TCS Daily


Labels and Trade Wars

By Roger Bate - December 12, 2002 12:00 AM

This week the Environment Committee of the European Parliament met to discuss the traceability of genetically modified (GM) food and its labeling. With some luck Parliament will base its decisions on sound science.

But it got no help or guidance last week when the European Union's Agriculture Council botched an opportunity to resolve the genetically modified food labeling dilemma. It chose to make labeling mandatory, shamefully exempting those products of large European multinationals.

EU Health and Consumer Protection Commissioner David Byrne welcomed the decision but simultaneously deplored 'scaremongering', stressing that all GMOs authorised in the EU have been evaluated for safety. While allegedly catering to consumer concerns, the new rules in effect accommodate powerful lobbies, while maintaining the doubt on the safety of GM products.

So far European policy on GM food has been unscientific, misleading and even internally inconsistent. It has created costly uncertainty for European food producers and consumers, delayed the uptake of the life-saving aspects of the technology in developing countries and it has increased trade tensions with its most powerful trading partner the United States. The latest EU decision could well aggravate those tensions to the point of triggering an outright trade war.

Science Says

For example, there is no traceable GM component in soybean oil, but if it was derived from a previously modified soybean, it will have to be labeled according to the new regulation. This is absurd. The EU currently imports 26 million tons of soybeans from the Americas. This represents 70 per cent of the total vegetable protein used in animal feed in the EU. Of this at least 8 million tons comes from the US. A single boat will bring 50,000 tons, and each ton contains more than seven million beans from thousands of farms collected and commingled at every point of a ten stage handling system. Each of these farms will have planted a variety of non-GM and GM beans. Proposing to trace individual supplies through such a system is impossible.

Moreover, the labeling requirement could lead to widespread fraud since there is no way to establish the province of a product's lineage cheaply. If a seller rightfully claims that his product contains no GM ingredients, it is costly to prove him wrong.

However, catalysts used in the production of a wide range of food products currently sold and consumed in the EU, such as beer and nearly all processed cheese, are currently exempt in the proposals. In other words, making cheese with a GM enzyme like chymosin or aspartic requires no label even if GM components are traceable in the food.

This omission is scientifically illogical since this cheese would be 'contaminated' with GM technology. But there's a good political explanation. Powerful French and German producers do not currently make food derived from GM produce (unlike American producers) but they do use GM enzymes to make numerous foods. Since European companies don't want the curse of a GM label on their produce, the latter type of GM technology is omitted from the new labeling rules. The EC, so fond of disclosure on biotech labeling, has not found it fit to let European consumers know that German beer and French cheese are likely to be produced with GM technology. But they are quite happy to single out GM crop products such as soybeans and corn, which are, of course, American.

Mandatory labeling of food should only be if there is a health concern enforced (such as warnings on cigarette packs). And the US Food and Drug Administration, as well as all major international food and health bodies, have declared the products safe. No European body has found any compelling scientific reason to delay its uptake. But precaution and fear predominate in Europe after many food scares like BSE and Foot and Mouth disease.

Who Wants War?

The new regulations mean labeling nearly everything in the US destined for export to Europe. GM commodity soybeans and GM commodity corn are not separated from conventional produce at source in America, which makes it impossible to say that corn or soybeans are GM free. Furthermore, these products and numerous others that use GM technology are found in most processed foods. Food manufacturers using American inputs (that is most large manufacturers) would have to produce one set of labels for America and another for Europe, at significant cost.

This position is strenuously opposed by US producers and the US Trade Representative to the World Trade Organisation. The tensions surrounding the issue are already high. Last month, Byrne admitted at a press briefing in Washington that if the US complains to the WTO 'the legal defences that would be available to the EU would be very narrow'. Byrne acknowledges the EU could lose.

EU consumers and taxpayers are already being gouged by high taxes and expensive staple foods, and worse is yet to come. Mandatory GM food labeling is illogical and encourages protectionism. If the EU seriously wishes to reassure consumers and encourage choice it should define clearly what it considers GM food. And it could start by reversing the illogical proposal to label foods according to the process especially since it hasn't even had the courage of its convictions to include GM enzymes and vitamins. If the EU can develop a sensible definition, producers of non-GM foods would then be able to label their produce correctly and provide a verifiable traceability system for the EU to monitor and regulate. Otherwise the new EU policy may well pave the way for another trade war.

Dr Roger Bate is Director of the International Policy Network, a public policy organization in London and Washington, DC.
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