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02/07/06 - Opinions Differ on GMO Ruling - WTO finds EU in Violation of Trade Rules

By Todd Neeley, DTN Staff Reporter

OMAHA (DTN) -- A report saying the World Trade Organization ruled Tuesday the European Union's moratorium on genetically modified foods violates trade rules is good news in the view of one U.S. corn grower group and bad news in the view of another.

The WTO also ruled six EU states including France and Austria had also violated trade rules by placing bans on marketing and importing GMOs, the Associated Press reported.

Larry Mitchell, president of the American Corn Growers Association, said the ruling could be "the final nail in the coffin in the WTO round."

Growers should be concerned the ruling could have the opposite effect on how GMOs are viewed throughout the world and could make the U.S. trade position more difficult in the Doha round of the WTO, he said.

The WTO ruling, Mitchell said, could leave the impression that the U.S. is not respecting its customers, which could make it difficult to reach a trade agreement.

"We thought it was ill conceived to sue our customers anyway," he said. "It's not advancing the best impression. I think it could hurt our markets elsewhere in that it could extend the sensitivity to other parts of the world. To go to court to force a market is not a good thing."

Rick Tolman, chief executive officer for the National Corn Growers Association, said while the ruling may not mean EU markets would immediately open for GMOs, it makes a statement to other nations.

"This is really good news," he said. "While we may not in the short run have good exports, it is important to send a message that what the EU was doing was illegal."

The U.S. has worked hard to convince EU consumers that GMO products are safe, and the WTO ruling will likely make that cause easier to sell, Tolman said.

"One of our concerns is that there really has not been a choice in that market place," he said. "The EU consumer cannot choose. We can't force them to take it or like it. But we can make the case that we sold this stuff in the U.S. for 10 years. We spent a lot of time meeting with consumer groups and we'll probably continue to do that."

The decision actually could have a positive effect on the rest of the world and how it sees GMOs, Tolman said.

"I think we can't underestimate the impact on the rest of the countries in the world that have been listening to the EU and have considered banning GMOs," he said.

U.S. GMO products may find their way back into certain EU countries faster than others, Tolman said.

For example, he said, the U.S. once exported 80 million bushels of corn to Spain and Portugal until both countries banned U.S. corn after unapproved GMO varieties were found in imports.

"Like everything else I'm sure the devil is in the details," Tolman said. "There are a complex set of issues the U.S. had filed, and some of the details will be product-specific moratoriums. We could make a case that Spain would be willing to bring it back in."

An American Soybean Association release said the group applauds the WTO decision and urged the Bush administration to file a challenge with the WTO against Europe's "discriminatory traceability and labeling laws that apply to biotech crops."

Marcella Hilt, public relations specialist with the Office of the United States Trade Representative, said USTR lawyers are still reading the confidential 2,000-page report and would not issue a comment on the ruling until that is complete.

If U.S.-grown GMOs are going to find their way into the EU markets after the ruling, Mitchell said, lots of work remains.

"We're going to have to win the hearts and minds of the consumers," he said. "I suspect it will take a long and extensive outreach program. We need to sit down and think long and hard about whether it's worth it for the American farmer. Having market access and having market share are two hugely different things."

Todd Neeley can be reached at Todd.Neeley@dtn.com.