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WTO may intervene in dispute over genetically modified crops

(Monday, Sept. 22, 2003 -- CropChoice news) -- Associated Press: FREEBORN, Minn. Minnesota farmers like Ron Jacobson are paying close attention to a trade dispute spurred by European Union restrictions on genetically modified crops.

That's because Jacobson has 200 acres of soybeans in Freeborn all of which are genetically engineered to tolerate the herbicide Roundup.

But his product is not very popular in Europe, where a recently passed European Union law will require the labeling of food that contains more than 1% genetically modified food.

Equipped with Roundup Ready soybeans, Jacobson said he doesn't have to spray his crops with as many environmentally damaging chemicals. Deciding to grow Roundup Ready soybeans was easy, he said.

"It's just a matter of economics now," Jacobson said. "The price of soybeans isn't all that great, and the cost of putting these in the seed cost is a little bit higher, but the chemical cost is so much cheaper to keep them clean."

Last year, U.S. farmers sold the European Union 209 million bushels of soybeans around 20% of the U.S. soybean supply. More than 80% of this supply is genetically modified.

Jacobson, president of the Minnesota Soybean Growers Association, said EU's labeling of GM food will close off the European market to many American farmers. As a result, he said, farmers will have to compete even harder in the markets that remain.

"We're going to have to do it cheaper, cheaper, and cheaper, until, basically, we're all out of business. You have to have profit to stay in business. That's all there is to it," Jacobson said.

Much of the European resistance to GM food stems from consumer concerns over its potential risks to human health and the environment, according to EU legislators.

Advocates say years of research by U.S. and British scientists has found no evidence suggesting GM crops are less safe to eat than conventional foods; GM crops are no worse for the environment than conventional farming, according to scientists.

But European consumers remain suspicious.

Harold Von Witzke, the chair of International Trade in Humboldt University's College of Agriculture in Berlin, said European consumers are more skeptical eaters than Americans.

"Obviously, the producer of GM foods are benefiting, those who develop GM food and soybeans have benefited," Von Witzke said. "But there's no obvious benefit to consumers, and as long as there's the slightest doubt that it could be harmful to your health, they won't buy it."

Von Witzke said American companies producing genetically modified crops need to educate the European consumer about the environmental benefits to GM food. Then, he said, consumers might warm up to the idea.

But even if that happens, GM crops will still have to clear political and economic hurdles within the European Union.

In what otherwise might be seen as an uncommon alliance, Green Party members in EU member-states have teamed up with the European agriculture industry to wage a political war against GM foods.

The Green Party is concerned about the potential for GM crops to harm ecosystems across the world. The EU agricultural industry is concerned about increased competition from abroad.

John Baize, a Virginia-based soybean industry consultant, said the EU's new labeling requirements on GM food are solely intended to give European farmers an unfair advantage over American imports to the European market.

"There will be an incentive for food manufacturers in Europe to say, 'I'm not going to put soybean oil in my food, because I'm going to have to label it as being biotech. So I'll take soybean oil out and put in rapeseed and sunseed which are grown in Europe.' (That) probably will cause a higher price premium for those, and a benefit for farmers in Europe," Baize said.

Labeling will undoubtedly hurt U.S. soybean exports to Europe, which last year accounted for $1.2 billion in revenue for U.S. farmers, Baize said.

The World Trade Organization set up a dispute settlement panel recently to assess U.S. claims that EU restrictions on GM crops are illegal under WTO fair trade laws.

C. Ford Runge, director of the Center for International Food and Agricultural Policy at the University of Minnesota, said many WTO members are concerned EU restrictions will have a spillover effect on their countries, too.

In a much publicized case last year, Zambia refused U.S. food aid because it was genetically modified.

Runge said the Zambian government put thousands of its starving citizens at risk because they feared the GM food would be fed to the country's cattle, ruining Zambia's export market of cattle to the EU.

EU restrictions on GM food could also backfire on EU's biotechnology sector, Runge said.

"I think there's concern in the scientific community in Europe over the degree to which they may be digging a hole for themselves which will be very difficult to dig out of," Runge said, "actually compromising their own competitiveness, and encouraging some of their best scientists to vote with their feet and leave the EU to do their work elsewhere."

Runge said EU restrictions have already put European biotech companies behind the curve in GM food research.

Labeling GM foods, he said, may keep these companies further behind the competition.

It's a situation that's very similar to the results of a labeling policy here in the United States, Runge said.

In the most recent farm bill, legislation was passed requiring country of origin labeling on food products sold in the United States. Runge said the requirements were passed with the specific intent of discriminating against Canadian imports.

The requirements, he said, have ended up being an even bigger burden on the entire U.S. food system, because of the extra paperwork to certify where the food is from.

Source: http://www.usatoday.com/tech/news/techpolicy/2003-09-20-wto-gen-mod_x.htm