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TITLE:  Zoellick Says WTO Biotech Ban Case Aims to Quell Fears
SOURCE: Bureau of International Information Programs
        U.S. Department of State, Washington File
DATE:   May 14, 2003

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Zoellick Says WTO Biotech Ban Case Aims to Quell Fears

U.S. Trade Representative Robert Zoellick says that after nearly five
years the United States is finally acting to challenge in the World Trade
Organization (WTO) the European Union (EU) moratorium on food derived
from biotechnology because harm from the EU stalling has begun to spread

At issue is the halting of EU approval, starting in October 1998, of any
new agricultural biotech products for planting or import. Zoellick blamed
the regulatory impasse on some EU member states that have blocked new
biotech applications in what he said was a violation of the EU's own
rules and a rejection of the EU's own scientific committees' advice.

At a May 13 briefing announcing initiation of consultations, the first
step in the WTO dispute-settlement process, he said that despite attempts
by the European Commission to resolve the impasse, those EU member states
have erected hurdle after hurdle.

"The commission does not control this one," Zoellick said. "This is one
that the member states have controlled."

He said the EU moratorium was effectively halting development of
biotechnology, blocking its benefits, especially in developing countries.
Developing countries fear to plant any biotech crops because they are
concerned that the EU would block all of their agricultural exports if
they do so, he said.

"In places where food is scarce or climates can be harsh," Zoellick said,
"increased agricultural productivity through biotechnology can spell the
difference between life and death, between health and disease, for
millions of the world's poorest people."

Biotechnology not only boosts crop yields, he said, but also reduces
pesticide use and soil erosion.

After five years of waiting patiently, he said, the United States was
taking its case to the WTO now because no end to the impasse was in
sight. He said the moratorium violates a WTO agreement that requires
scientific justification for food safety regulation and requires
implementation of such regulation without "undue delay."

"The United States is not seeking to force food on consumers in Europe or
elsewhere," Zoellick said. Consumers have the right to choose, he said,
"but they cannot exercise this right in a system that blocks their access
to food that is safe and healthy."

He rejected any suggestion that he acted just now to get even for an EU
move toward retaliation against the United States in another WTO case,
one that the United States lost regarding U.S. Foreign Sales Corporation
(FSC) export subsidies.

"I'm absolutely denying that," Zoellick said.

Zoellick's action followed months of complaints from Congress, including
from top Republican leaders such as Speaker of the House of
Representatives Dennis Hastert and Senate Finance Committee Chairman
Chuck Grassley.

"It's sad that leaders of southern African countries with starving
populations have rejected U.S. food aid of biotech products due to fears
of losing export markets in Europe," Senator Grassley said in a statement
issued after Zoellick's announcement.

"As long as the European Union's moratorium stands, other countries might
put their own populations at risk in an effort to comply with the
European Union's misguided policies," he said.

Following is the transcript of the press conference released by the
Department of Agriculture:

(begin transcript)

Press Conference with Agriculture Secretary Ann M. Veneman and U.S.
Special Trade Representative, Ambassador Robert T. Zoellick regarding the
EU Moratorium on Biotech Crops and Food Tuesday, May 13, 2003

SECRETARY VENEMAN: Thank you very much for being here this morning. We
are very pleased this morning to have Ambassador Zoellick with us once
again at USDA. We have worked in a very strong partnership, as we worked
on agriculture trade issues which are so critical to our farmers and ranchers.

We are joined on the podium today by some special guests whom we will
introduce and you will hear from in just a few moments. We are also
joined by ambassadors or representatives from Canada, Argentina, Egypt,
Australia, Chile, Colombia, El Salvador, Honduras, Mexico, New Zealand,
Peru, and Uruguay, and we welcome all of you and thank you very much for
being here today. We truly appreciate your participation.

Ambassador Zoellick and I continue to work closely together on behalf of
America's farmers and ranchers to open up new market opportunities. This
is a mission of which the President is deeply committed because, as you
know, when the President talks about trade, he usually talks about
agriculture, and when he talks about agriculture, he usually talks about

About one in three acres of planted crops in this country goes to the
export market, with about one-fourth of gross agricultural receipts are
from exports, so trade is crucial to American agriculture. With the WTO
negotiations and an aggressive agenda of Free Trade Agreements, we have a
full plate to open markets, but maintaining existing markets must be done
in parallel to opening new ones, and we have to hold countries to the
commitments they make in trade agreements.

With the action that we're announcing today, we are availing ourselves of
our rights under the WTO, rights for which we negotiated in good faith,
and we're fulfilling our commitment to fight for the interests of U.S.
agriculture when other countries fail to meet their obligations.

So I'm very pleased to introduce to you our USTR, the United States Trade
Representative, Ambassador Bob Zoellick.

AMBASSADOR ZOELLICK: Well, thank you very much, Ann. It's always a
pleasure to come over to USDA and work with the Secretary and her
colleagues, and I want to thank all of you for joining us today. The
world is on the threshold of an agriculture revolution that can
strengthen nutrition, health, and the protection of the environment.
Biotechnology, the science of making crops more resistant to disease,
pests, and drought, has dramatically helped farmers, large and small,
around the world.

By boosting yields, biotechnology increases farmers' productivity and
lowers the cost of food for consumers. At the same time, it's helped
protect the environment, by reducing the use of pesticides and preventing
soil erosion, and new crops offer the promise of something greater still
-- foods fortified with nutrients that could help stem disease or even
prevent blindness in children.

Average families, especially those that have to stretch a hard-earned
dollar, are the prime beneficiaries, and Americans know the benefits of a
wide variety of plentiful, wholesome foods at low prices.

In developing countries, the potential benefits of biotech foods are even
greater. In places where food is scarce or climates can be harsh,
increased agricultural productivity through biotechnology can spell the
difference between life and death, between health and disease for
millions of the world's poorest people.

This is a clear case in costs. The human costs of rejecting this
agricultural technology without good reason are enormous. This is why the
United States today is requesting consultations in the World Trade
Organization with the European Union over its ongoing moratorium on
agricultural biotech products, which is in complete violation of
international trade rules, the European Commission's rules and Europe's
own scientific analysis.

And we're pleased to be joined as co-complainants by Argentina, Canada
and Egypt, and as the Secretary mentioned, we'll be joined, as third
parties, by Australia, Chile, Colombia, El Salvador, Honduras, Mexico,
New Zealand, Peru and Uruguay.

So developed and developing countries from around the world share the
concerns that prompted the United States, after waiting many years, to
pursue this case. And as the Secretary said, we're honored to have
ambassadors and diplomatic representatives from these countries with us
today. We appreciate you being here, and we very much thank you for your

For almost five years, the European Union has arrested action on
applications for new biotech food products. Even though the EU has an
elaborate process in place to consider such applications, including the
safety of its products, it vetoed its own rules and procedures.

The EU has disregarded the advice of its own scientific committees and
its own commissioners without any scientific justification. Some
commissioners have publicly called the moratorium illegal and
unjustified, and they're right. The EU is violating basic WTO obligations
to maintain a food approval process that is based on "sufficient
scientific evidence" and that it acts without "undue delay."

For some five years, the United States has waited patiently for the EU to
lift its moratorium. For five years, we've been told by European
officials that a change in policy is just around the corner. But around
every corner we find a new roadblock.

First, we were asked to wait until new biotech approval regulations were
drafted. Then, it was to wait for a labeling scheme, and then to wait for
rules on legal liability and then to wait for new regulations on where
biotech crops can and can't be planted. Even senior European Commission
officials admit that on biotech, the goal posts just seem to keep moving.

As a world leader in science and technology, and as a leading proponent
of multilateral trading rules, the EU bears a responsibility for ensuring
that its health and environmental policies have a sound scientific basis
and that they follow agreed international and multilateral norms.

There are important principles at stake. EU manufacturing and service
industries would object vehemently if others stymied their productivity
and income gains from innovative, safe technologies. Farmers around the
world also want to look to a future of innovation, high productivity and
scientific advances.

Some have asked, if agricultural producers have waited five years for the
EU to act, why not wait longer for facts to counter fear, for scientists
to counter special interests that hype hysteria?

Sadly, as we've waited patiently for European leaders to step forward to
deploy reason and science, the EU moratorium has sent a devastating
signal to developing countries that stand to benefit most from innovative
agricultural technologies and some are using the EU's continuing
violation of WTO rules as a justification for agricultural protectionism.

This dangerous effect of the EU's moratorium became painfully evident
last fall when some famine-stricken African countries refused U.S. food
aid because of fabricated fears stoked by irresponsible rhetoric about
food safety.

The negative effects of the EU moratorium are not limited to countries
experiencing famine. As a major importer of food, Europe's decisions have
ripple effects far beyond its own borders. Uganda refused to plant a
disease-resistant type of banana because of fears that it would
jeopardize exports to Europe.

India, China, and countries in South America and Africa expressed fears
that their exports to Europe would suffer from planting biotech crops.
Overwhelming scientific research shows that biotech foods are safe and
healthy, a conclusion that the EU's own directorate general of research
publicly acknowledged two years ago.

There are numerous scientific studies one can read to back up this
conclusion, including reports from the National Academy of Science of
both France and Britain. But perhaps the best evidence is everyday life

As the French Academies of Science and Medicine pointed out last year,
millions of North Americans have been eating biotech food every day for
years and not a single adverse health consequence has been documented. I
have to guess that many Europeans agree because, on my flight home from
Europe last week, I certainly didn't notice European tourists coming to
America lugging suitcases stuffed with food.

The United States is not seeking to force food on consumers in Europe or
elsewhere. We believe consumers have the right to make their own
decisions about what products to buy, but they cannot exercise this right
in a system that blocks their access to food that is safe and healthy.

At the same time, we are committed to our strong economic relationship
with the European Union. The EU is a valued economic partner for all of
us. Yet, just as the EU brings cases to the WTO when it determines
there's a violation of key rules, we and others will employ the
multilateral rules to the same end. That's why all of us created the WTO
and why we support it.

We are taking this action together because the stakes are high. For
American farmers, the cost in lost sales runs into the hundreds of
millions of dollars a year. For the world, the stakes are even higher.
Agricultural biotechnology offers great promise for raising farm incomes
abroad, nourishing the world's expanding population and improving
agriculture's environmental sustainability.

Now, others are much better qualified than I am to speak on agriculture,
science and development, so we're honored today to have some notable
experts and practitioners of agricultural biotechnology from around the world.

Dr. C.S. Prakash is here from Tuskegee University. And as he will
explain, he has organized a statement of support of agricultural
biotechnology signed by more than 3,200 scientists worldwide, including
20 Nobel Prize winners.

A special word of thanks also to Mr. T.J. Buthelezi, a biotech cotton
farmer, who's here from South Africa. I first met Mr. Buthelezi when I
was in Africa last year, and I was very pleased that he could come all
the way from KwaZulu-Natal, South Africa, to be with us. And for those of
you that know a little bit about African history, you'll recognize that
Mr. Buthelezi is from a family whose name rings with Africa's heritage.

We're also very glad to have with us Dr. Diran Makinde, Dean of the
School of Agriculture at Venda University in South Africa, and Dr. Ariel
Alvarez-Morales, the principal scientist at the Center for Research and
Advanced Studies in Irapuato, Mexico, to talk about the benefits of
science and biotechnology to developing countries. And we look forward to
hearing from each of them in a moment.

But in closing, let me summarize with a word about what this case is and
is not about. We're not asking the EU to disregard its regulatory
protections. Indeed, we believe that scientific regulation is essential.
But we are insisting that the EU comply with its international
obligations and its own rules and follow a scientific rules-based review
of applications for biotech foods.

We're not trying to compel consumers to eat certain types of foods. But
we do believe that the EU should allow consumers to make their own
choices, and to do so with information backed by science, not rumors
stoked by fears.

We pursue this case with farming countries around the world, big and
small, developed and developing. And we stand here today because there's
an urgent need to act now, and reverse the effects of Europe's illegal
and unjustified moratorium.

Now, it's up to Europe. The legal case is clear. The scientific evidence
is overwhelming. The humanitarian call to action is compelling. Under the
WTO rules, we'll begin consultations with the Commission, and we hope
that the EU will take the opportunity to lift the moratorium, as the EU
officials have repeatedly said they aspire to do.

Thank you very much.

SECRETARY VENEMAN: Thank you very much, Ambassador Zoellick. I think you
can see the strong partnership that we have with USTR, as we have taken
this action today. Increasing economic prosperity for all Americans,
including our farmers and ranchers, is one of the top priorities of the
Bush Administration.

There are two main ways to produce economic growth for our farmers and
ranchers. One, we can increase productivity; second, we can expand
markets. This case is about both. Biotechnology is helping farmers
increase yields, lower pesticide use, improve soil conservation and water
pollution, and it helps reduce hunger and poverty around the world.

Farmers here and elsewhere must be assured that their crops won't be
unfairly rejected simply because they were produced using biotechnology.
The EU actions threaten to deny the full development of a technology that
holds enormous potential and potential benefits to both producers and
consumers world-wide, while it also provides a very significant means to
combat hunger and malnutrition that afflicts hundreds of millions of
people around the developing world.

This case is also about playing by the rules that are negotiated in good
faith. The European Union has failed to comply with its WTO obligations.

We are pleased to be supported in our efforts, not just by the people
here on the day of today, but also by nations represented in this room
that recognize the potential of biotechnology, and that our regulations
must be based on sound scientific principles.

It is now my pleasure to introduce our special guests today, and I'd like
to begin by introducing Dr. Prakash for a couple of remarks, and he will
be followed by the others.

DR. PRAKASH: Good morning. Thank you very much, Secretary Veneman, and
Ambassador Zoellick. It's a great honor for me to be here and to talk to
you a little bit about our declaration that you mentioned.

Three years ago a group of scientists working in biotechnology saw some
of the signs on the wall about an emerging opposition coming to the so-
called GM [genetically modified] groups, especially in Europe, but also
world-wide. And so we got together and along with my friend, Greg
Concord, here, of CEI, we drafted a declaration, of which you all are
going to get a copy, which essentially says that biotechnology is a
powerful and yet safe means of enhancing the quality of life by improving
agriculture and health.

And genetically modified crops neither are new nor dangerous. But they
are a more precise method of altering and improving our crops. We have
been genetically modifying crop plants by conventional means for nearly
thousands of years, but by more scientific means for the past 100 years.

And then the declaration goes on to say that this can bring great
benefits. And it's subjected to enormous regulations here to insure the
safety of these crops prior to their commercialization. And it can,
especially in developing countries, it can help address hunger,
environmental degradation, and poverty by improving agricultural productivity.

And we launched about three years ago, and immediately hundreds and
hundreds of scientists signed on on the web and they continue to do that
at my website, And as Ambassador Zoellick mentioned, we
have twenty Nobel laureates who have signed onto that.

So I want to take this opportunity, if you please, permit me to present
you with a copy of the declaration.

Thank you.

Agricultural biotechnology crops are now grown in more than 15 countries,
in about 130 million hectares. And as Ambassador Zoellick mentioned,
almost every scientific academy and medical academies have come in
support of this technology. And personally, as someone from India, I
recognized the value of genetic technologies, and have been a recipient
of, grew up during that time when the green revolution took off.

But all over the world, the genetic technologies, and many agricultural
technologies, have literally transformed and enhanced the quality of life
for most people on this planet. But yet, the new technologies need to be
continuously developed, and it is important that we have another 2
billion people in this world who do not have the luxury of taking their
daily food for-granted, but would one day come under the level of food
security that we enjoy here today.

And Europe is the cradle for biotechnology. As some of you might
recognize from my tie, I'm wearing an appropriate tie today, which this
year marks the 50th anniversary of the discovery of structure of DNA by
Watson and Crick. And Europe is where one of the very first transgenetic
crops, where GM crops were developed. And yet, if Europe by trying to
restrict the further development of this technology, is a loser. There
are many scientists from Europe. I am very worried about the development
of science and the brakes the moratorium has put on the scientific
development, not only in Europe, and as it was mentioned, all around the

For instance, when I travel in Europe, one of the things I do is I don't
say any more that I work on the bio-engineered crops any more because one
of the first times that I said that to a lady sitting next to me in the
airport, she just changed the seat and looked at me as if I am working on
some biological warfare, or something like that.

And, again, that is really sad because a lot of us work in the area of
agriculture, and especially in developing new varieties, with a very
sound sense of commitment and pride as to what we have contributed to that.

And as the ripple effect that was mentioned, one of the instances is
rice, the most important crop in the world, grown by 250 million farmers
in tiny, little farms of less than one hectare, yet we need to produce
something like 60 percent more rice because of the expected increase in
the Asian population in the next 30 years, 4 billion people eat every day.

Thailand is the largest exporter of rice in the world. Had a wonderful
biotechnology program in the past 10 years, and yet because Thailand is
also a large exporter of rice, and although only 1 percent of rice from
Thailand goes to England, and yet because of the English reluctance to
eat GM rice, Thailand has practically stopped working on GM rice.

We could grow a pesticide-tolerant rice, for instance, that has been
developed and that the Thai farmers could share[?] pesticides. It also
means that some of the poorer farmers would deny the opportunity for
their children to benefit from the "Golden rice."

So I believe that, in closing, that this is a technology that has vast
potentially, especially in developing countries, because 70 percent of
the people living in developing countries are dependent on agriculture
and any technology that helps transform agriculture, helps bring an
element of profitability, helps cut down the costs in farming and helps
to improve the nutritive value of foods is going to benefit the great

Thank you very much.

SECRETARY VENEMAN: Thank you very much, Dr. Prakash.

And now it's my pleasure to introduce Mr. Buthelezi, who is a biotech
cotton farmer in South Africa.

MR. BUTHELEZI: Thank you, Secretary, and Ambassador Zoellick.

I am very happy to have this opportunity to say a few words, yes, of
course about the experience of this biotechnology, especially in my life.
I am from South Africa. My name is Tambiji Buthelezi, and I'm from South
Africa, KwaZulu Natal Province, Northern KwaZulu Natal, next to the
border of Mozambique.

I am the chairman of UBAMWA [ph] Farmers Association, with a membership
of 5,000 members and 50 farmers associations. We meet time and again in
our area, especially every month, to discuss our problems and to solve
the problem, maybe the issues if we want to talk to the government or to
approach the factories or companies or anything to negotiate for the
prices and many others.

So, in our area, we've been farming cotton for cash almost for 40 years,
and then all the time the usual cotton, the traditional cotton seed that
we use to plant, it did not save us or it did not give us enough. It
failed to put the food on our table. We failed to do that, although it
was the only alternative that we have because in KwaZulu-Natal, in the
area where I come from, there's no factory. There's no other means of
making money besides this.

In one of our meetings, a gentleman from cotton seed came and introduced
this new technology. Yes, of course, the farmers were fear in their
hearts, so many of them. And then when he make his presentation, most of
the farmers did not accept it because they couldn't believe it, the way
he was telling them that it was that, and that, and that, and so on and
so forth.

Then, when he leave the room, I follow him because deep down in my heart,
I make a decision that I'm just going to take a risk and find out if it
is true or not and, yes, of course, I went out. I was growing four
hectares of cotton. That year I decided to grow two hectares with
original cotton, the usual cotton that we use, and two hectares with the
new technology, Bt technology.

To my surprise, I want to tell you the cotton grows the way I cannot
explain due to the shortage of time, yes, of course. In that year, the
following year, extended my hectares to 8 and then the following year to
12, and now I'm planning to extend it to 30. Why? Because, one, the
benefit of that. When I was planting the 4 hectares, I was able to handle
the 4 hectares or to manage it.

But when the new technology comes, first of all, I must tell you that in
4 hectares, in 2 and 2, and then in the other one, I was able to produce
2 hectares -- because there was a flood disaster -- in 2 hectares, I was
able to harvest only 3 bales. That is usually cotton. And with another 2
hectares that is Bt cotton, I was able to harvest 12.5 bales. So you can
see that the benefit was more better on the other side, and the other
side it was literally very less.

And then when we meet with farmers, all they cry the same cry that we are
not going to benefit this year, but because of the Bt I was able to make
money that year. The following year came, and I came altogether to the Bt
technology, and I put aside the other cotton.

You know what happened, I was surprised. Yes. Number one, when I went to
the field, as usual, a farmer as usual to scout and see what is happening
with the other farmers who go down to their field only to find that in my
field, my cotton has no problem. It doesn't need a spray because the
technology made it possible to reduce 10 sprays that I used to do to 2 sprays.

So when I went down to the field, I would just go and sit down, and look
around, and find that I had nothing to do. Then, I'll go to under the
shade and enjoy the fresh air there. My other farmers, this side and this
side, would be busy up and down spraying because they didn't go for this.

And I want to tell you, as time goes on, I'm telling you 90 percent of
the farmers in my area have gone for this, and you know why, what
happened? When I was able to spray or to sit down and not to spray, to
spray only for two, I realized that I can expand my field and make more
field. That is why I'm planning to plant 30 hectares this season.

At the same time, you know what the other benefit is one -- I used to
get, everyone used to get 6 to 7 bales per hectare which the traditional
or usual cotton. But with this new Bt cotton, with the technology, you
know, up to 15-17 bales per hectare. And you know the first time I was
able to do this, I took my cotton, and I sold it. After selling it, I was
so anxious to get home so that I can sit down with my wives and tell them
what is happening. Yes, of course, I ran -- the bus was so slow -- so
that I could be at home.

But when I got home, I called all my wives, the three of them, and sit
down with them, and I say to them, "Look, people," I said -- usually I
used to sit down after the harvest and say, "Well, this is what we have
done. This is the money that we've made," and then we are paying the
laborers, we are paying our debts here, and then it's going to be short.
Maybe we don't have money enough for ourselves to take children to the
school, and so on and so forth.

But now I was able to sit down and tell them that this is going to pay
this, and this is going to pay that debt, and this is for the school, and
this, and what about the rest? And, you know, from that time, I was very
happy that this new technology is able to put money in my pocket and yet
to work smart, not hard. Farming has become a smart work now, instead of
being hard work.

Thank you very much for this technology.

SECRETARY VENEMAN: Well, thank you very much for being here today.

And I would now like to introduce Dr. Makinde, who is the dean of the
School of Agriculture at the University of Venda for Science & Technology
in South Africa.

Thank you for being here.

DR. MAKINDE: Thank you very much. I want to thank Ambassador Zoellick for
this opportunity to address this gathering.

I've been in the U.S. now for about a week. I was at MSU, attending a
program in biotechnology.

I just want to tell you a little bit about Africa's statistics that makes
this technology a wonderful tool, a new tool that could go with what we do.

Seventy percent of Africans depend on income from agriculture. It
actually provides employment for 60 percent of the people, and if you
look at grain production in Africa, the average reproduction is about 1.7
tons per hectare, compared with the group average of four tons per
hectare. There are about 800 million people on the continent, and I can
tell you, 50 percent of course live on less than one dollar, one U.S.
dollar a day. Actually, about 65 cents. So there is a lot to talk about
on food insecurity because the population growth rate is about 2.8
percent, and agricultural production, rate is 2 percent. So we are always
at a deficit, and most of the time we import grains to meet the shortfall.

Apart from that, 34 percent of the children there are malnourished. So
there is serious starvation. And so it's like the story told, that these
are toys -- don't touch them.

So it's difficult for us. So the governments, the scientists, the NGOs
[non-governmental organizations], the farmers are ready for this
technology. Well, there are constraints. Number one constraint is the
anti-campaigners. They've succeeded in infiltrating the policy makers in
Africa, and that is why you see there are a lot of inconsistencies.

The number two is the problem of the regulations that affects trade.
South Africa, where I come from, is the only country in Africa that has
commercialized GM crops. We have commercialized white maize, which is
about 6 percent. We've commercialized yellow maize to the tune about 24
percent of our production. We've commercialized soybean, and of course
there is 80 percent adoption rate of cotton in South Africa.

So we've been in [inaudible] but what has happened? Namibia, last year,
refused to import South African yellow maize for its livestock because
Europe will not take it.

They say if you feed your cattle with South African yellow maize, we are
not going to take your beef.

So it's like Kofi said in Ethiopia. You cannot wake up somebody who is
pretending to sleep. So we have these problems, and these are the aegis.
Of course there are other constraints in terms of the building capacity,
building the infrastructure, and then the limited public and private
partnership for the biotechnology.

But over and above, the people are ready. We believe that it is better to
give somebody food to eat, that will sustain him or her for another ten
years, than to starve that person and to die in a few days time. This is
our story. We're now in a situation, we are Africans in a situation where
two elephants have gotten, and that is Europe and America. The two
elephants are fighting and it's Africa that is suffering now. Thank you.

SECRETARY VENEMAN: Thank you very much, and finally, I'd like to
introduce Dr. Alvarez-Morales, the principal scientist in the Department
of Plant and Genetic Engineering at the Center for Research and Advanced
Studies in Mexico.

DR. ALVAREZ-MORALES: Good morning to you all. Thank you very much,
Secretary, Ambassador, for giving me the opportunity to speak today.

It has been claimed that biotechnology is a tool that will help alleviate
hunger in the world. This potential, however, has not yet been realized,
and there are issues that have to be fully addressed before biotechnology
can be implemented in developing countries.

Trade barriers have a negative effect on farmers, that could potentially
use GMOs [genetically modified organisms] because their products may not
be accepted in those countries that oppose this technology. Most
important, over-regulation and regulation that is not science-based
increases the cost so much, that research institutions and universities
that may develop specific products aim to solve social problems in the
developing countries, and thus help the small farmer, will most likely be
not positioned to cover the costs imposed by such regulation, leaving
biotechnology in the hands of only few, very large companies that will
only invest in products with high market value, denying the small farmer,
and subsistence farmer, of the benefits of this technology.

Regulations are necessary to the safe release of GMOs, both in terms of
the environment and health. But this should not be a barrier to stop the
technology from reaching those that may need it the most.

In closing, I would just like to mention that at Center for Research and
Advanced Studies, the research institution I come from, we are at the
moment developing products such as aluminum-tolerant maize, that may be
used in the more than 5 million hectares of land that we have with this
problem. Virus-resistant potato for the small farmer, and bananas to
deliver vaccines to protect our children from disease such as cholera. We
don't want this research to be just an academic exercise. It must reach
the people that really need it. Thank you very much.

SECRETARY VENEMAN: Thank you, and thanks to all of our special guests who
are here today; very excellent presentations.

We'll now take questions from the media who are here.

QUESTION: Ambassador Zoellick, in filing this case, do you think that the
real fight -- Richard Cowan from Reuters.

In filing this case, do you think that the real fight will be over in the
future, over the labeling and traceability regulations that the EU
promulgates, and on the nine countries that are joining the case with
you, is it just coincidence that many of them are countries that want to
get into a free trade agreement with the United States?

AMBASSADOR ZOELLICK: Well, on your first question, what this case is
about is the moratorium, and what our emphasis today is what's been in
effect for some five years, which is a moratorium that has flatly blocked
this development. So you can't get to the issue of labeling until you've
dealt with the question of a moratorium.

Now countries have dealt with the issue of labeling. USDA [U.S.
Department of Agriculture] has, as you may know, developed standards for
an organic line, so that if people want to have products that meet
various standards for organic foods, including without having the
genetically modified organisms as a part of them, they can have that
product. That's part of the regulatory system, it's part of the labeling
system, and people pay for it.

But as the people here demonstrated, what would be tremendously
unfortunate is to stymie the development of agricultural products that
not only give consumers choice, which is what the key issue is here, but
give producers choice, particularly in the developing world. So that's
the focus of this case and our effort.

Actually, there's a total of some 13 countries, including the United
States because you probably left out Egypt and Canada and Argentina, and
obviously if you actually look through the list, you have countries that
cross a number of interests.

Canada has a free trade agreement with the United States. It's not
rushing to create one. A number of the countries in Latin America are
part of a free trade area of the Americas process, but there's other
countries on that list that we're not in the process of negotiating a
free trade agreement with, and they can speak for themselves, but I think
what unites us together, and frankly, there are many other countries that
I've spoken to, is first the concern for science-based regulation of
agriculture. That's absolutely critical to make our agricultural system
work as part of the WTO.

Second is a recognition of the possibilities of biotechnology for
consumers, for nutrition, for the environment, and that's what brings
these 13 countries together, and as I said, there are many other
countries that frankly are very interested and supportive of this effort.

For some of them, the added cost, particularly for poor countries, of
taking WTO litigation may be a limitation. But we hope to work with more
countries as we move this forward.

Finally, again, let me emphasize what Europeans have said. European
commissioners have acknowledged that this is violating the WTO rules and
is violating their own rules.

So we hope that this will move the process forward so we can take a
technology that has tremendous potential for the world, developing world,
but for consumers all around the world and move it forward.


QUESTION: Thank you. Ambassador Zoellick, just to follow up on the
labeling, the labeling suggested by the European Union would not be the
same as is the case that USDA has for organic. It would require that food
that is GMO is so stated and that there is traceability, which does not
exist in organic. What is your position, and Madam Secretary, your
position on this proposal of the EU?

AMBASSADOR ZOELLICK: Well, as I've emphasized, this is a case about the
moratorium. The traceability -- it's not just a labeling rule. The
traceability and labeling requirements are something that have moved
through the European process, they've changed in various elements,
there's issues of advantageous presence, there's issues about whether you
cover various elements of the product that you can't determine whether
that, in the final product, they've actually had genetic modification,
for example, in oilseed, and we're discussing those issues with the
European Union.

But that process isn't completed yet, and so it's certainly inappropriate
for us to take any action on that.

What is critical is the points that we've stressed, which is a moratorium
blocks the development of biotechnology, in Europe, in the developing
world, in the United States, and what has been very apparent to me over
the past couple years is how the European moratorium, which I know some
are trying to lift but has not been lifted, is something that is having a
very negative effect beyond Europe, and to the whole world.

So for Europeans that ask me, well, gee, you know, we're trying to deal
with this in a European context, I would urge them to look beyond the
shores of Europe, to Africa, Asia, Latin America, where a lot of the
countries are that are participating in this effort, because that's where
the effect of their moratorium is most deleterious.

SECRETARY VENEMAN: If I might just follow up, Elizabeth, on the labeling
issue, I think one of the reasons that it's been difficult for Europe to
come to consensus on traceability in labeling is because it's very
difficult to find the means by which to achieve what they're trying to
do, and that's why, as we've talked to the Europeans, we have held out
things like our organic law as the kind of process where you're
positively labeling what's in or not in a product as opposed to trying to
theoretically label, which, to some extent, is what their proposal does.

So certainly we think, as we've talked with some of the people in Europe,
that they ought to look to the model of our organic law.


QUESTION: I'm Jutta Hennig from Inside U.S. Trade. I have a question for
Ambassador Zoellick; a clarification. You spoke about your decision to go
forward on consultations, and yet you also referred to a case [?]. If the
consultations do not produce the desired result of lifting the
moratorium, is there consensus within the administration and with the
White House to then proceed to the case? An actual challenge of a panel?
Or would you need to make a second decision? And when to expect to file
for the consultation, and to whom may I speak about the exciting trade
details of the legal case?


AMBASSADOR ZOELLICK: The answer to your first question is yes. Which
means we plan, if we don't get satisfaction lifting the moratorium, we'll
take the next step in the dispute settlement process of bringing the case
[audio break]

Your second question was when do we file the consultations? Now. Today.

QUESTION: [Inaudible]

AMBASSADOR ZOELLICK: Today. Heute. [German for today.]


AMBASSADOR ZOELLICK: And I think your third question was a derivative of
the second. Because I answered it --

QUESTION: [Inaudible]

AMBASSADOR ZOELLICK: The details of the case.

QUESTION: [Inaudible]

AMBASSADOR ZOELLICK: Our general counsel, John Veroneau, courageously
raised his hand.


QUESTION: [Inaudible]


SECRETARY VENEMAN: Could you identify yourself, please?

QUESTION: Yes. Paul Magnuson with Business Week Magazine. The U.S. food
industry says the labeling, and particularly the traceability standards
are unacceptable. They wouldn't work with the U.S. agricultural system,
and they are, in effect an attempt to exclude GM food by another way.
Would you agree with that?

AMBASSADOR ZOELLICK: Today, Paul, the emphasis for us is on the
moratorium. We discussed very much with the food industry, the producers,
the processors, and others, about the challenges of the traceability in
labeling regulation. And, as you know, one of the points we made is that
some of the overflow, or the ripple effect of European behavior at the
moratorium has led others to put together various regulatory schemes that
might impose.

I read a news story about how Argentina is worried about losing sales to
Brazil, even though Brazil is a biotechnology producer, because of some
of the additional steps that are going forward.

So we'll be discussing those issues country by country. But you can't get
to labeling unless you let the product in.

And so today what we're emphasizing is we've tried to wait five years. I
know that some commissioners have emphasized their commitment to this
process. I saw my friend, David Byrne, sort of say: Well, gee, so why
now? I know David Byrne a good person and he's trying to move this
forward. But the fact of the matter is the Commission doesn't control
this one. This is one that the member states have controlled. And
Commissioner Byrne colleague, Commissioner Wallstrom, said as recently as
last autumn, that "I've stopped guessing when the moratorium will be
lifted." That's the words of a commissioner of the European Union. And
she went on to say the member states keep trying to move the goalpost.

The key here is they don't know. We've been patient. We haven't seen a
result. And the effect is not just on Europe; the effect is on the world.
That's why we're here today.

And remember, there's nothing about bringing a WTO case that stops
anybody from lifting the moratorium. We hope they lift it.

SECRETARY. VENEMAN: Way in the back there.

QUESTION: [Inaudible]

SECRETARY VENEMAN: Could you please identify yourself?

QUESTION: Oh, sorry, it's Corbett Daly from [Inaudible]. If this is such
a no-brainer decision, what took you so long?

AMBASSADOR ZOELLICK: Well, I didn't say it was a no-brainer. You did. We
clearly understand that some in Europe have tried to overcome what they
acknowledge is a violation of WTO rules, and of commission rules, and
frankly, not based on science. And I think a number of them recognize the
ripple effects, or the overflow effects in terms of the developing world.

So frankly we try to work with it. We've tried to be patient. We've tried
to see some result. But at least what moved me, as I've explained, was to
see the fact that this has broadened from a European problem into a
global problem. And so, whether it be our efforts to try to sell oilseeds
in China; whether it's the report I read about Koreans saying they don't
have biotech wheat; whether it's the issues in South America, with
Argentina and Brazil; whether it's as Dr. Prakash mentioned, the fact
that Thailand, which exports just a small amount of rice to Europe, is
now pulling back on their development of biotech, even though it would
have enormous benefits for their own public, and others. Whether it's the
problems of people in Africa.

The case of the fact that biotech maize already developed in South Africa
cannot now be sold to Namibia for cattle because the Namibians want to
sell their cattle to Europe. To say nothing of the problems of people who
were starving, and we talked with some of these gentlemen yesterday about
people in some of the countries that were denied food aid, crossing the
border to get the food aid, or going to the foodstocks. These people
wanted to live.

So the combination of these global effects led us to feel that we
couldn't wait any longer, our patience had run its course. And we hope
Europe will lift the moratorium, so we can go on to the development of
something that's going to be very important for humankind.


QUESTION: Steve Schiff with the BBC news. Can you give an estimate of how
much damage you think this has caused U.S. agriculture in terms of what,
if it ultimately comes to, that you might be seeking in sanctions?

And second, could you comment whether there's any relation in your timing
offered to the fact that the EU has recently asked for approval for $4
billion worth of sanctions against the U.S. on the foreign sales tax case?

AMBASSADOR ZOELLICK: Let me deal with the second question first, because
it's a very important one. The answer is no. And again, a point that I
would emphasize for a Europe audience is: We're bringing this case to the
WTO because we've all agreed the WTO is the place where we should resolve
disputes like this. We first, as I mentioned to Corbett, tried to work at
it, bilaterally consult, but after five years we feel the effects are
dangerous. And so it's time to move forward into the legal process.

The European Union also brings cases. The European Union has recently
filed a case -- I'm looking for Ambassador Thawley here -- against
Australia, on its sanitary and phytosanitary standards. And that's how we
use the processes.

And in the case of the FSC case, as I've said publicly, the FSC case is a
very complex case, but the European Union won, we appealed, we lost, the
Congress tried to change it once, the European Union challenged it again.
We appealed, we lost, and we're now in the process of trying to remedy
it, and as I said when Commissioner Lamy announced the next step in the
list, that's their prerogative. I frankly think the story's a little
overplayed. I think that what he was trying to do was to say this is the
next step and he didn't say what definite action he would take, and he
has made, consistently, the same point that I'm making today.

Our point is to try to get compliance with the rules. Our goal is not
sanctions. Our goal is not to try to have a negative result. Our goal is
to have a positive result.

Just as he's trying to get the United States to remedy the FSC law, so we
want to try to lift this moratorium. But they're separate tracks. I've
discussed this with him. He views it the same way, just as we do in other

As for your -- the first part of your question was the loss. In direct
dollars and cents terms, we are currently losing out on a few hundred
million dollars of corn sales a year, and have for about four or five years.

But the bigger loss is the one that all of us are talking about today. I
mean, how do you put a value on the fact that Africans can't eat, or that
people won't have productivity gains, or that you're disrupting the
ability of Vitamin A for -- that there's 500,000 kids a year that go
blind because they don't have Vitamin A, and that's something that golden
rice with Vitamin A supplements can deal with. I mean, how do you put a
value on that?

How do you put a value on the fact that we've learned that the gains in
terms of soil conservation are absolutely enormous, and we have a package
for you on this, but I found these absolutely striking, is that there's
about -- soil erosion was reduced by about 1 billion tons a year from no-
till acreage. The conservation tilling with biotech could save $3.5
billion in water treatment and storage costs. Biotech rice is -- Dr.
Prakash was talking about -- is twice as resistant to drought and salt
water, and withstands temperatures that are about 10 degrees higher or
lower. Reduced pesticide use. 46 million pounds of active ingredients --
this is from Dr. Prakash's research -- for cotton and corn, have been
saved over the past eight years.

The Chinese Academy of Science talks about reduction in pesticide use by
80 percent, and this is an environment in which, in some crop areas,
Africans are losing about 80 percent of their product to climatic changes
like drought.

So you can put a value on some part of exports. I don't know if you can
put a value on some of the things that I mentioned, but they're
enormously important.

MS. : We have time for two more questions.

QUESTION: Thanks. Julie Ziegler from Bloomberg News. [inaudible] your
last two responses, you're saying that the timing of this is more because
of it's been hurting farmers, it's been trickling in, it's hurting Africa
as well, and that it has absolutely nothing to do with recent WTO
decisions brought by the EU such as FSC. Are you absolutely denying that
there is any link between --

AMBASSADOR ZOELLICK: Yeah, I'm absolutely denying that and let me go
back, to give you a little history of this, to add to your synthesis,
antithesis -- is that look -- this is an issue that Secretary Veneman and
I have been pressing our European colleagues on since we took office, and
I think the Clinton administration, you know, that preceded us, had hoped
that the process would resolve itself, and in the fact sheet we give you,
we give you a little bit of the deadline. But as I mentioned in my
opening remarks, there's just hurdle after hurdle after hurdle.

So during this time you have other actions. Some of that preceded the
steel safeguards case. The FSC [Foreign Sales Corporation] case began
about the same time, and probably -- you have to talk to trade historians
-- that was more connected, some believe, to the then-European
commissioners' view about the weighing of the cases dealing with bananas
and beef.

But that's not what this has been driven by, and, frankly, at least
speaking for myself, my conclusion was that the process -- I couldn't see
that there was a definite end date in the process, despite people's best
efforts, and I know a number of the commissioners are making best
efforts, but as Commissioner Wallstrom, with your synthesis/antithesis,
with Commissioner Byrne would have to say is: We don't know when the
end's going to come. So it's time to use the rules to move that process

That was one key point, and then the most important one is I do a lot of
traveling around the world, so I start to see the effects of these
things, and what I could see is that in country after country after
country, this was having a steamrolling effect and the real people that
are hurt are people like this, that are actually trying to eke out a
living or trying to improve the lot of their families, and that's
something that, you know, we needed to draw a line and say within the
WTO-based process we need to press this to lift the moratorium and I hope
the Europeans lift it as quickly as possible so we get on to the
development of this.

QUESTION: [inaudible] end in sight and [inaudible] you were still hopeful
six months ago?

AMBASSADOR ZOELLICK: As many of the colleagues here who cover me, I'm an
endlessly patient person and I try to work with my colleagues on
problems, but there's a point where, you know, where that sort of came to
an end, and I'll be honest in sharing with you. I mean, the events of
Africa, last summer, certainly were very significant in my overall
evaluation, as I hope they are in people in Europe.

QUESTION: A quick follow-up. One more thing which you can choose to deny
or not. How about the events of Iraq and what do you think it will do to
overall U.S.-EU relations?

AMBASSADOR ZOELLICK: Well, as I emphasized in my remarks, the United
States and Europe have a lot of economic interest together and as you
probably know, I just came back from Europe about a week ago. I'm heading
off to Europe later this week to talk with some other people in both the
business and government sectors.

I think Pascal Lamy will be at the same meeting I'm at. We'll talk
further. We're trying to push together our common interest, particularly
in the Doha agenda, and I won't give you the long advertisement about our
-- what we're trying to do to do that.

So I don't think it'll affect our efforts in that one whit, and I've
talked with Commissioner Lamy about this, and Ann's talked with
Commissioner Fischler. In the spirit in which we work, you know, we
alerted them, and I've been sort of obviously sending a variety of
signals, public and private, about the need to move forward with this,
and I certainly gave them a heads up about our final decision on this.

So I don't think it will affect the overall issues. The key question is,
you know, whether it will affect the European decision on the moratorium
and I hope that today will help Europeans understand the implications of
this for the developing world -- for nutrition, for health, for the

Those are issues that Europeans tell me they value a great deal and all I
can say is if they're concerned about the science, look at the French
Academy of Science, the French Academy of Medicine.

You know, there is a combined effort here by the National Academy of
Sciences of Brazil, China, India, Mexico, the U.K. [United Kingdom] and
the United States, that all came to these same conclusions.

You'll see other references in your paper. So what I hope we can do is
bring to the attention of people how important this is for development as
well as the fact that if we're going to have advances in productivity and
technology in manufacturing and services, why should we stymie
agriculture, particularly when much of the developing world depends on
agriculture for its livelihood?

QUESTION: What about Iraq?


QUESTION: [inaudible].

AMBASSADOR ZOELLICK: Well, I certainly felt, early this year, that, you
know, I was interested in trying to move this case, and I'm very glad
that we're launching it today.

SECRETARY VENEMAN: Thank you all very much.

(end transcript)

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