Interesting article which suggests that regardless of whether some EU governments are inching forward on GM crop acceptance, for the US the economic headache that GM crops represent is only set to get worse.
The article also makes clear that the US's problems stem from a determination to deny choice to the consumer, as an USDA official makes clear, "Labeling is a problem for us primarily because the food companies have said they don't want to label their brand name products because they think consumers won't buy them if they do. We have no reason to doubt that would be the case."
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U.S. Expects New EU Biotech Laws To Further Dampen Ag Trade
Jan. 16, 2004
http://www.cropdecisions.com/show_story.php?id=23135
As the European Union prepares to launch new laws in April to label and track all genetically modified food, U.S. farmers and government officials are warning they may turn out to be stronger trade barriers than the biotech approval ban they are intended to replace.
Only nine biotech agriculture commodity varieties had been cleared for consumption by the EU when it shut down the approval process in 1998. That, according to U.S. Trade Representative Robert Zoellick, has cost U.S. exporters "a few hundred million dollars...a year" in corn sales alone.
The U.S., in comparison, has approved more than 50, according to the Biotechnology Industry Organization.
The EU has promised the U.S. for years it would lift its ban on new biotech crops so long as labeling and record-keeping regulations could be implemented.
But trade and biotech counselor for the USDA David Hegwood said the regulations may be impossible to comply with. "What's not clear about this regulation is whether it's going to require exporters to identify the specific (biotech traits) in a corn shipment," Hegwood said. "We've got know way of knowing. We don't know how we're going to deal with that."
USDA Chief Economist Keith Collins said he expects the impact on U.S. agriculture to be "significant," but declined to make a precise forecast. "No one knows how the E.U.'s regulations will be implemented and enforced, thus estimates of economic impacts (on U.S. exports) are not possible at this point," he said.
Craig Ratajczyk, director of trade analysis for the American Soybean Association, said effects are already being felt because European food companies are replacing traditional U.S. ingredients such as soyoil or corn oil with alternatives such as palm oil from Malaysia to avoid labeling problems.
That may be because USDA research shows that even U.S. consumers, generally considered to be far less concerned about the safety of genetically modified food, were less willing to buy groceries if they were labeled as containing biotech ingredients.
Tony Van der hagen, minister counselor for the European Commission in the U.S. said he expects sales of the biotech corn-containing food products, allowed into the EU because of their pre-moratorium approval, will likely suffer when they are forced to bear GMO labels.
The labels, he said, will be necessary to maintain European consumer confidence in the food they eat, especially in the years to come as companies produce pharmaceuticals through genetic manipulation of plants.
In the event that pharmaceutical-growing plants ever got mixed with food or feed varieties, the ability to trace back the origin of those crops will be even more critical, Van der hagen said.
U.S. farm groups say they would like to see the U.S. file suit in the World Trade Organization against the new EU biotech regulations, but Hegwood said the USDA and USTR are still do not know if they should.
American Farm Bureau Federation President Bob Stallman said he has no doubt that a WTO suit is needed. In a letter to President George Bush, Stallman complained, "Replacing one non-WTO compliant action with another non-WTO compliant solution is not acceptable."
If indeed the decision is made to challenge the new E.U. laws, USDA's Hegwood said the U.S. will move much quicker than the five years it took to dispute the approval moratorium. The U.S. continued to hold off on challenging the moratorium, Hegwood said, because of repeated EU promises to begin approving new biotech commodities again. He said that mistake will not be made again.
"We always accepted ... that the moratorium was temporary, it just gone on way too long," he said. "They always said it was temporary, but (the new laws) are permanent."
Source: OsterDowJones Commodity News