For over a decade, US producers of genetically modified (GM) seeds, food and feed have been frustrated by having to wait years for permission from the EU to place their products on the market. While the European policy is strongly influenced by consumer concerns about eating GM food, the Word Trade Organisation (WTO) has so far sided with Washington in its complaint about the EU approval system. The US continues to let the threat of retaliatory trade sanctions hover. Presently there are informal consultations between the two sides on how to resolve the dispute, but Washington is losing patience. “We are reaching a point at which we are asking if it is producing the results we need. There is pressure from our exporters to launch a new WTO procedure,” said one US trade official.

Europe used to be one of the largest markets for American corn exporters, but this is no longer so. “We have lost market share because of the GM restrictions, largely to Brazil, which is filling the void,” said Sharon Bomer, executive vice-president of BIO, the lobby for the US biotech industry. Bomer noted that Brazilian farmers are increasingly growing GM soybeans and canola too so the EU’s options for importing non-GM cereals are narrowing. Of the six major companies that make GM products, three – Monsanto, DuPont and Dow are US-based and three – Syngenta, Bayer and BASF – are EU-based. A US trade official noted that soybeans have not been as badly affected by the GM restrictions because not as many new GM varieties are being developed.

Crops are typically modified genetically to make them resistant to insects and herbicide. Some 80% of corn, 86% of cotton and 90% of soy produced in the US is genetically modified. Whereas the EU approval process can take up to ten years, getting a GM product approved by the US administration typically takes 18-24 months, Bomer said. In fact, the EU member states imposed a moratorium on authorising GM foods from 1998 to 2003. EU governments are still divided on the issue, which in practice gives the European Food Safety Agency a central role in the authorisation procedure. Bomer said the biotech industry wanted the EU to have “a scientifically-based, predictable and functional regulatory system for authorising GM foods, which it does not have now”.

CONTAMINATION THRESHOLD

A related problem is of cereals being denied access to the EU market because of small batches of GM varieties not yet authorised by the EU getting mixed in during the shipping process with cereals that are authorised by the EU. Called low-level presence, co-mingling or contamination, the EU legally has a zero tolerance policy for this. US rice exporters fell foul of it in 2006 when GM seed stock not yet authorised in the US or EU got mixed in with authorised stock. The EU introduced emergency measures, requiring testing of all rice at ports of entry to the EU and withdrawing some rice from the EU market. The episode has had a “devastating effect” on the US’ ability to export rice to the EU, said one US trade official.

The EU food industry is also unhappy with the current situation. “EU producers believe that the zero tolerance approach is both unsustainable and not realistic in the long term,” said Lisa McCooey from the Confederation of the Food and Drink Industries of the EU. The European Commission has proposed tweaking the policy to allow animal feed to be imported if it contains up to 0.1% of GM varieties not yet authorised in the EU, on condition that that GM variety was approved in the country of origin and an application to have it approved in the EU has been filed.

One US trade official said that while “the Commission is moving as quickly as it can, the real roadblocks are in the EU Council. It takes so long to get a product approved that when it is finally cleared, often the product is no longer relevant to the market.” About 50 applications for approvals are currently in the EU pipeline, including both EU member states applying to cultivate GM crops, and requests to import GM foods from the US, Canada, Brazil and Argentina. The EU authorised seven GM varieties in 2007 and three in 2008. Most of these cases were animal feed (typically corn), a sector where European cattle farmers wanting to buy cheaper feed are keen for the blockages to be cleared. The GM rice that the EU imports from the US is mainly for human consumption, whereas much of the soy imports are processed for oil.

The restrictions affect imports of processed foods too as anything containing GM ingredients must be labelled as such, in contrast to the US, where GM foods are not labelled. One EU official staunchly defended the labelling requirements, saying “it is not just about protectionism. It is about complying with our food safety law.” The official said cultural differences between EU and US regulators came into play here. “The US just focuses on the risk posed to human health. The US Food and Drug Administration does not allow labelling because it says it misleads the consumers. But our Food Safety Regulation (2002/178/EC) gives consumers the right to know and lets them decide.”

EU PUBLIC OPINION THE KEY

Any move to ease restrictions is likely to be opposed by environmental NGOs. They have had a big impact on the debate in Europe, mobilising public opinion, and in turn politicians, to their cause. But according to one EU official, public opinion might not be as rigidly fixed as many think. While the Commission’s Eurobarometer opinion polls rate opposition to GM foods among the public as high as 80%, the official pointed to a separate study of European shopkeepers, which found that they were not especially worried about stocking GM foods. “There could be a discrepancy between what people say and what they actually do in terms of their buying habits,” the official said.

EU cereal imports from US ($)

Corn: 1997 = 359 million; 2008 = 119 million

Rice: 2005 = 86 million; 2007 = 44 million; 2008 = 68 million

Soy: 1997 = 2.7 billion; 2002 = 1.4 billion; 2008 = 1.77 billion