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Last Updated: Wednesday, 25 June, 2003, 22:38 GMT 23:38 UK
US escalates GM trade war

By Steve Schifferes
BBC News Online, Washington

Ship carrying genetically modified produce from the US
Widespread EU opposition to GM foods
Washington has raised the pressure in the trade row with the European Union over the sale of genetically modified (GM) food at the annual US-EU summit.

In an unprecedented move, President George W Bush took aside EU Trade Commissioner Pascal Lamy during the high-level meeting to berate the EU for its opposition to GM crops.

Earlier in the week, Mr Bush had told a biotechnology conference that "for the sake of a continent threatened by famine, I urge the European governments to end their opposition to biotechnology."

At a later press conference - which was delayed by 40 minutes - Mr Lamy said that the EU would prefer conducting trade talks using "the telephone rather than the megaphone".

He said that the many Europeans believed that the US drive to allow biotech imports was driven more by the food surpluses of US agri-business than by genuine concern about the world's poor in Africa.

And he added that the high-handed tone adopted by the US was hindering those in Europe who wanted to take a more moderate approach to the GM issue.

WTO case

For the United States, trade representative Robert Zoellick said that the US had been patient, waiting for four years before taking a complaint against the EU to the World Trade Organisation.

The United States - and 12 other agricultural exporting nations - want the EU to repeal its five-year moratorium on GM foods, or face trade sanctions under World Trade Organisation (WTO) rules.

Mr Zoellick said that EU citizens needed to understand that their ban on GM foods was damaging developing countries in Africa, who had hoped to export pest-resistant GM crops to Europe.

But the EU is unlikely to lift the block on GM food imports, which is widely supported by European consumers, and is also developing tough new labelling regulations which worry US farmers.

Deadlock at Doha

Mr Zoellick and Mr Lamy also stressed the progress they were making on agreeing a common position at the world trade talks, which enter a crucial half-way stage at a summit in Cancun, Mexico, in September.

Mr Zoellick said they had reached closer understandings on agreements in services and investment, and said it was time for other countries to stop blocking progress on these issues.

But he alluded to the continuing deadlock at the EU over the reform of the Common Agricultural Policy, which he said would "narrow the negotiating room" at the trade talks.

Many developing countries opposed to widening the trade talks to include investment.

However, Mr Zoellick was optimistic that a deal would be reached on the contentious issue of cheaper medicines for developing countries.

But he said that pharmaceutical companies had legitimate fears that some of the bigger developing countries might seek to exploit any agreement to increase their market share.

$4bn damages against the US

Meanwhile, Mr Lamy has been meeting congressional leaders over changes in the US tax code which unfairly subsidises exports.

The EU has obtained support from the WTO for imposing $4bn annually of trade sanctions against US goods if the law is not changed.

And now Mr Lamy says that Congress has until the end of the financial year, 1 October, to make those changes before the EU begins to impose sanctions.

Congress has been deadlocked over how the revise the law, with lobbyists for many different industries pressing for solutions which would benefit their own companies most.

US in new global GM push
23 Jun 03  |  Science/Nature
US launches GM trade war
13 May 03  |  Business
US wavers on EU trade spat
20 Feb 03  |  Business
EU offers WTO farm subsidy cuts
16 Dec 02  |  Business
New US-EU trade war looms
02 Dec 02  |  Business
Europe backs down in steel war
26 Sep 02  |  Business

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