Seed News

French GM Ban Increases US Threat to Seek WTO Sanctions

Date Posted: January 16, 2008

Brussels (January 15/The Wall Street Journal) -- The U.S. said it will retaliate with trade sanctions unless European Union countries reverse illegal bans on planting genetically modified crops, threatening escalation in the long-running trans-Atlantic dispute over engineered foods.

Yesterday's announcement came just two days after French President Nicolas Sarkozy said he would join a handful of other EU countries in banning permanently the only genetically modified crop the EU has licensed for cultivation -- Monsanto Co.'s MON810, a corn used for animal feed.

The U.S. threat of retaliation is the result of an early U.S. complaint against EU member Austria, which missed a World Trade Organization deadline to lift its ban on the corn Friday. Mr. Sarkozy's decision, however, has bigger implications.

France is the second-biggest user of MON810 in Europe and the EU's agriculture powerhouse. Its decision to ban the corn would be a significant defeat for U.S. biotech companies, already struggling to get a piece of the EU's $7 billion seed market.

"We are taking steps necessary under World Trade Organization rules to preserve our right in the WTO to suspend trade concessions," said Gretchen Hamel, a spokeswoman for the U.S. trade office. "It is hard to overstate our disappointment with this new biotech ban announced by the government of France."

The U.S. won a suit two years ago at the WTO over Austria's refusal to allow cultivation of MON810. Under WTO rules, a country can prohibit a product only for safety reasons, but the EU's own food-safety watchdog has said MON810 isn't dangerous to human health. Austrian officials say they have no plans to lift their ban on the corn.

Under WTO rules, the U.S. retaliation could take the form of punitive trade tariffs on popular goods from Austria, such as the soft drink Red Bull, which is produced by Red Bull GmbH. Now that France has joined the ban, the U.S. could extend its trade sanctions to French wines or other sensitive goods. The U.S. also could ask the EU to lower some of its tariffs on U.S. goods in specific markets, as compensation.

"There are no grounds whatsoever" for France to ban MON810, said Jonathan Ramsay, a lobbyist for Monsanto in Brussels. Monsanto will explore "all legal remedies," he added.

Environmentalists, however, welcomed the French move. "It's the first time one of the big EU countries is making the right choice," says Marco Contiero, policy director for Greenpeace in Brussels.

EU farmers have been growing more and more MON810 corn since it was approved for use in 1998. Last year, the bloc grew 110,000 hectares of the corn, up from 62,000 in 2006.

Under EU law, countries can opt out of an EU regulation if they can show it goes against a core national interest. As evidence, French officials cite a report released last week by a commission Mr. Sarkozy formed to review the safety of Monsanto's corn. The report says pollen from MON810 is too easily transmittable to neighboring crops and can infect nearby butterflies and worms.

Many French farmers say they need the corn to cut their pesticide bills. MON810 generates a protein that kills the European corn borer, which destroys corn crops. The EU's executive body, the European Commission, said it will challenge the French ban.

more SEED NEWS...