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U.S. Threatens Action Against E.U. Over Genetically Engineered Food

By Alan Sipress and Marc Kaufman

Senior Bush administration officials are pressuring the European Union to abandon new restrictions on genetically modified foods that they say could cost U.S. companies $4 billion a year and disrupt efforts to launch a new round of global trade talks.

U.S. officials have repeatedly told their European counterparts that the regulations, which received preliminary approval last month, discriminate against U.S. products in violation of World Trade Organization requirements, raising the prospect of a major and emotionally charged trade dispute.

The European Commission’s decision to require the labeling of genetically engineered products reflects a European anxiety about food safety that is far more profound than in the United States, the world leader in agricultural biotechnology. This is a divide that threatens to further aggravate U.S. relations with Europe, already roiled by differences over global warming, arms control and other trade issues.

Undersecretary of State Alan Larson, the State Department’s senior diplomat assigned to economic issues, called the new restrictions “trade disruptive and discriminatory.” He said, “It’s obviously a very serious problem that affects a very important trade and one that’s of vital interest to a very important constituency in the United States, which supports free trade.”

Though U.S. officials have declined to detail what type of punitive action the Bush administration might take, U.S. officials say the regulations are inconsistent with the terms of the WTO because they treat U.S. products less favorably than European ones.

For instance, Larson said the European regulations would require that American crushed soybean oil bear a label, while European cheeses and wine made with biotech enzymes would not be covered. “There are potential WTO concerns about how it is structured now,” Larson said.

U.S. officials have left open the possibility of bringing a legal case before the WTO, which, after lengthy litigation, could eventually impose a politically embarrassing judgment and stiff economic penalties on Europe.

The dispute could also harden public opinion about biotechnology and its ability to transfer beneficial genes from one species into another.

The European Commission’s new standards, among the most far-reaching in the world, call for all products made from engineered material to bear a label saying they contain “genetically modified organisms.” They also require producers to document the source of all their ingredients.