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9-Misc: U.S. and EU trade chiefs discuss ways to break WTO deadlock



                                 PART I
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TITLE:  U.S., EU trade chiefs discuss ways to break WTO deadlock
SOURCE: Reuters, by Doug Palmer
DATE:   22 Feb 2006

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U.S., EU trade chiefs discuss ways to break WTO deadlock

WASHINGTON - Top U.S. and European trade officials began two days of
talks on Tuesday, under pressure to bridge differences on farm issues
blocking a world trade pact and to keep bilateral disputes from
poisoning the atmosphere.

The meeting in Washington between U.S. Trade Representative Rob Portman
and EU Trade Commissioner Peter Mandelson comes with negotiations aimed
at reaching a new world trade agreement by the end of this year already
badly behind schedule.

"From a U.S. perspective, the best thing Mandelson could do would be to
lay out for Portman exactly on what basis the EU can be more flexible on
agriculture, particularly market access," said Sherman Katz, a senior
associate at the Carnegie Endowment for International Peace.

Mandelson has been offering "winks and nods of various sorts, suggesting
under some circumstances he might have some more room to get a better
offer from the EU," Katz said.

Countries face a April 30 deadline to agree on formulas for cutting
tariffs on agricultural and manufactured goods and for reducing trade-
distorting farm subsidies, a task they have repeatedly failed to
accomplish since global trade talks began more than four years ago in
Doha, Qatar.

The United States, Brazil and the Cairns Group of agricultural exporting
countries led by Australia want deeper EU farm duty cuts. But France and
many other EU members have resisted.

"There's no way that Mandelson can come out of the meetings with Portman
and announce (further farm concessions) because that takes a decision of
the EU Council of Ministers," said Frank Vargo, vice president at the
National Association of Manufacturers.

But the two trade leaders might still give the talks a boost by pledging
to open their markets to significantly more imports if others do the
same, Vargo said.

The EU has pushed advanced developing countries like Brazil and India to
do their part by opening their doors to foreign services companies and
manufactured goods.

Jeffrey Schott, a senior fellow at the Institute for International
Economics, said Portman and Mandelson could make progress on how
"sensitive" farm products would be treated in a new world trade pact.

The World Bank has estimated exempting just 2 percent of agricultural
tariff lines from the deepest cuts would give countries enough wiggle
room to protect their most attractive markets from increased imports.

The EU has proposed letting countries designate up to 8 percent of their
farm tariff lines as sensitive products, but has said it has room to
negotiate on that point.

"It'd be useful to get some clarification from the United States and the
European Union that, even for sensitive products, there will be very
substantial cuts in existing levels of protection," Schott said.

Portman and Mandelson also could discuss bilateral issues, including
Brussels' threat to reimpose sanctions on billions of dollars in
American goods in a long-running dispute over tax breaks for U.S. exporters.

Congress has passed legislation twice to address the issue and shows
little inclination to act again, despite a new WTO ruling against the
United States.

New EU sanctions would "a very, very bad thing" at a time when the two
sides need to be cooperating, Vargo said.

Brussels and Washington also are arguing over government subsidies for
aircraft rivals Boeing and Airbus and the EU's reluctance to embrace
genetically modified crops.

At the same time, the trading partners are mulling a joint case against
China for restricting imports of auto parts.


                                 PART II
------------------------------- GENET-news -------------------------------

TITLE:  GM Food Goes on Trial
SOURCE: AlterNet, USA, by John Feffer
        http://www.alternet.org/story/32317/
DATE:   16 Feb 2006

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GM Food Goes on Trial

The global jury is still out on whether GMOs are a boon or a bust.

The fundamental rule of retail is: The consumer is always right. The
World Trade Organization (WTO) has once again disregarded this rule by
declaring the majority of European consumers wrong.

In poll after poll, Europeans have voiced their skepticism of food
that's been altered at the genetic level. Their governments initially
responded with a moratorium on new GM products and subsequently adopted
a Europe-wide policy on product labeling. But in its latest ruling, the
WTO did some labeling of its own, declaring Europe's cautious policy on
genetically modified organisms (GMO) an unfair barrier to trade.

The 800-page report, the longest decision in the WTO's short history,
has not yet been released to the public. But the U.S. government and its
co-plaintiffs, Canada and Argentina, are already treating it as a
historic ruling. The European Union, on the other hand, has dismissed
the report as simply a ruling about history, since it lifted its
moratorium against GMOs in 2004. Still unclear is how the ruling will
affect different regions within Europe that continue to declare
themselves GM-free.

The Europeans will likely appeal the ruling. If it still goes against
them, they may well steal a page from their other longstanding dispute
with the United States over hormones in beef: Pay the penalty and
maintain the cautious policy.

What's the big deal? you might ask. They say tomato and we say GM
tomato, so let's forget about the whole thing. But the United States has
been downright pushy in its approach to biotech. The Agency for
International Development (AID) is a big booster of GM, and some
offending grain has found its way into shipments of food aid to GM-wary
countries. The Trade Representative's office pushes GM through bilateral
and multilateral treaties. The State Department tries to twist arms
through rather undiplomatic letters of protest, like the one it sent to
Nicosia in July when new EU member Cyprus proposed to put GM food on
separate shelves at grocery stores.

This pushiness is not simply a byproduct of the usual missionary
arrogance of Americans. The underlying story is that biotech has hit a
few roadblocks.

In 2005, according to the International Service for the Acquisition of
Agri-biotech Applications, the rate of growth of GM crops was 11
percent. That might seem like a lot. But it's the slowest growth rate
since GM was introduced in the mid-1990s. The rate is down from 20
percent in 2004 and 15 percent in 2003. Even taking into account the
saturation of certain markets -- GM soy, for instance, now accounts for
85 percent of the soybeans grown in the United States -- such a slowdown
translates into lost revenue for biotech firms and less buzz for the
movement as a whole.

Governments around the world remain circumspect. Even China, which has
moved quickly on some GM crops like cotton, recently stepped back from
commercializing GM rice in November, citing safety concerns.

Responding to pressures from the Japanese and others, Monsanto pulled
back from bringing GM wheat to market in 2004. The Europeans, meanwhile,
point out that 131 countries back their cautious approach, for that is
the number of signatories to the Cartagena Protocol on Biosafety. This
international treaty, attached to the Convention on Biological
Diversity, underscores the right of each country to make a sovereign
decision on how to handle the cross-border trade in GM products and
technology.

Even here in the United States, where the largest amount of GM food is
grown, biotech is showing a certain failure to thrive. The Center for
Science in the Public Interest (CSPI) released a report last year
pointing out that the industry is not pushing new products through the
U.S. regulatory system. Meanwhile, the biotech industry still opposes
relatively simple reforms that would boost consumer confidence here in
the United States.

"We do not have a mandatory pre-market approval process for GM crops at
the Food and Drug Administration," CSPI's Gregory Jaffe points out. "We
only have a voluntary consultation process. We're the only country in
the world with such a process."

If governments are wary, the public is even more so. Contrast the WTO
process with a very different trial that took place in Mali last month.
Facilitated by the International Institute for Environment and
Development, 43 Malian farmers grilled 14 international experts and then
debated among themselves the merits of biotech. After five days of
deliberations, they decided that GM was not for them. Citizen juries
held elsewhere in the world -- in Brazil and in Karnataka and Andra
Pradesh in India -- have produced similar verdicts.

A case can certainly be made for GMOs. GM crops are popularly used in
South America along with no-till agriculture, a technique that both
prevents soil erosion and reduces the amount of fuel used in farming. By
cutting down energy inputs in farming, according to one recent report,
GM crops may have contributed to a reduction in greenhouse gas
production equivalent to removing nearly 5 million cars from the road
annually. Scientists are developing GM crops that can desalinate fields
and even turn color in the presence of landmines. New techniques, such
as RNA interference technology, rely on the cell's own underutilized
capacities rather than introducing foreign genes.

The global jury is still out on whether GMOs are a boon or a bust. The
farmers of Mali and the legal experts of the WTO have both spoken.
Ultimately, consumers might have the final word. Inspired by the
Europeans, labeling laws are spreading around the world. No matter how
hard the United States lobbies or the WTO deliberates, if a GMO label
translates into a skull and crossbones in the public mind, then
supermarkets won't be able to give the stuff away.

John Feffer is working on a book about the global politics of food.


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