WTO: EU Broke Trade Rules by Stopping Import of Genetically Modified Foods

GENEVA – The WTO has ruled that the EU the international trade rules by stopping imports of genetically modified foods, officials said Tuesday.

The preliminary judgment by a World Trade Organization panel concluded that the European Union had an effective ban on biotech foods for six years from 1998, said the officials, who spoke on condition of anonymity because it is a confidential report.

The report sided with a legal complaint brought by the United States, Canada and Argentina over an EU moratorium on approval of new biotech foods, the officials said. The panel ruled that individual bans in six EU member states — Austria, France, Germany, Greece, Italy and Luxembourg — violated international trade rules.

The EU and United States declined to comment as diplomats were still studying the details late Tuesday. The ruling — said to be one of the most complex the commerce body has issued — runs to about 1,000 pages. It had been delayed several times.

The complainants claim that there is no scientific evidence for the EU's actions and that the moratorium has been an unfair barrier to producers of biotech foods who want to export to the EU.

An environmental group, Friends of the Earth, says the case undermines the right of governments to decide for themselves what is safe for their citizens, and pressures other countries — especially developing nations — to accept genetically modified foods against their will.

The EU ended its moratorium in 2004 when it allowed onto the market a modified strain of sweet corn, grown mainly in the United States. Washington has said it will continue with its WTO case until it is convinced that all applications for approval are being decided on scientific rather than political grounds.

Tom West, vice president of biotechnology affairs at seed company Pioneer Hi-Bred International Inc., said the decision "reinforces the heart and soul of what WTO is all about."

The EU moratorium limited choices for both U.S. and European farmers, as well as European consumers, West said. Iowa-based Pioneer supplies seed and other grain products in nearly 70 countries.

"I think farmers in all export production ag markets will benefit from this decision," West said. "Because the U.S. is the largest of the production ag bases, it's going to benefit U.S. farmers the most."

The ruling is good news not so much because it will open the door to more European customers for U.S. businesses, but because it will set an example for other world markets, said Leon Corzine, chairman of the National Corn Grower's Association, based in suburban St. Louis.

That could be good news for Monsanto Co., the world's biggest producer of genetically engineered seed. The company wants to expand its customer base worldwide largely because it already dominates the U.S. market, according to a report from analyst Kevin McCarthy with Banc of America Securities.

Selling biotech seeds could account for 80 percent of Monsanto's 2006 profit, according to McCarthy's report. Increasing acceptance of the crops worldwide could be a major lift to Monsanto's bottom line, he said.

Monsanto spokesman Chris Horner declined to comment on the WTO ruling because the St. Louis company had not seen an official copy of it yet. But he said selling biotech seed to European customers isn't a high priority for Monsanto in the short term.

"At some point in the future, there may be a market, but it's not like that's anything we've really factored into our planning," Horner said.