United States and European Union Trade in GM Foods

The newest and potentially next explosive trade conflict between the U.S. and EU deals with U.S. exports of GM crops.

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EU policy for Genetically Modified Organisms differs from the U.S. policy, and unlike in the U.S. where food safety and GM crops have avoided the media limelight, they are high on the consumer, political, and consequently the media agenda across the continent. Technically speaking, GM crops have been approved for commercial use in the EU, with approximately 18 products on the market. Practically speaking, since October 1998 the EU has not authorized the commercial use of any new crops and for all intent and purposes, GM crops are dead in the water in the EU for the short term foreseeable future.

Why is there such a different attitude towards GM crops on each side of the Atlantic? Most analyses of the European anti-GM crop movement offer two interrelated explanations of the phenomena. First and foremost, experts tend to agree that the lack of consumer confidence results from a series of Food Scares. Most Americans are somewhat familiar with the Mad Cow Disease scare that swept across Europe in 1995. Perhaps a few Americans vaguely remember the case of Dioxin Contamination of foodstuffs and the Coca Cola scares in Belgium in 1999.

Unlike the fuzzy knowledge that Americans bring to these issues, European consumers' knowledge and concerns about these issues are high, and have created a crisis in consumer confidence about the level of food safety across the continent. The lack of consumer confidence in food safety issues can be further explained in institutional terms. In brief, the EU currently lacks a comprehensive food safety regime similar to the U.S. food safety regime as embodied in the work of the Food and Drug Administration, (FDA).

Food safety issues in the EU have been transformed into two related transatlantic trade concerns. The first deals with the issue of EU imports of BT corn, and started back in 1996 when the French government petitioned the EU for commercial approval of certain BT corn crops. At the time of the petition, there was a good deal of European Opposition to the introduction of the product. Notwithstanding the opposition, the Environment Council approved the application, only to discover that the French government failed to live up to its end of the regulatory process and provide the final approval for commercial use and production.

The immediate term consequences of the move caused confusion in the EU market has hurt U.S. corn farmers, as explained in the BT Corn Politics section, who thought that some of the corn they planted in the 1998 and 1999 seasons would be available to the EU export market. They had little reason to see that a French Court coupled with the persistent petitioning of Greenpeace would circumvent the EU GM crop approval process. US farmers also underestimated the will of the European consumer whose demand for non-GM crop products translated into a European grocer demand for non-GM foods.

In the medium term, GM food trade prospects also appear gloomy. For example, in June (1999) the Environment Council all but imposed a moratorium on new GM crop applications. In January (2000), the council issued a White Paper on Food Safety proposing the creation of a new European Food Safety Regime to be headed up by a central food safety organization. The time frame for setting up the organization and establishing acceptable community wide procedures for reviewing and accepting application for the commercial marketing of GM crops could be anywhere from three years or longer.

U.S.trade concerns have not reached the legal levels experienced with the BST ban, yet U.S. officials are increasingly expressing concern. In a recent speech on the subject, Under Secretary of State Alan Larson laid out the U.S. position.

"First, the EU should not disrupt existing trade in corn gluten and soybeans. Our 1998 soy exports to the EU were valued at $1.5 billion, almost nine percent of the value of U.S. production.

Second, the EU should agree to accept exports of American non-biotech corn and already-approved biotech corn on an appropriate and reasonable basis. That means finding a mechanism to reduce liability to exporters.

Third, the EU should move ahead on the five biotech corn products that are pending in the EU. Only 4.6 percent of the U.S. 1999 planted corn acreage is unapproved in the EU. Two varieties, representing 2/3 of the unapproved acreage planted in 1999, have passed through the approval process but are being held up by the Commission's Directorate General for Environment.

Fourth, the EU should put in place a rational, predictable, and science-based EU regulatory regime for assessing the safety of new biotech products with a potential environmental impact.

Fifth and finally, the EU should ensure that any regulatory actions are science-based, non-discriminatory, and grounded in sound application of risk assessment and risk management."

© 2001. Patricia A. Michaels