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More US Threats on EU GMO
Moratorium

December 2, 2002

U.S. Ponders Next Course
In EU Biotech-Food Fight

WTO Suit Is Possible in Crop Battle
For Big Markets in Asia, Elsewhere
By NEIL KING JR.
Staff Reporter of THE WALL STREET JOURNAL

WASHINGTON -- If the Bush administration decides to knock heads with Europe
over its ban on new U.S. biotech foods, the reason will lie less in France
or Italy than in drought-hit Zambia.

Though facing a serious famine, Zambian officials decided to turn away
26,000 tons of U.S. food aid in October, saying the shipments contained
genetically modified corn that wasn't safe. The kernels, Zambia's
agriculture minister said, could pollute the country's seed stock and hurt
its export markets.

To Bush aides, the move was stark proof that Europe's antibiotech crusade
has hit home even in countries critically short on food. But the deeper fear
is this: That as Zambia goes, so may go many of the big food markets in
Asia, Latin America and the Middle East, where there are also rumblings of
European-style unease over genetically modified crops and the need to block
them from entry.

So how to stem the tide? Administration officials say they may have only one
choice: to file a case at the World Trade Organization against the European
Union's four-year moratorium on approving new U.S. biotech foods. The
argument would be that the ban is purely political and based on no
scientific finding of risk.

"Europe is ground zero, but it is not at all the whole of our concern," says
one U.S. trade official. "If we allow Europe to flout science and the
international trading system, nothing will prevent others from doing the
same."

Whether to pursue a WTO biotech suit is now a matter of intense
administration debate as officials strive to craft a recommendation for the
White House by early next year. U.S. Trade Representative Robert Zoellick is
said to favor going forward, but some senior State Department officials
worry a food fight could complicate relations with Europe at a delicate
time.

The lack of glee is understandable. Even proponents of lodging a case
concede that a U.S. victory at the WTO would strain relations with the
Continent, anger EU consumers and tar the image of U.S. food products -- all
without prying open the European market. The Europeans, even with an adverse
ruling, still wouldn't be likely to let in new U.S. biotech products.
European Trade Commissioner Pascal Lamy, meanwhile, warns that a WTO suit
would "freeze" all efforts within the EU's executive arm to convince member
states to lift the ban.

Environmentalists, too, think it would be pointless. "No WTO case is going
to get EU consumers to eat what they don't want to eat," says Charles
Margulis, a Greenpeace biotech adviser.

But the crucial upside, U.S. officials say, could be elsewhere. They cite
the continuing feud with Europe over its refusal to allow in U.S. beef
containing growth hormones. The United States won a beef-hormone case
against Europe at the WTO four years ago. The victory did nothing to change
EU behavior, but it did keep other countries from imposing similar bans.

"There's no question that the hormone case sent a very strong message to the
rest of the world that these types of trade restrictions are not acceptable
in the WTO. And in that sense, it was an important U.S. victory," says Peter
Scher, a former agricultural trade negotiator in the Clinton administration.

The U.S. is overwhelmingly the world's largest planter of genetically
modified crops -- mainly soybeans, cotton and corn. Much of that now is
shipped along with regular crops to Japan, China, the Middle East and
Southeast Asia, with total exports topping $12 billion a year. These
products also make their way into everything from bread to beer.

The EU biotech moratorium, in place since 1998, has hit U.S. corn exporters
hardest by blocking an estimated $250 million in annual sales. The six EU
states backing the ban, among them Austria and France, say they will stick
to it until the EU puts in place proposed consumer rules that U.S. food
exporters say could cause even worse havoc.

Under an agreement struck last week, everything from breakfast cereals to
animal feed with more than 0.9% of genetically modified ingredients will
need a label. Another proposal may require companies that deem a product
GMO-free to keep five-year records proving that no ingredient, all the way
back to the farm, ever crossed paths with anything bioengineered.

"This would be crazy and impossible to put into practice," says Mari Stull,
head of international policy at the Grocery Manufacturers of America, a
Washington-based industry group.

A large swath of the U.S. farm sector urged Mr. Zoellick in a letter last
month to "end U.S. patience" and pursue a WTO case at once. One reason:
Europe's actions "may be negatively affecting the attitudes and actions of
other countries."

EU diplomats say their policies and the views of EU consumers, don't dictate
what others do halfway around the world. They also reject suggestions that
Europe played any role in Zambia's turning down the U.S. food aid.

But on many fronts, the ripple effect is clear. In a classic example last
week, the Illinois Farm Bureau urged growers in the state to avoid all GMO
corn varieties not approved for the EU market -- the first such state bureau
to do so. The concern, the bureau said, is that unapproved strains might
mingle with approved ones, causing the EU to block all Illinois corn: a fear
similar to that expressed in Zambia.

Various European-style labeling regimes are either in place or being
considered in countries as disparate as South Korea, Japan, Israel, Egypt
and Mexico. China caused a row with the U.S. this summer when it imposed
biotech rules that crimped the flow of U.S. soybeans. Meanwhile, the fight
over whether to allow planting of biotech seeds has grown intense in Africa,
India and parts of Latin America.

Mr. Zoellick has assiduously sought allies in the tug of war with Europe.
Biotech crops were a major theme of his travels to Kenya, South Africa and
Botswana this year and he has banged on the issue across South America. But
if he goes to the mat with the EU, those in his corner will be few: Canada,
Argentina, Australia, the Philippines, maybe Brazil and South Africa.

U.S. officials say that somehow they must lay down a marker. "We have been
very, very patient," another administration official says. "But our patience
is running out."

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