WTO Ruling Backs Biotech Crops; European Ban, Challenged by U.S and Allies, Violates Trade Regulations, Panel Says

The World Trade Organization ruled yesterday that a six-year European ban on genetically engineered crops violates international trade rules, according to U.S. sources familiar with the ruling.

The widely expected ruling, though it will not be final until later this year, appeared to be a symbolic victory for farmers and agricultural companies in the United States, Canada and Argentina. The three countries had challenged Europe's anti-biotechnology stance in the world trade body in Geneva.

The sources, who spoke on the condition of anonymity because the finding is preliminary and confidential, said a panel at the trade body issued its decision late yesterday, ruling in favor of the three countries on a large majority of the 25 crops under dispute in the case while issuing mixed rulings on a few crops. The panel also ruled in favor of the three countries in challenging national bans on specific biotech crops issued by Austria, France, Germany, Greece, Italy and Luxembourg.

The ruling was welcomed by pro-biotechnology groups in the United States, which had urged the Bush administration to file the case in 2003. Farm groups and biotech advocates are hoping the ruling will soften European resistance to the crops and, even more important to them, slow the spread of anti-biotech sentiment around the world.

"The decision was never really in doubt, but its global impact could be huge," Gregory Conko, an analyst at the Competitive Enterprise Institute in Washington, said in a written statement. "With the voice of the world community now clearly on the record, we hope the Europeans will quickly dismantle their bans and let science-based policy and consumer freedom prevail."

How much practical effect the trade ruling will have remains to be seen, though, as resistance to gene-altered crops remains high among European consumers. Most European grocery chains refuse to stock products made with genetically engineered ingredients. If European manufacturers did produce foods with such ingredients, they would have to be specially labeled, a policy that the United States condemns but hasn't yet challenged in the trade body.

Past U.S. attempts to push biotech crops have provoked intense backlash by European consumers, and some anti-biotech groups predicted that the same thing would happen again as they assailed yesterday's ruling and the trade case that led to it. Lori Wallach, director of Global Trade Watch in Washington, part of a network of consumer groups founded by Ralph Nader, denounced the WTO panel's application of "retrograde rules" in an attempt "to force Frankenfoods on the rest of the world regardless of what consumers and their elected representatives say."

Biotech crops first came to market in the United States in the mid-1990s. The large majority of those developed so far have been commercial failures, but a few developed by Monsanto Co., Syngenta AG and other big agricultural firms have been runaway successes. They include gene-altered varieties of corn, soybeans, cotton and canola. Genes from other species have been inserted into these crops to allow them to better resist weeds and insects. Some of the crops, notably cotton, require substantially less chemical treatment and are seen by their backers as having environmental benefits.

An overwhelming body of scientific opinion -- including regulators at the European Food Safety Authority and scientific institutes in most European countries -- holds that the crops are safe to eat and pose only minor environmental risks. But European consumers were burned by food-safety scandals in the 1990s involving dioxin-laced chickens, beef capable of causing a fatal brain disease, and other disasters in which they were initially assured that the foods were safe. Their trust in the opinion of European, much less American, scientists on such matters is low.

Controversy over the U.S.-led movement toward planting biotech crops exploded in Europe in 1998. Several crops had been approved by then and the United States still sells tons of such crops to Europe every year, but the European Union stalled new approvals for six years, from 1998 to 2004. Six countries issued national bans even on crops that had already received Europe-wide approval.

It was those actions that the United States and its allies challenged, citing WTO rules that say new products must be considered expeditiously and can be banned only on sound scientific grounds.

European regulators contend that even if the rules the United States challenged amounted to an illegal moratorium, the European ban was effectively lifted by a stringent new regulatory framework that took effect in 2004. The trade panel "has recognized that the alleged moratorium has ceased to exist," a European Commission official said last night. "Our sense is, it's a mixed bag. In some respects, the panel is upholding our positions."

The United States acknowledges that Europe, under the 2004 rules, appears to have lifted its moratorium, at least technically, and is now moving forward in considering biotech crops. But the United States contends that the process is still too slow and the regulatory standards are unreasonable given that the crops, which Europeans refer to as genetically modified organisms, or GMOs, pose few risks.

"The U.S. appears not to like the E.U. authorization regime, which it considers to be too stringent, simply because it takes longer to approve a GMO in Europe than in the U.S.." the European Union said in a briefing document. "The U.S. appears to believe that GMOs that are considered to be safe in the U.S. should be de facto deemed to be safe for the rest of the world."

In practice, Spain is the only European country growing any significant amounts of biotech crops. Virtually no foods containing such ingredients appear on European grocery shelves, and some applications to allow such crops have been pending in Europe for a decade.

"When you have products that are still languishing from the mid-1990s, obviously we think there's a problem that has to be addressed," a U.S. trade official said late yesterday.