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WTO may intervene in dispute over genetically modified crops
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Farmer Ron Jacobson stands among his 200 acres of soybeans. He's the president of the Minnesota Soybean Growers Association. (MPR Photo/Rob Schmitz)
Minnesota farmers are paying close attention to a trade dispute spurred by European Union restrictions on genetically modified, or GM crops. The EU placed restrictions on GM crops in 1998, citing a need to protect consumers. They've banned certain varieties of GM corn and just this year, required labelling of GM food. U.S. trade officials say the restrictions are illegal protectionism. The U.S. wants the World Trade Organization to intervene.

Freeborn, Minn. — All of farmer Ron Jacobson's 200 acres of soybeans here in Freeborn, Minnesota, are "Roundup Ready." They're beans that have been genetically engineered to tolerate the popular and highly effective herbicide Roundup.

As Jacobson walks along his waist-high beans in the hot September sun, he says deciding to grow Roundup Ready soybeans was easy. "It's just a matter of economics now," says Jacobson. "The price of soybeans isn't all that great, and the cost of putting these in -- the seed cost is a little bit higher, but the chemical cost is so much cheaper to keep them clean."

Equipped with Roundup Ready soybeans, Jacobson says he doesn't have to spray his crops with as many environmentally damaging chemicals. But his product is not very popular in Europe, where a recently-passed European Union law will require the labelling of food that contains more than 1 percent genetically modified food.

Last year, U.S. farmers sold the E.U. 209 million bushels of soybeans -- around 20 percent of the U.S. soybean supply. More than 80 percent of this supply is genetically modified.

Jacobson, president of the Minnesota Soybean Growers Association, says EU's labelling of GM food will close off the European market to many American farmers. As a result, he says, farmers will have to compete even harder in the markets that remain.

There's no obvious benefit to consumers, and as long as there's the slightest doubt that it could be harmful to your health, they won't buy it.
- Harold Von Witzke, on Europeans' skepticism of GM foods

"We're going to have to do it cheaper, cheaper, and cheaper, until, basically, we're all out of business. You have to have profit to stay in business. That's all there is to it," says Jacobson.

According to EU legislators, much of the European resistance to GM food stems from consumer concerns over its potential risks to human health and the environment.

Advocates say years of research by both U.S. and British scientists who have concluded there is no evidence to suggest that today's GM crops are less safe to eat than conventional foods, nor worse for the environment than conventional farming.

But European consumers remain suspicious.

Harold Von Witzke, the chair of International Trade in Humboldt University's College of Agriculture in Berlin, says European consumers are more skeptical eaters than Americans.

He says when deciding between purchasing GM or non-GM food, the European consumer will carefully weigh the benefits.

"Obviously, the producer of GM foods are benefitting, those who develop GM food and soybeans have benefitted. But there's no obvious benefit to consumers, and as long as there's the slightest doubt that it could be harmful to your health, they won't buy it," says Von Witzke.

Von Witzke says American companies producing genetically modified crops need to educate the European consumer about the environmental benefits to GM food. Then, he says, consumers might warm up to it.

But even if that happens, GM crops will still have to clear political and economic hurdles within the E.U.

In what otherwise might be seen as an uncommon alliance, Green Party members in E.U. member-states have teamed up with the European agriculture industry to wage a political war against GM foods.

The Greens are concerned about the potential for GM crops to harm ecosystems across the world. The E.U. ag industry is concerned about increased competition from abroad.

John Baize, a Virginia-based soybean industry consultant, says the EU's new labeling requirements on GM food are solely intended to give European farmers an unfair advantage over American imports to the European market.

"There will be an incentive for food manufacturers in Europe to say, 'I'm not going to put soybean oil in my food, because I'm going to have to label it as being biotech. So I'll take soybean oil out and put in rapeseed and sunseed which are grown in Europe.' (That) probably will cause a higher price premium for those, and a benefit for farmers in Europe," says Baize.

Baize says labeling will undoubtedly hurt U.S. soybean exports to Europe, which last year accounted for $1.2 billion in revenue for U.S. farmers. He isn't alone in his thinking. Two weeks ago, the World Trade Organization set up a dispute settlement panel to assess U.S. claims that E.U. restrictions on GM crops are illegal under WTO fair trade laws.

C. Ford Runge, director of the Center for International Food and Agricultural Policy at the University of Minnesota, says many WTO members are concerned EU restrictions will have a spillover effect on their countries, too.

In a much-publicized case last year, Zambia refused U.S. food aid because it was genetically modified.

Runge says the Zambian government put thousands of its starving citizens at risk because they feared the GM food would be fed to the country's cattle, ruining Zambia's export market of cattle to the EU.

Runge says EU restrictions on GM food could also backfire on EU's biotechnology sector.

"I think there's concern in the scientific community in Europe over the degree to which they may be digging a hole for themselves which will be very difficult to dig out of," says Runge, "actually compromising their own competitiveness, and encouraging some of their best scientists to vote with their feet and leave the E.U. to do their work elsewhere."

Runge says E.U. restrictions have already put European biotech companies behind the curve in GM food research.

Labelling GM foods, he says, may keep these companies further behind the competition.

It's a situation, Runge says, that's very similar to the results of a labelling policy here in the U.S.

In the most recent farm bill, legislation was passed requiring country of origin labeling on food products sold in the U.S. Runge says the requirements were passed with the specific intent of discriminating against Canadian imports.

The requirements, he says, have ended up being an even bigger burden on the entire U.S. food system, because of the extra paperwork to certify where the food is from.

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