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Food & Gene Giants Dread New EU Labeling Laws on GMOs

Food industry dreads European labeling rules
By Bill Lambrecht
St. Louis Post-Dispatch Washington Bureau
04/18/2004

They ease biotech exports but impose strict record keeping

WASHINGTON - The food industry is bracing for new European labeling and
tracking rules that could knock down export barriers to genetically modified
food but at the cost of changes in food-production and farming.

Fear of the new rules - which take effect Sunday - is so widespread that
leading American farm and food groups are pressing the government to
challenge their validity in the World Trade Organization.

The stakes are especially high in St. Louis, headquarters of the American
Soybean Association, the National Corn Growers Association and Monsanto Co.,
the world leader in plant biotechnology.

The European rules represent a stark divergence from practices in the United
States, where the government and industry have fought to prevent labeling
genetically modified products along with requirements to track their
shipment.

But in return for abiding by their rules, the Europeans are promising to
lift a moratorium on approvals of many new, American-bred biotech products
that were banned six years ago.
That would be hugely welcome news for Monsanto and its rivals in the
biotechnology industry were it not for concern about the looming rules for
labeling.

They require European retailers to inform consumers if even a tiny portion
(0.9 percent) of their food has ingredients that come from genetically
modified plants. Even sacks of engineered grain fed to animals in Europe
must bear labels.

In order to avoid the stigma of labels, food companies could choose to
reformulate products to assure that they contain no genetically engineered
ingredients whatsoever.

That would be especially troublesome to the soybean farmers in the United
States, where the crop is now more than 80 percent genetically modified.
Soybeans are used in a wide variety of processed foods but companies might
substitute palm oil or the equivalent for soybean oil.

American soybean farmers already have lost one-quarter of their European
market - valued at more than $200 million - in two years in part because of
the furor over biotechnology.

David Hegwood, trade adviser in the U.S. Agriculture Department, said he
worries that some food companies may simply choose to relocate in Europe to
avoid burdensome export rules.

"We think this is a lousy way to accomplish what they are trying to
accomplish," he said.

Farmer obligations

The loss of markets is just one of the worries.

Accompanying the labeling rules are new documentation requirements for
genetically modified products that will require record keeping from farms to
grocery shelves.

American farmers hoping to export engineered corn will need to keep track
for five years of which seeds were planted in what field. Similar records
will need to be maintained at grain elevators and by rail, trucking and
barge lines as grain makes its way across the ocean.

The prospect of all that paperwork is daunting, said Hayden Milberg, the
director of public policy for the National Corn Growers Association in
Washington.

"The U.S. grain-handling system is just not set up for this level of
traceability. Such a system would be extremely expensive," he said.

The issue takes on even bigger significance because much of the world looks
to Europe for leadership in matters of food safety.

Since Europe's initial labeling regime was imposed five years ago, some
three dozen countries representing 20 of the top 25 American export markets
have adopted a labeling system, according to industry calculations.

In other words, rules written for the 15-country European Union - soon to
grow to 25 countries - could have an impact far beyond the European
continent.

"These rules are important for the entire global economy," said Karil
Kochenderfer, director of international trade for the Grocery Manufacturers
of America, the world's largest food association.

"These products are safe by every scientific measurement, but they are being
treated like hazardous waste. If we don't have the objectivity of science,
what do we rely on?" she asked.

Tony Van der Haegen, a European Union official in Washington, argued that
the traceability requirements are becoming common throughout the world as a
means to prevent bioterrorism and attacks on computer systems.

He asserted that the United States ought to understand that there are views
about food in the world other than those held by Americans.

"The problem of the United States is that it works under the motto that what
is good for Americans is good for the world. That is wrong, and that is why
the U.S. is losing big chunks of its export markets," he said.

European barriers

It didn't take long after the first shipments of Monsanto's Roundup Ready
soybeans arrived in Europe in 1996 for a backlash to begin.

Europeans long have paid more attention than Americans have to food, its
sources and its presentation. In the 1990s, the continent had been shaken by
a serious epidemic of mad cow disease, which produced spongelike holes in
the brain of animals and began afflicting humans.

Despite a loss of faith in the continent's regulatory apparatus, Monsanto
did little to prepare the European public for newly constituted food,
leading to the 1998 de facto embargo that remains in effect today.

Europe's new labeling rules were devised as a strategy to give consumers a
choice and to tamp down concerns about the safety of genetically modified
food and its impact on the environment. Greenpeace activists are planning to
fan out to European supermarkets to warn people about products carrying the
new labels.

Despite opposition, Van der Haegen predicted that by early June, Europe will
approve two biotech corn products - one a Monsanto variety - which he
interpreted as lifting the moratorium that has plagued the industry and cost
American corn farmers more than $1 billion in lost exports.

Tom McDermott, Monsanto's spokesman in Brussels, said he is hopeful that the
Europeans will live up to their promise to end the moratorium that is
blocking the approval of about a dozen Monsanto products both for import and
planting.

But McDermott said that Monsanto, like many others, is wary of the new
labeling rules.

"Besides requiring a lot of record keeping and extra work by the people who
handle these products, it will be very difficult to enforce and open the
door to confusion, possibly even to consumer fraud. People might not
represent truthfully what they have," he said.

Lori Wallach, director of Public Citizen's Global Trade Watch in Washington
and the author of a newly released book on the World Trade Organization,
sounded amused by the fretting.

"The industry has its knickers in a colossal knot about the most basic of
market freedoms - the consumer's right to know. It strikes me that there's
more going on here than worry about the cost of regulation. It has to do
with the fear of what consumers will do if fully informed," she said.

Signs of change

In November, 22 organizations representing much of the American food and
farm industry requested that the U.S. trade representative begin formal
proceedings in the World Trade Organization against the new rule, similar to
the challenge to the European Union moratorium last year.

If the World Trade Organization found that the new rules unfairly restrained
trade, Europe could be harshly penalized.

As of last week, the U.S. trade office had made no decision on challenging
the rules, and officials there did not respond to requests for comment.
Government officials have expressed fears in recent months of what they call
a growing "Europe-ization" of world attitudes against genetically modified
food.

But a U.S. official who monitors biotech issues said last week he believes
that the anti-biotech sentiments that gave rise to the new rules are
increasingly being questioned in developing countries.

Peter Chase, a State Department official who returned recently from a U.N.
global biotechnology forum in Chile, said he detected rising resentment
toward European-induced obstacles to agriculture biotechnology.

"Many people feel that the pendulum has swung too far and that some of the
questions that the Europeans keep asking aren't relevant to them," he said.

Reporter Bill Lambrecht
E-mail: blambrecht@post-dispatch.com
Phone: 202-298-6880