EU Could Alter Biotech Trade

OMAHA (DTN) -- U.S. farm groups are asking the U.S. Trade Representative's Office to stress to the European Union that it's a bad idea to break up the EU common market and let individual EU countries decide whether to allow importation of biotech commodities.

After years of gridlock within the European Union over biotechnology, the EU Commission is expected to propose as early as Wednesday to allow each of the 28 EU member countries to make their own policies for the import and use of biotech commodities. The plan comes after the EU Parliament agreed earlier this year to allow individual countries to make their own policies for growing biotech crops.

U.S. ag groups are watching closely to see whether the commission will actually go ahead with the proposal, which has garnered criticism from both EU farm groups and environmental groups.

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 late last week with Darci Vetter, USTR's chief agricultural negotiator, to discuss how to discourage EU leaders from moving ahead with the plan.

Jim Sutter, chief executive officer for the U.S. Soybean Export Council, said the soy industry had a conference call Monday 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, he said.

"It really is an issue that will have much more impact on Europe than it does the U.S., a detrimental impact, but it's not the kind of thing we want to see happening," Sutter said. "We're trying to get to a point in the world where we have free trade and efficient trade, and this sort of goes in the opposite direction of that."

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

"All of a sudden you are going to have a patchwork of member states opt out of importation and use, as well as cultivation," said John Gordley, who lobbies for the American Soybean Association. "Then, how do they think they are going to get product moved around those 28 countries, all of whom have feed needs?"

The EU Commission is testing the waters for individual import policies after going nearly 18 months since its last import authorizations for new biotech crops. Europe has 22 different pending biotech traits for cotton, corn, soybeans, rapeseed and rice for which the European Food Safety Authority has published opinions. 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.

The U.S. Grains Council issued a statement when reports first surfaced about the opt-out proposal. The Grains Council was among the first to suggest the plan threatens the EU common market. The group argued the EU has already had a de facto moratorium on biotech approvals. "The question is simply whether Europe wants to have a functioning, science-based system and will respect its own laws and treaty obligations, or will it allow political pressure to trump everything else," stated Ron Gray, a farmer from Illinois and chairman of the U.S. Grains Council.

Several European farm groups also issued an open letter last week to the EU Commission arguing that the EU ag and food sectors would see costs skyrocket as every country tries to implement feed-traceability policies.

Pekka Pensonsen, secretary general of the European farm group Copa-Cogeca, said the commission proposal 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 the 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

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