January 10, 2008 / 10:56 AM / 12 years ago

EU may face trade sanctions over WTO biotech case

BRUSSELS, Jan 10 (Reuters) - Europe may soon face more transatlantic ire over its policy on genetically modified (GMO) foods as a deadline to comply with an international trade ruling slips past with little evidence that GMO imports are increasing. The European Union has until Friday to comply with a World Trade Organisation (WTO) ruling in a case that pitted it against Argentina, Canada and the United States — the world’s top three growers of GMO crops.

Brussels has had difficulty in implementing the ruling since some of its 27 member states are operating their own bans, which EU law allows them to do under certain conditions.

Between 1997 and 2000, five EU countries banned specific GMOs on their territory, focusing on three maize and two rapeseed types that were approved shortly before the EU’s six-year moratorium on new biotech authorisations.

Austria is now the only country whose import bans refer to products still marketed. In the other cases, the companies manufacturing the particular GMO products that were the subject of the original bans have withdrawn them from the market.

Those bans, against MON 810 maize made by U.S. biotech company Monsanto MON.N, and T25 maize developed by German drugs and chemicals group Bayer BAYG.DE, will still be in place when this week’s deadline comes to pass.

EU officials say the three complainants in the WTO case may well request WTO sanctions against Brussels for non-compliance.

They also have two other options: to say that everything is fine or to set a later date for the compliance deadline, which has already been extended from mid-November. “There’s a deadline and they need to take a decision on whether they retaliate or not,” one biotech industry source said, adding that at least one or more of the trio were more likely to announce an intention to seek WTO-approved sanctions.

“It (retaliation) is usually (against) a range of products, usually targets particular member states and can take various different timelines,” the source said.

CHEESE, TRUFFLES

In 1999, Roquefort cheese was among European products hit with punitive 100 percent duties when the United States imposed $117 million of sanctions on EU goods in retaliation for the EU’s failure to lift a ban on hormone-treated beef. Other affected European products included pork, truffles and tomatoes.

The same year, Washington imposed $191 million of sanctions against EU exports after the WTO ruled the EU’s banana import policies broke world trade rules. The sanctions hit goods ranging from handbags, cardboard boxes, bed linen and batteries.

Taking steps to get the Austrian GMO bans lifted now rests with the European Commission, the EU’s executive arm that administers EU law across the bloc’s 27 member countries.

EU governments have already had their say on a draft Commission decision that orders Austria to scrap the bans. But since they failed to agree, the Commission gains the legal power to enforce its own decision. The trouble is that the Commission itself has yet to decide to do this — and disagrees internally.

So, in Brussels the clock is ticking. And in Washington, U.S. officials are watching closely. While the EU executive is due to hold a debate on GMO policy in the next weeks, including what to do about the Austrian bans, no date has yet been set.

Editing by Michael Roddy

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