15 January 2003
U.S. CHALLENGE "A HUGE GAMBLE"
US LOOKS POISED TO TURN WORDS INTO ACTION ON GM CROPS
Financial Times (London) January 14 2003
By Edward Alden and Guy de Jonquieres
The US has talked for so long about a legal challenge to the European Union's resistance to genetically modified crops that the threat has begun to sound like a tape recording. Now Washington may be poised to put words into action.
Last week, Robert Zoellick, the US trade representative, raised the stakes by calling for the launch soon of a World Trade Organisation case against the EU. Pascal Lamy, the EU trade commissioner, immediately promised a vigorous defence.
If the US challenge goes ahead, it will be a huge gamble. It would be the biggest and most highly charged in a long line of transatlantic trade disputes that the WTO has been called on to adjudicate since the mid-1990s.
Although a final ruling could take up to two years, litigation would strain US-EU ties and imperil efforts to inject much-needed momentum into the Doha trade round. Tensions could spill over into other areas of transatlantic relations.
Furthermore, a US victory could prove pyrrhic. It would risk turning EU opinion even more strongly against genetically modified organisms - and the WTO - and kill off faltering European Commission attempts to restart the approvals process.
The US might then seek WTO approval to retaliate against European exports. That could further enrage the EU and lead it to activate $4bn (£2.49bn) of sanctions against the US, authorised in a separate dispute over an American corporate tax law.
Washington is keenly aware of the dangers. Indeed, the issue is so sensitive that George W. Bush's cabinet may take the final decision, probably later this month. However, Mr Zoellick's outspoken comments suggest he is confident a WTO case will be launched.
Mr Zoellick has made clear that his patience snapped late last year, when Zambia and Zimbabwe spurned offers of emergency US food aid that could contain GM corn, saying that accepting it could jeopardise their agricultural exports to the EU. He accused the EU of "immoral" behaviour, claiming some member states had linked their aid to African rejection of GM foods.
"The reason the logjam has finally broken is that this is no longer about Europe but about Africa, India and the rest of the world," said a US official.
US trade officials see parallels with their successful WTO challenge in the 1990s to the EU's ban on hormone-treated beef. Although the ban has not been lifted, they say the WTO ruling discouraged other countries from imposing similar curbs.
A US challenge on GM products would pose an even bigger test than the hormones case for the WTO's still sketchy jurisprudence on food safety. It would target the EU's de facto moratorium on new GM crop approvals imposed in 1998, and possibly a proposed directive requiring the traceability and labelling of GM products put on sale. However, legal experts are divided over the prospects for US success. The moratorium could be difficult to attack, because it is semi-official and not based on firm legislation, and the planned directive is not yet law.
"The US does not have a cast-iron case. It has a toehold case," says John Jackson of Washington's Georgetown University, a leading authority on world trade law. "I don't think current WTO rules can handle a case on GM products. There has to be a negotiation."
Nonetheless, he and other lawyers believe that even if the WTO did not uphold all its arguments, Washington might win enough to get the moratorium condemned.
Some in Brussels also doubt whether a case would go their way. David Byrne, the health and consumer protection commissioner, has acknowledged the EU's defence would be based on "very narrow grounds".
The Commission still hopes it can fend off US threats by showing that the EU is moving to open its market. Last month, in a symbolic gesture, it used its powers under existing legislation to approve two oils derived from GM cotton.
Brussels insists the best way to get the moratorium lifted is through small steps, designed gradually to win over EU ministers and reassure public opinion, environmentalists and other campaigners hostile to GM foods.
However, the strategy will only work if EU governments co-operate. Even optimists in Brussels are unsure that they will. "This is an area where there are no guarantees," says one official. "Every prediction we have made so far has been confounded."
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