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Sunday, April 25, 1999 Published at 14:17 GMT 15:17 UK

Business: The Economy

New Atlantic trade war looms

Agriculture is latest area for dispute

America and Europe are squaring up for another trade war, this time over genetically-modified (GM) food.

Food under the microscope
The dispute centres on new strains of genetically-modified crops, grown extensively in the US but the cause of health fears among consumers in Europe.

It is predicted that nearly all of the soya grown in America - 60 million acres - will be genetically-modified within the next year.

[ image: Beefing up for a trade battle]
Beefing up for a trade battle
At the same time Europe has banned the commercial growth of GM crops, setting the scene for biotechnology to follow beef and bananas as the subject for a trans-Atlantic trade battle.

As he geared up for the world trade talks in Seattle, US Agriculture Under-secretary Gus Schumacher warned that America would take action if Europe continued to drag its feet in approving new GM crops and foods.

Banana battle

The BBC's Rachel Morgan: The US will take action if Europe continues to drag it's feet
He said: "We feel it very important that with trade in food in the world, non-scientific issues need to be resolved scientifically.

"We are pretty grouchy actually that the EU is looking at not complying with WTO rulings."

Earlier this month the World Trade Organsation (WTO) allowed the US to slap heavy tariffs on a range of European goods in the latest twist in the banana dispute.

This long-running battle concerns favourable treatment given to banana producers in former European colonies, at the expense of American-owned banana growers in Latin America.

The WTO, set up to settle trade disputes by negotiation rather than tit-for-tat sanctions, may well find itself rapidly called in to try and find a solution to the GM crops issue.

It is already attempting to defuse a row over American beef, which the EU has threatened to ban completely from mid-June after finding traces of hormone in US beef certified as hormone free.

Further study needed

Health concerns are also at the centre of the crops issue with widespread public concern in Europe.

Some supermarket chains have banned any food which includes genetically-modified ingredients while commercially grown GM crops have been banned while further studies on the possible health and environmental effects of their use is carried out.

Elsewhere the issue appears to have raised less concern, with GM crops now approved on five continents.

Bob Wichmann, vice president of biotechnology company Premier Seeds, believes that it is only a matter of time before consumers see the benefits of GM crops.

"I think that once we begin to really see what the true value of the technology is right through the food chain, right through to the consumer, it will be accepted more broadly."

The economic arguments for GM crops are pushed by industry leaders such as Monsanto.

Public unease

It claims that crops will provide great benefits to farmers, in particular in the Third World. In the US farmers can earn $30 more per acre if they switch to genetically modified soya.

But Andy Kinbrell, from the US Centre for Food Safety, said that virtually every poll of public opinion taken had shown unease.

The most recent one showed 90% of people wanted GM food labelled, adding that 70% of consumers would then not buy it, he said.

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