International -- European Business: TRADE
A BROUHAHA OVER BIOTECH CORN (int'l edition)
Europe could ban altered U.S. seeds--and spark a trade war
Dieter Vanstaen picks up an ordinary-looking ear of yellow corn. With his thumb, the Brussels-based marketing manager for Ciba-Geigy Ltd. flicks off a kernel. "We were surprised that this small thing has become such a big problem," he says. The "small thing" is a genetically altered corn seed developed in the U.S. by Ciba to resist molds that can devastate as much as 20% of Europe's maize crop. American farmers already are harvesting the product. But despite more than two years of wrangling, the European Union, citing environmental and health concerns, still has not approved Ciba's seed for sale to the Continent's farmers.
This is a potentially grave issue. If the EU bans the Ciba seeds from Europe's shores, it may also block all American corn. Even though less than 1% of U.S. corn is genetically altered, the EU could justify a total embargo with the argument that it is impossible to distinguish genetically altered corn from natural strains. Thus U.S. farmers could lose an export market worth up to $400 million annually. All other U.S. agricultural commodities could be affected if the dispute widens, and European companies stand to lose as well. "The R&D of all types of companies working with genetics in Europe is jeopardized," argues Ciba-Geigy's Vanstaen.
Ciba's quest to sell its seed in Europe started in 1994. In order to market genetically altered food inside the EU, companies must first win regulatory backing from one country in the union. Ciba chose France, which raised no objections. But then 13 European environmental ministers meeting this past June expressed doubts. The big fear was that the corn could have untold consequences on any cattle that ate it.
Brussels bureaucrats, reluctant to clash with so many opponents and rattled by the recent mad cow scare, recommended further study. Until the report appears in November, Ciba's corn remains in limbo, neither approved nor disapproved. Meanwhile, nine more genetically altered seed products, including alfalfa, sunflower, and canola, are awaiting clearance. "A lot of other companies are too frightened even to begin the approval process," says one U.S. diplomat.
GREENPEACE THREATS. EU officials admit they need to streamline the approval procedure, but they feel hamstrung by environmentalists. Greenpeace and other groups are now planning a boycott of American soybeans, which include genetically enhanced varieties. "We don't want any genetically altered foods," says Thomas Schweiger of the Austrian Global 2000 group. "It's bad for the environment and dangerous for health." In contrast, biotech's advocates point out that genetically altered seeds can cut down on crop wastage. And they insist there's no evidence these products are harmful.
Don't bother preaching such benefits to Europe's environmentalists, who also may try to block boats carrying American corn. "We will consider all possible actions," warns Greenpeace International Biotech Director Isabelle Meister. Ciba's little seed is sprouting a full-scale confrontation.By William Echikson in Brussels