EU Advances Biotech Opt-Out

WASHINGTON (DTN) -- U.S. officials expressed dismay on Wednesday after learning the European Commission was moving ahead with a plan that would allow each of the 28 EU member countries to make their own policies for the import and use of biotech commodities.

As DTN reported last week, the policy would allow countries to ban the import and use of biotech grain and oilseeds even though the EU determines the grains and oilseeds pass EU safety standards.

The European Commission officially rolled out the policy Wednesday in Brussels, calling the proposal, "a more flexible approach towards the use of GMOs." However, the proposal effectively would break up the common-market rules in Europe for biotech approvals.

United States Trade Representative Michael Froman said the Obama administration was disappointed with the decision, which Froman said would allow EU countries to ignore science-based safety and environmental determinations made by the European Union and "opt out" of imports of GE food and feed.

"We are very disappointed by today's announcement of a regulatory proposal that appears hard to reconcile with the EU's international obligations," Froman said in a statement. "Moreover, dividing the EU into 28 separate markets for the circulation of certain products seems at odds with the EU's goal of deepening the internal market. At a time when the U.S. and the EU are working to create further opportunities for growth and jobs through the Transatlantic Trade and Investment Partnership, proposing this kind of trade-restrictive action is not constructive."

House Committee on Agriculture Chairman K. Michael Conaway, R-Texas, also strongly criticized the EU proposal, arguing it "ignores the scientific consensus regarding the safety of these products and flies in the face of existing trade agreements." Conaway added, "At a time when Europe and the United States are engaged in negotiations to expand market opportunities for producers on both continents, this decision raises serious questions regarding Europe's commitment to these negotiations."

A change in growing policies may help biotech crops gain a toehold in Europe, but a wholesale change freeing up EU countries to make their own import laws breaks up the idea of a common market and creates uncertainty for exporters to Europe. The import proposal also comes as the U.S. and EU already appear stalled over agricultural issues in the Transatlantic Trade and Investment Partnership talks.

Representatives from several U.S. farm groups met earlier this month with Darci Vetter, USTR's chief agricultural negotiator, to discuss how to discourage EU leaders from moving ahead with the plan.

The soy industry had a conference call last week to further discuss the issues and possible next steps if the commission advances the proposal. Individual country bans would have more complications within Europe than outside it.

"Today's decision from the European Commission is bad for the EU's own livestock producers and feed industries, will make those industries less competitive, and is bad for EU consumers who ultimately will pay more for the meat they put on their tables," said Richard Wilkins, a Delaware farmer and vice president of the American Soybean Association. "The EU feed and livestock industries have reacted very negatively to the EU Commission's action, warning that it would make livestock production uncompetitive and disrupt trade into and within the EU market. Currently, the EU feed industry imports 75% of the soymeal it requires for livestock uses."

Individual bans could become a difficult logistical scenario when trying to move soymeal or corn around countries that would implement bans on importation. Meanwhile, Europe wants to figure out how to boost grain and soybean imports to help livestock producers.

The EU Commission is testing the waters for individual import policies after going nearly 18 months since its last approval of a biotech trait. Europe has 22 different pending biotech traits for cotton, corn, soybeans, rapeseed and rice that have published opinions by the European Food Safety Authority. Those trait approvals for import for food and feed are now up in the air until the commission makes its decision on the opt-out plan.

Several European farm groups also issued an open letter earlier this month to the EU Commission arguing the EU ag and food sectors would see costs skyrocketing as every country tries to implement feed-traceability policies. The EU farm groups said the provision would "severely jeopardize the internal market for food and feed products" throughout Europe and lead to lower investment in the agri-food chain in "opt-out" countries.

Europe takes up about 11% of all U.S. soy exports, receiving 4.3 million metric tons of soybeans and 1.6 mmt of soy meal in 2014. Those figures include figures for 10 EU countries and Russia. Still, Germany and Spain are the fifth- and seventh-largest importers of U.S. soybeans, respectively. Turkey and Poland are the fifth- and sixth-largest importers of U.S. soy meal, according to figures from the U.S. Soybean Export Council's 2014 annual report.

Very little U.S. corn moves to European countries right now. Spain is the largest EU importer of corn, but the entire continent might import 100,000 tons in a given year.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(AG/CZ)

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