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6-Regulation: US to challenge EU's policy on GM foods in WTO

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                                  PART I
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TITLE:  US to challenge EU's policy on GM foods in WTO: officials
SOURCE: Agence France press/EU Business, by Corbett Daly
DATE:   May 8, 2003

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US to challenge EU's policy on GM foods in WTO: officials

WASHINGTON, May 8 (AFP) - The United States has decided to challenge the
European Union's de facto moratorium on genetically modified foods in the
World Trade Organization, senior administration sources said.

"We've been pushed against a wall here," a senior administration official
told AFX News, a subsidiary of AFP, on condition of anonymity, adding
that a case is expected to be filed by "mid-June" at the latest.

"Sooner is probably more likely," the official said. Officials are still
debating the timing of filing the legal papers. At issue is whether to
file the case before or after the upcoming Group of Eight summit in
Evian, France.

Bush is set to travel to the southern French coast early next month for
the annual gathering of the heads of state of Britain, Canada, France,
Germany, Italy, Japan, Russia and the United States.

Richard Mills, spokesman for US Trade Representative Robert Zoellick,
whose office would lodge the complaint, declined to comment on the
decision to go ahead with the case, saying simply "the EU's moratorium is
illegal under WTO rules and needs to be lifted."

A group of EU countries including France has placed a moratorium on
approving GMO imports, effectively halting the trade.

The United States contends that the ban, applied since 1999, harms its
exports of maize, cotton and soya.

Washinton has considered filing a case against the EU for several months,
but delayed because of the war with Iraq, officials have said.

In January, Zoellick stunned reporters when he announced that he
"personally" held "the view that we now need to bring a case" in the WTO
even though there was not an official government consensus on the matter.

Zoellick at that time was careful to note that a cabinet-level meeting
hosted by the National Security Council still needed to take place before
a decision could be made.

A formal meeting including the heads of the Agriculture, Commerce and
State Departments is no longer necessary, an official said.

"There's been inter-agency consultation at that level but without a
formal meeting," the official said, "the consensus is there."

Senate Finance Committee Chairman Charles Grassley, who has been a vocal
proponent for filing a case, separately summoned a group of senior
administration officials to his Capitol Hill office this week to press
for filing a case.

EU Trade Commissioner Pascal Lamy has said in recent months that if the
United States did file a case, the EU would win.

"We would win a case like this," Lamy told reporters in Washington in
March after meetings with US lawmakers and administration officials,
including Zoellick.

And EU officials have suggested that there would be a consumer backlash
against American goods resulting in boycotts of American food products.

The spat comes on the heels of strained US-EU relations over the war in
Iraq and a separate trade dispute over tax breaks that benefit US
exporters such as Boeing and Microsoft.

Earlier this week, the EU was authorized by the WTO to levy up to 4
billion dollars in sanctions against the United States for tax breaks
given to US exporters that have been found to be illegal under the rules
of the Geneva-based trade body.

                                  PART II
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TITLE:  Grassley sets deadline for administration on EU biotech case 
SOURCE: Inside Trade, USA
DATE:   May 9, 2003

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Grassley sets deadline for administration on EU biotech case

Senate Finance Committee Chairman Chuck Grassley (R-IA) announced this
week he has given the White House what he called an ultimatum, demanding
that the Administration set within the next two weeks a "date certain"
for filing a World Trade Organization challenge against the European
Union's moratorium on approvals of biotechnology. But he already
predicted he did not think the Bush Administration will have made a
"final decision" on such a case in two weeks.

Grassley said if the Administration cannot give him "good news" in two
weeks, he will begin a public campaign from the Senate floor to demand
White House action. This would include rallying support from other
senators, he said in a May 6 interview with Iowa farm broadcasters.

The Administration has repeatedly signaled that it is likely to file a
complaint, but it has been unwilling to set a date by which it will take
that action, or to explain what factors will determine the timing.

After a May 8 meeting with "about a dozen" senior staff members of the
U.S. Trade Representative's office, the Department of Commerce, the State
Department and the National Security Council, Grassley said the
Administration appears to share his concerns over the EU biotechnology
moratorium. The Administration is trying to generate more support from
other countries before filing a WTO complaint and is trying to tie up
"loose ends," he said.

"At least one of the loose ends would be checking with other countries
that would be supportive -- or to be supportive -- of the Unites States
so it's not seen as just the U.S. versus Europe," Grassley said. He said
that he left the meeting with "some comfort about what they are going to
do, not exactly when ... I get a feeling that they are moving very, very
swiftly," though not fast enough to produce a final answer in two weeks.

Grassley would not name the staff members who attended the meeting,
except to say that they included Allen Johnson, USTR's chief agricultural

He admitted that there is little he can do to force the Administration's
hand in the short term, because it would take too long to try to pass
legislation or even a resolution in the Senate demanding the
Administration bring a WTO complaint. In a statement issued after his
meeting, he said he expected a "progress report" on the issue from the
Administration in two weeks.

Grassley said he remains optimistic that the Administration will move
forward with a WTO complaint and that he will not have to make the case
on the Senate floor. "I am not anticipating -- because of our meeting --
that I have to do that," Grassley said.

In a related development, Finance Committee Ranking Member Max Baucus (D-
MT) also called on U.S. Trade Representative Robert Zoellick to launch
such a case immediately. With the Doha negotiations stalled over
agriculture, Europe needs to recognize that market liberalization is not
a one-way street, Baucus said in a May 7 letter to Zoellick.

Grassley said he is "very negative" about the possibly of reaching an
agreement on agriculture at the WTO ministerial in Cancun in September.
Zoellick has expressed the hope that EU member states would approve a
reform package for the Common Agriculture Policy, which would give
theCommission more flexibility in the negotiations. But Grassley said, "I
am pessimistic," about negotiators making agriculture progress in Cancun.