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Bush Administration Threatens EU on New GE Food Labeling Law

Bush Administration Threatens EU on
New GE Food Labeling Law

The Washington Post
August 26, 2001

US Challenges EU's Biotech Food Standards

BY: Alan Sipress and Marc Kaufman

Senior Bush administration officials are pressuring the European Union to
abandon new restrictions on genetically modified foods that they say could
cost U.S. companies $ 4 billion a year and disrupt efforts to launch a new
round of global trade talks.

U.S. officials have repeatedly told their European counterparts that the
regulations, which received preliminary approval last month, discriminate
against U.S. products in violation of World Trade Organization requirements,
raising the prospect of a major and emotionally charged trade dispute.
The European Commission's decision to require the labeling of genetically
engineered products reflects a European anxiety about food safety that is
far more profound than in the United States, the world leader in
agricultural biotechnology. This is a divide that threatens to further
aggravate U.S. relations with Europe, already roiled by differences over
global warming, arms control and other trade issues.

Undersecretary of State Alan P. Larson, the State Department's senior
diplomat assigned to economic issues, called the new restrictions "trade
disruptive and discriminatory." He said, "It's obviously a very serious
problem that affects a very important trade and one that's of vital interest
to a very important constituency in the United States, which supports free
trade." Though U.S. officials have declined publicly to detail what type of
punitive action the Bush administration might take against Europe, U.S.
officials say the regulations are inconsistent with the terms of the WTO
because they treat U.S. products less favorably than European ones.
For instance, Larson said the European regulations would require that
American crushed soybean oil bear a label, while European cheeses and
wine made with biotech enzymes would not be covered. "There are potential
WTO concerns about how it is structured now," Larson said.

U.S. officials have left open the possibility of bringing a legal case
before the WTO, which, after lengthy litigation, could eventually impose a
politically embarrassing judgment and stiff economic penalties on Europe.
But Larson said the administration's immediate focus is on lobbying European
governments to amend the regulations before they take effect. He added that
the United States and Europe need to resolve the issue quickly so it does
not become a "distraction" that interferes with their shared interest in
launching new global trade talks as planned later this year.

Officials said that economic losses in the United States -- where 75 percent
of soybeans and more than 25 percent of corn comes from genetically modified
seeds -- could far exceed other transatlantic trade battles, such as those
over bananas and growth hormones in beef. Resolution of the long-running
banana dispute earlier this year removed a major irritant in
American-European relations.

The dispute could also harden public opinion about biotechnology and its
ability to transfer beneficial genes from one species into another.
Proponents want it to be seen as a force for progress and global
improvement, but it could become a symbol of divisiveness if it set off a
bitter trade dispute.

The European Commission's new standards, among the most far-reaching
in the world, call for all products made from engineered material to bear a label
saying they contain "genetically modified organisms." They also require
producers to document the source of all their ingredients. Since the U.S.
crop-handling system generally does not separate modified and conventional
crops, the new requirements could be unwieldy and costly for U.S.
businesses.

European limitations on biotech crops already ban most U.S. corn for food
products, estimated by U.S. officials as a $ 300 million annual loss. The
new requirements, which must be approved by the European Parliament and
Council of Ministers before taking effect by 2003, could also make it
difficult to export corn for animal feed and soybeans.

Larson said in an interview that he has raised U.S. concerns with "everyone
that comes through this door, every trade minister, agriculture minister,
economy minister from Europe," including those representing about eight
European countries. He said a similar message has also been delivered by
Agriculture Secretary Ann M. Veneman and U.S. Trade Representative Robert B.
Zoellick.

President Bush, who comes from a large farm state and counts on the
agriculture industry for political support, raised the issue personally with
European leaders last month at the Group of Eight meeting of industrialized
countries in Italy, according to a senior administration official.
Kimball Nil of the American Soybean Association said the food industry is
pleased by the tough talk. "The Bush administration met with EU
commissioners and very clearly laid down a marker that many of us felt was
missing before," he said.

But European officials chafe at the pressure, saying the administration is
trying to impose U.S. acceptance of biotech food on a European public that
does not believe these products are safe despite scientists' claims. The
spread of mad cow disease and other health crises have fueled public concern
about food safety, and prominent officials, including Britain's Prince
Charles, have been highly critical about biotechnology in crops.
"We are seeing an illustration of American unilateralism," said Tony Van der
haegen, a European Commission representative in Washington. "There are basic
psychological differences between American consumers and those in Europe,
where [genetically modified products] are not accepted."

Requiring food labels is a way of offering choice to consumers and restoring
their confidence in food, Van der haegen said. He added that the United
States has exaggerated the potential loss to U.S. companies, putting the
figure instead at $ 2.8 billion a year.

On a policy level, U.S. regulators have embraced the position that
engineered and traditional crops are essentially equivalent, and so should
be treated the same. There is some public -- and congressional -- pressure
to require labeling of modified foods in the United States, but promoters of
biotechnology have fought tenaciously, and successfully, to resist the
efforts. They argue that labels would unfairly stigmatize the products.
The European Union has not approved any new engineered crops for almost
three years, and it has been under great pressure from the United States to
begin the review process again. The new regulations allow for biotech crop
reviews to resume, but only with the requirements that U.S. officials find
objectionable.

In an Aug. 9 letter to Secretary of State Colin L. Powell, Veneman and
Zoellick, 24 U.S. trade organizations said the proposed EU guidelines on
biotechnology in agriculture are "commercially unworkable, inconsistent with
WTO obligations and would result in billions of dollars of lost U.S.
exports." The letter, signed by groups ranging from the Grocery
Manufacturers of America to the American Soybean Association and the North
American Export Grain Association, said the measure would cause a "serious
trade impediment" by requiring labeling and tracing of modified foods, but
not of European wines and cheeses.

The European regulations would not apply to the latter items because the
requirements distinguish between food made from genetically modified
material such as seeds and those produced with the assistance of modified
material such as enzymes.

Larson wrote back this week that "I share many of your apprehensions
regarding the proposals," and said he was working to "ensure that any
measures [implemented by the EU] are not onerous, costly or
trade-disruptive."

Mark Mansour, a Washington attorney who represents large food companies
and has been consulted by administration officials, has written an analysis
urging the administration to file a case with the WTO as soon as possible.
Mansour also recommends that the United States withdraw support for the
international Biosafety Protocol negotiated in Montreal, a Clinton-era
agreement that accepted some of the European concerns about genetically
modified foods.

As the regulations now move to the European Parliament, legislators may
tighten the restrictions further. Environmental groups are urging them to
remove a provision that waives the labeling requirement if the percentage of
genetically modified material in a food item is less than 1 percent of the
overall product. "The U.S. is trying to force-feed modified foods to the
rest of the world, and it just isn't going to work," said Charles Margulis
of Greenpeace, which has led the anti-biotech campaign in Europe.

U.S. troubles over biotechnology and international trade are not limited to
the European Union. The governments of Saudi Arabia and Sri Lanka have
proposed bans on importing genetically modified foods, and Mexican
legislators are also discussing tough labeling laws. Larson said the United
States is concerned that the EU biotech guidelines could become a model for
developing countries and significantly limit the reach of the technology.
Advocates of biotechnology say it can be especially helpful to poor farmers
by increasing their yields, protecting against pests and viruses, and
allowing them to grow crops in depleted soil. But critics say poor farmers
will never see those potential benefits because the technology is owned by
private, multinational companies interested primarily in selling seeds for a
profit to commercial growers.

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