06 January 2003 00:00 [Source: ICB Americas]The incoming chairman of the Senate Finance Committee is urging the White House to file a complaint with the World Trade Organization (WTO) over the European Union's (EU) moratorium on approvals of new genetically modified (GM) crops, which is thwarting US sales of agricultural commodities.
Senator Charles Grassley (R-Iowa) says the US has a strong legal basis for a WTO challenge, and there is wide support in the agricultural community for "drawing a line in the sand" to prevent other countries from imposing similar restrictions on the products of biotechnology.
For the past four years, the EU has not allowed food products and animal feed that contain ingredients derived from biotechnology to be placed on the European market.
EU member states have refused to lift the moratorium until new regulations on the labeling and traceability of biotech crops are implemented, which is unlikely before the end of 2003.
American farmers say they have lost hundreds of millions of dollars per year in export sales, and the moratorium has prevented biotech companies from introducing new products to the EU market.
Because the US has been unable to persuade the EU to drop its moratorium, Cabinet-level officials in the Bush administration are expected to decide soon whether to file a trade complaint with the WTO.
Unless the EU changes its policy, the administration "has little choice but to file a complaint," says one source. The US case, he explains, would likely portray the moratorium as a trade barrier, and not challenge the underlying EU laws on approvals. "Our ultimate objective is to get the moratorium lifted," he states.
Senator Grassley says the White House should move forward with a case, even though some fear it could prompt the EU to retaliate against $4 billion worth of US goods in a separate dispute over US tax breaks for exporters. "They expect us to live up to our WTO commitments, and we expect them to live up to theirs, too," Senator Grassley remarks. "It's just enforcing the rule of law."
The WTO has given the EU permission to impose trade sanctions on the US in the export tax case. But Europe has not acted, based largely on President George W. Bush's promise that Congress would change US tax law to comply with the WTO rulings.
About 75 percent of the world's biotech crops are planted in the US, according to the Pew Institute on Food and Biotechnology. A large percentage of major export crops, such as corn, cotton and soybeans, now come from biotech varieties.These crops account for much of the US's annual $6.3 billion worth of farm exports to the EU.
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