Washington Insider--Tuesday

Gaibler on WTO vs. EU on GMOs

Here's a quick monitor of Washington farm and trade policy issues from DTN's well-placed observer.

Homeland Security Funding Remains Unresolved

Congress returned last evening from its Presidents Day recess facing a high priority item in the form of funding for the Department of Homeland Security. The department currently is operating under a stopgap spending measure that expires Friday, so lawmakers must act before then to pass legislation to provide appropriations for DHS through Sept. 20, the end of fiscal 2015.

Congressional Republican leaders -- House Speaker John Boehner of Ohio and Senate Majority Leader Mitch McConnell of Kentucky -- have not revealed exactly how they expect to proceed. The House has produced a bill that would fund DHS, but also would undo President Obama's executive order regarding immigration issues. The president has threated a veto if the immigration language remains in the bill, and Senate Democrats almost assuredly will filibuster the legislation unless the immigration provision is dropped.

Under normal circumstances, it would be highly unlikely Republicans would allow funding to run out for Homeland Security, especially with the current heightened threats to the United States. The question that remains to be answered is which issue -- funding homeland security or rescinding the president's unilateral actions on immigration -- is more important to congressional leaders.

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Vilsack to Defend President's Budget Request, Farm Bill Implementation This Week

Agriculture Secretary Tom Vilsack will be on the congressional hot seat this week during testimony before both the Senate Agriculture Committee and House Agriculture Appropriations Subcommittee.

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Agriculture Committee Chairman Sen. Pat Roberts, R-Kan., has scheduled a hearing this morning on implementation of the 2014 farm bill a year after its enactment. While lawmakers have praised USDA's swiftness in rolling out new programs, concerns remain about crop insurance, commodity prices, federal nutrition programs and regulations affecting farmers. Vilsack should come prepared to respond to these concerns, as they will also be front and center at Wednesday morning's hearing before the House Appropriations subcommittee on the president's proposed $156 billion USDA budget for fiscal 2016.

It is expected that Appropriations panel members will stick with tradition and raise more policy-related questions for Vilsack that budgetary issues.

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Washington Insider: Gaibler on WTO vs. EU on GMOs

There has been widespread press coverage of European Union efforts to avoid dealing with its fractured process for approving genetically modified crops, but few suggestions about what should be done about it. Recently, however, Floyd Gaibler, director of trade policy and biotechnology for the U.S. Grains Council, told the press that he and others have talked with the Office of the U.S. Trade Representative about re-opening a 2006 World Trade Organization case involving biotechnology.

At that time, the WTO ruled the EU had violated international rules by maintaining a de facto moratorium on the approval of GM crops and foods made from them.

Gaibler brought up the issue at a stakeholder conference in early February during the eighth round of Transatlantic Trade and Investment Partnership talks between the EU and the United States. "The EU now has another de facto moratorium in place similar to what they had in the early 2000s," he said. "The U.S. won that case and it is still open. The EU has not approved a GM crop since November of 2013. They have 12 applications pending that have been given scientific approval."

"Now the new European Commission is reviewing the whole approval process," Gaibler said. "We are talking with USTR officials and re-opening the WTO case is an option."

U.S. corn and soybean exporters are frustrated with the approval process, a feeling also shared by the European biotechnology, food processing and livestock sectors, which urged the European Commission in 2014 to approve six pending applications they consider economically crucial to their industries.

The same EU groups renewed their efforts in an early February letter sent to the new European Commission in advance of a special meeting of the EU executive body to be held recently during which the stalemated GM approval process will be discussed.

"The EU relies on imports from third countries to cover 75% of its use of protein-rich ingredients for animal feeding purposes," the groups wrote. "The EU food, feed and livestock sectors will face a substantial shortage of raw materials supply, which will also trigger cost increases both for basic food products and major feed ingredients if the decisions for authorization are delayed any further."

Officials from the EU food and feed industry, speaking to the U.S. press on condition of anonymity, said they would support the United States re-opening the WTO case against the EU if the current gridlock does not change.

However, an official from the EU biotechnology industry said even if the EU approval gridlock were to end in the near future, it would not trigger new imports because of what is known in the biotechnology industry as "stacked events," where new genetic traits have been added to a previously authorized GM crop.

"Unlike in the U.S., the EU regulatory approval process requires any GM crop with a stacked event to undergo a whole new evaluation," Beat Spath, director of agricultural biotechnology with EuropaBio, which represents the EU biotechnology industry, told the press.

Meanwhile, both U.S. grain exporters and EU food processing, animal feed and livestock officials note that the EU is moving to give each of the 28 EU member states the right to ban GM crops for food and feed in the same way the EU recently approved legislation giving member states the right to ban the cultivation of GM crops for reasons other than sound science. These efforts will lead to disaster, Gaibler predicted.

A high-level European Commission official confirmed such plans are being considered now, and there are various options on the table. "This is one of them. The new EU laws on GM cultivation will take effect in April. It is being considered to make a similar proposal for the GM food and feed applications."

The EU attitudes regarding technology are complex and difficult to understand, especially the shift away from a basic WTO commitment to adhere to science-based rules. Whether the United States will attempt to confront such an issue while negotiations for a U.S.-EU free trade area are underway is unknown. But it is increasingly clear that the EU has little intention of good faith negotiations that involve any significant compromises on its part. And it is increasingly doubtful that the United States has any significant interest in talks that have such little real prospect of benefits, Washington Insider believes.


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(GH/CZ)

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