February 8, 2008 / 11:42 AM / 11 years ago

EU, US seek arbitration in biotech crops row

GENEVA, Feb 8 (Reuters) - The European Union and United States said on Friday they were seeking arbitration at the World Trade Organisation (WTO) in their long-running row over the EU’s ban on biotech crops.

But the two trading powers told the WTO’s dispute settlement body they intended to suspend the request for arbitration to give themselves more time to work out a solution, trade officials said.

Crops engineered to resist pests and tolerate pesticides while improving yields are increasingly popular with farmers in rich and poor countries.

But many EU consumers, keen on organic produce, are wary of eating “Frankenfoods”, while advocacy groups say genetically modified (GMO) crops threaten biodiversity.

The WTO has ordered Brussels to end the ban on GMO crops, and Washington has asserted its right to retaliate if the EU fails to do so by seeking compensation equal to the lost value of exports and licensing fees.

But the EU says this compensation is out of line with WTO rules, hence the need for arbitration.

Washington says its main interest is to open up EU markets to biotech crops rather than seeking compensation by suspending benefits enjoyed by the EU in U.S. markets under WTO rules.

Brussels has found it hard to implement the WTO ruling in the dispute, which also pits it against Argentina and Canada, because the 27 EU member states operate their own bans.

Friday’s manoeuverings at the WTO aimed to get around inconsistencies in WTO dispute rules, which set conflicting timetables for seeking compensation when members fail to comply with rulings, and determining whether they have done so.

Austria continues to ban 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. The EU’s biggest food producer France imposed a temporary ban last month on MON 810.

The case will be closely watched by other biotech companies such as U.S. chemicals majors Du Pont DD.N and Dow Chemical (DOW.N), and Switzerland’s Syngenta SYNN.VX, the world’s biggest agrochemicals company. (Reporting by Jonathan Lynn; Editing by Catherine Evans)

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