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US leans to WTO case against EU on biotech freeze

(Thursday, Dec. 12, 2002 -- CropChoice news) --

WASHINGTON - (Reuters) A trade dispute pitting the United States against the European Union over the EU's refusal to approve new, genetically-engineered products, is brewing and could soon boil over, a U.S. government official and industry experts said.

They said the administration of President George W. Bush was leaning towards taking the issue to the World Trade Organization, despite concerns about the ramifications of filing such a high-profile case, not the least of which is a strain on U.S.-EU relations before a possible attack on Iraq, continue to weigh on policymakers.

At the heart of the matter is an EU moratorium on approvals of genetically-modified goods, ranging from soybeans to pharmaceuticals.

Trade groups wants the U.S. government to file a complaint with the WTO over the moratorium.

In Washington, an interagency group, consisting of mid-level Bush administration officials, has kicked the decision of a WTO complaint up to President Bush's Cabinet.

The Cabinet heads, which include the secretaries of state, agriculture and U.S. Trade Representative, will soon hear a strong argument from a "trade policy review group" about the merits of filing a complaint.

Not a single member of the group will argue against filing a complaint, said a U.S. official, who asked not to be identified.

"Are we close to a decision? Yes, I think so," the official said, adding, "I think people feel that there is a strong case" to be made at the WTO against the EU moratorium.

But, the official explained, the fact that a Cabinet meeting is being scheduled to review the trade problem "means they're not prepared to tell senior White House officials, 'Yes, go ahead and do this.'"


Taking on the EU over genetically-modified products "would be a major trade case and that carries lots of political implications for other trade issues as well as for bilateral relations with Europe outside of trade," the official said.

Asked whether those non-trade issues include the Iraq situation, the official answered, "I wouldn't rule anything out."

One U.S. industry source said the administration is "inclined toward a time-line that would be in mid-December or within a month following that" for filing a WTO case, unless the EU somehow makes great strides toward lifting the moratorium.

Another private-sector trade expert said it would be unusual for the president's Cabinet to overturn the findings of the trade policy review group.

"The decision hasn't been made yet, but I think it's likely that it will be positive," he added.

U.S. Trade Representatives Robert Zoellick, the trade source said, is now "firmly in the camp" of those believing a WTO case should go forward. "He certainly swings the heaviest bat in interagency meetings," he added.

Richard Mills, a spokesman for Zoellick, refused to comment on the likelihood of a WTO complaint. But Mills noted that the EU's moratorium is "illegal under both EU and international law" and "its ripple effects abroad have blocked food distribution to starving people in the developing world."

For the past four years, the EU, bowing to consumers' biotech fears, has maintained a moratorium on approvals of genetically-modified goods ranging from soybeans to pharmaceuticals.

The U.S. had hoped to avoid a time-consuming, expensive World Trade Organization complaint and that EU member states would allow a lifting of the moratorium.

In recent weeks, the EU has taken some steps in that direction. But those steps may be too little too late, especially now that some biotech food aid from the United States is being turned away by starving Africans who say they fear getting on the wrong side of the EU's ban.

U.S. farmers, who have increasingly devoted their crop-plantings to biotech commodities, also have told the administration their patience has worn thin.