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Picking a WTO-GMO legal fight will erode U.S. corn and corn gluten exports

(March 1, 2002 -- CropChoice news) -- "The American Corn Growers Association (ACGA) is warning that a U.S. push to use World Trade Organization (WTO) trade sanctions to force foreign markets to import genetically modified (GMO) corn could threaten plans to double U.S. ethanol demand. Ethanol offers tremendous potential as a renewable fuel for this nation's energy security, but any threat to export markets for the corn gluten associated with ethanol production jeopardizes plant expansion plans," says Larry Mitchell, CEO of the ACGA. A doubling of ethanol production will use 800 million bushels more corn and a bushel of corn yields approximately 20 pounds of corn gluten. The European Union is the largest export market for U.S. corn gluten feed and meal, buying over 80 percent of the 5.4 million metric tons of U.S. exports last year. At 4.4 million metric tons, marketing year (MY) 2000/01 U.S. corn gluten feed and meal exports to the EU were nearly 700,000 metric tons less last year than in MY 1999/00.

According to USDA Trade Statistics, accumulated U.S. corn exports are running 7 percent behind last marketing year at this time, including zero accumulated U.S. corn exports to China as of 2/14/02. Marketing Year (MY) 2000/01 ended with total U.S. corn exports 1 million metric tons (MMT) behind MY 1999/00. The ACGA is concerned that trying to force genetically modified corn varieties (GMOs) on buyers will have trade retaliation as the likely outcome. The European Union is also the largest market for U.S. soybeans (6.8 MMT last year and 6.6 MMT to date this year), followed by China (5.7 MMT last year and 3.9 MMT to date this year). Japan is the largest market for U.S. corn, importing 14.6 MMT last year.

"While China works on its own GMO import policy, perhaps with an eye toward protecting Chinese farmers, Japan continues its protocol to manage and restrict GMO imports and the European Commission develops regulations on cross-border movements as well as a system for tracing and labeling GMOs in food and feed, the United States leans toward a strategy of taking legal action through the World Trade Organization (WTO), against our best customers," says Larry Mitchell, CEO of the ACGA, "and threatening foreign markets with WTO-GMO lawsuits is hardly a 'market or export-oriented' approach."

Dan McGuire, director of the ACGA's Farmer Choice - Customer First program points out that farmers tend to bear the economic burden of trade wars. "The recent action by the U.S. Special Trade Representative (USTR) on the Section 301 complaint that the Canadian Wheat Board undersells U.S. wheat in third country markets, failed to set a tariff rate quota (TRQ) on imports of Canadian wheat into the U.S. market," said McGuire. The ruling did not, as yet, call for using the Export Enhancement Program (EEP) to compete against Canada in third country markets. "The victors in that U.S. Section 301 case are North American wheat millers who will continue to have low priced wheat at their disposal on both sides of the border and, as the USTR indicated, a TRQ would violate our NAFTA commitments, which shows just how far NAFTA traded away U.S. farm policy sovereignty, a bitter lesson for farmers," added McGuire.