The different views on genetically modified food in the US and the EU can prevent a free trade agreement that would result in a much needed GDP increase.
The EU and the US are trying to settle a free trade agreement within two years. The main challenge is to agree on creating similar standards, so that a product accepted in the US is also accepted in the EU and the other way around.
Reaching a common understanding on the regulation of genetically modified organisms, GMO’s, is going to be a big challenge. The EU has some of the strictest GMO policies in the world, compared with the United States, which leads the world in the use of GMO.
“In order to complete this pact, both sides have to devote significant political focus and make choices in sensitive areas such as agriculture. Without addressing these vital issues, a deal will never happen” writes Senator Max Baucus, chairman of the Senate Finance Committee.
In the US, 86% of corn, 93% of soybeans and 87% of canola is genetically modified. The US wants to export more of its GMO products to the EU but has not been able to do this because of strict regulation and a cultural backlash against GMO products.
These differences have not intimidated EU commissioner of trade, Karel De Gucht.
“This is the cheapest stimulus package you can imagine!,” said Karel De Gucht in a speech on the topic given at Harvard university.
Not all EU farmers are skeptic towards GMO. Aspiring farmer Ulrik Aaskov would rather start his farming carrier in the USA where the rules are more liberal. See Video –V-
GMO is a cornerstone in the trade war
A free trade agreement between the world’s two biggest economic powers has been discussed before, but the GMO question has been one of the reasons why discussions haven’t ended successfully.
“Since the 90’s there has been a GMO trade war between the two actors and there have been cases in the World Trade Organisation where the EU lost,” says Jens Ladefoged Mortensen, who is a professor at Copenhagen University and author on several publications concerning the matter.
The U.S President’s 2013 Trade Policy Agenda states that the United States Trade Representative “is working to expand markets for the U.S agricultural producers by encouraging EU regulators to ensure that their decisions are science based.”
By science based, the US means that there should be scientific evidence proving that a product is harmful and should not be on the market. Without this proof, the banning of a product is seen as preventing free trade. The EU prefers a precautionary approach.
Six EU Member States have used a provisional safety law to temporarily ban the use of GMO: Austria, France, Greece, Hungary, Germany and Luxembourg.
A sensitive subject is a serious matter
With the economic situation and positive gestures from both Obama and EU president Manuel Barroso, it would seem like the negotiations would go quickly and easily, but this isn’t the case.
“Food is an immensely sensitive subject in the EU, it’s hard to explain how big a role this subject plays. And the Americans don’t understand this reality. It has stopped an agreement before and might do it again, ” says Jens Ladefoged Mortensen
This is reflected in the opinion of the European citizens. In a EU report from 2010 only 23 percent stated that they supported GMO.
In the European Parliament the GMO skeptics are already getting ready to fight any changes to the European GMO policies. French member of the european parliament Jose Bové from the Greens (EFA) is waiting for the commission’s proposal for a negotiation mandate. This is scheduled to be agreed before the political summer break and will define how far the EU will go to strike a deal.
“We need to see what’s on the table and for the moment this is totally hidden,” says Jose Bové, who isn’t optimistic, when it comes to the effects an agreement could have.
“The US is going to expect changes to the EU GMO policies. We would have to lower our standards. They will try to prevent European autonomy on food safety,” says Jose Bové
No changes to legislation
The European commissioner of trade, Karel De Gucht, has made it clear that the EU is not looking to change legislation concerning GMO.
“It’s not possible to settle an agreement if the americans actually think that legislation changes would happen,” says Jens Ladefoged Mortensen who sees other possibilities in reaching a compromise.
“In order to settle an agreement, EU could make a credible statement saying that they will look at speeding up the approval of GMO products.The compromise should be that the EU keeps their legislation and procedure, but administratively speed up the process of accepting more GM products.”
The slow process of approving GMO products in the EU has been the main issues upsetting the US concerning the EU GMO policies. The US has criticised the EU for deliberately delaying the process, turning the scientific analysis into an ideological subject and not a scientific one.
The World Trade Organisation has also ruled on this, criticising the EU for not having an efficient system and therefore creating a trade barrier.
Out of need, not love
The free trade agreement could act as a long term investment for both parties, but compromises in regards to GMO will have to be made.
An EU report predicts that the relative size of the EU in the world economy will be halved in 2050 (15% against the current 29%).
The free trade agreement has the possibility of creating hundreds of thousands of jobs, increasing GDP in the EU with 0,5-1%, and increasing global competitiveness for both parties. Both the US and EU are facing high unemployment, with the US averaging at 7.9% unemployment and the EU with 10.8%.
“The initiative doesn’t come from love but out of need” says Jens Ladefoged Mortensen. “The EU and the US have to look at creating a free trade agreement now because their prospects of growth are bad. With China and the BRIC countries storming forward, it’s a new era and a new reality”.