Dispute Over Labeling of Genetically Modified Foods Threatens Billions in Trade

Contradictory approaches to the regulation of genetically modified (GM) foods could ignite a major trade war with the European Union and cost U.S. farmers and food manufacturers billions of dollars in lost exports, according to a new report from the Pew Initiative on Food and Biotechnology. A proposal adopted today by the European Parliament's Environment Committee to require the labeling and tracing of all GM ingredients in food has deep cultural roots but could, if adopted, also have serious economic ramifications for American farmers who have adopted GM technology, the report finds.

This new issue brief summarizes the regulations under consideration by the European Commission, what effects they could have on agricultural trade between the U.S. and the EU, and looks at the background issues dividing the U.S. and EU on this topic. It also notes that the European Union labeling and traceability requirements are expected to continue to be hotly debated there this summer.

The U.S. accounts for the lion's share of GM crops grown worldwide, with three quarters of all GM crops in the world now being planted on American soil. American exports of corn, cotton and soybeans -- large percentages of which are genetically modified -- constitute a significant share of the $6.3 billion annual value of U.S. agricultural exports to the EU. Those exports could be severely impacted by a European proposal that advanced today to require strict labeling and traceability of all food and animal feed containing more than 0.5 percent GM ingredients. European officials insist that the new regulations are needed to "restore consumer confidence" in the technology. While legislation was introduced in Congress last month to require labeling of all products which contain GM ingredients, current U.S. laws do not require GM crops to be labeled or traced because U.S. regulators do not believe that GM crops pose any unique risks over their conventional counterparts.

"In Europe, unlike in the U.S., a recent string of food crises such as mad cow disease outbreaks have created consumer apprehension about food safety in general," said Michael Rodemeyer, executive director of the Initiative. "As a result, in part due to the novel nature of GM foods and cultural factors relating to food, European consumers are particularly wary of biotech crops. Strong European resistance to these crops has already wiped out a $200 million market for U.S. corn. Although the U.S. and European governments share the same goal--the safe and environmentally responsible use of GM foods--their approaches to regulating these products could not be more different, in part reflecting different histories, political philosophies and cultures. The question is whether the chasm across the Atlantic can be bridged before a serious trade clash erupts, which could not only cause major economic disruptions to American farmers but could also have a ripple effect around the world as other countries debate whether to follow the American or European regulatory model."

The issue brief is available online. Go to U.S. vs. EU: An Examination of the Trade Issues Surrounding Genetically Modified Food.