- The US has talked for so long about a legal challenge
to the European Union's resistance to genetically modified crops that the
threat has begun to sound like a tape recording. Now Washington may be
poised to put words into action.
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- Last week, Robert Zoellick, the US trade representative,
raised the stakes by calling for the launch soon of a World Trade Organisation
case against the EU. Pascal Lamy, the EU trade commissioner, immediately
promised a vigorous defence.
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- If the US challenge goes ahead, it will be a huge gamble.
It would be the biggest and most highly charged in a long line of transatlantic
trade disputes that the WTO has been called on to adjudicate since the
mid-1990s.
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- Although a final ruling could take up to two years, litigation
would strain US-EU ties and imperil efforts to inject much-needed momentum
into the Doha trade round. Tensions could spill over into other areas of
transatlantic relations.
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- Furthermore, a US victory could prove pyrrhic. It would
risk turning EU opinion even more strongly against genetically modified
organisms - and the WTO - and kill off faltering European Commission attempts
to restart the approvals process.
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- The US might then seek WTO approval to retaliate against
European exports. That could further enrage the EU and lead it to activate
$4bn (£2.49bn) of sanctions against the US, authorised in a separate
dispute over an American corporate tax law.
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- Washington is keenly aware of the dangers. Indeed, the
issue is so sensitive that George W. Bush's cabinet may take the final
decision, probably later this month. However, Mr Zoellick's outspoken comments
suggest he is confident a WTO case will be launched.
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- Mr Zoellick has made clear that his patience snapped
late last year, when Zambia and Zimbabwe spurned offers of emergency US
food aid that could contain GM corn, saying that accepting it could jeopardise
their agricultural exports to the EU. He accused the EU of "immoral"
behaviour, claiming some member states had linked their aid to African
rejection of GM foods.
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- "The reason the logjam has finally broken is that
this is no longer about Europe but about Africa, India and the rest of
the world," said a US official.
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- US trade officials see parallels with their successful
WTO challenge in the 1990s to the EU's ban on hormone-treated beef. Although
the ban has not been lifted, they say the WTO ruling discouraged other
countries from imposing similar curbs.
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- A US challenge on GM products would pose an even bigger
test than the hormones case for the WTO's still sketchy jurisprudence on
food safety. It would target the EU's de facto moratorium on new GM crop
approvals imposed in 1998, and possibly a proposed directive requiring
the traceability and labelling of GM products put on sale. However, legal
experts are divided over the prospects for US success. The moratorium could
be difficult to attack, because it is semi-official and not based on firm
legislation, and the planned directive is not yet law.
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- "The US does not have a cast-iron case. It has a
toehold case," says John Jackson of Washington's Georgetown University,
a leading authority on world trade law. "I don't think current WTO
rules can handle a case on GM products. There has to be a negotiation."
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- Nonetheless, he and other lawyers believe that even if
the WTO did not uphold all its arguments, Washington might win enough to
get the moratorium condemned.
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- Some in Brussels also doubt whether a case would go their
way. David Byrne, the health and consumer protection commissioner, has
acknowledged the EU's defence would be based on "very narrow grounds".
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- The Commission still hopes it can fend off US threats
by showing that the EU is moving to open its market. Last month, in a symbolic
gesture, it used its powers under existing legislation to approve two oils
derived from GM cotton.
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- Brussels insists the best way to get the moratorium lifted
is through small steps, designed gradually to win over EU ministers and
reassure public opinion, environmentalists and other campaigners hostile
to GM foods.
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- However, the strategy will only work if EU governments
co-operate. Even optimists in Brussels are unsure that they will. "This
is an area where there are no guarantees," says one official. "Every
prediction we have made so far has been confounded."
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