish cashmere industry as a result of US retaliation in the
long-running US-EU banana dispute. US officials complain that Caribbean
producers in former colonies of EU members are getting preferential
treatment.

Britain has so far escaped sanctions in the row over the EU ban on the use
of hormones in beef, which has led to 12-year embargo on US beef. Goods
including French cheese and truffles and German and French mustards have
faced 100% US tariffs in tit-for-tat action but Britain's support for the
US position, even though it cannot opt out of the EU ban, has meant
British goods have not been targeted.

The EU meanwhile has complained about US export subsidies to huge
corporations such as Boeing, Exxon, Ford and Monsanto.

Regulators on opposite sides of the Atlantic disagree about the purpose of
food labels and the EU stance on consumer choice is regarded as
fundamentally wrong in Washington. The FDA believes that GM foods are safe
and the nutritional value is the same as non-GM foods, so there should be
no mention on the label of the "process" by which the food was grown.

In Washington, Tom O'Connor, director of technical services for the
national grain and feed association, said the EU labelling system would
"kill GM technology in Europe".

"It looks like a warning, like putting a skull and crossbones on the
packet, a kiss of death in marketing terms," he said.

The FDA and other regulators decided in May to look again at the issue
after US organic and other food producers began to label food GM-free. No
final decision has been made but officials believe that to conform with
regulations the food would have to be 100% non-GM, a difficult feat in a
country where almost all processed food contains some GM maize or soya.

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