Washington Insider -- Friday

By DTN's Washington Insider

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

Russia May File WTO Challenge to Economic Sanctions

Russia reportedly may file a challenge at the World Trade Organization against the economic and trade sanctions being imposed on Russia by the United States, Canada, Japan and the European Union. Russian Ministry of Economic Development official Maxim Medvedkov says the sanctions run counter to WTO rules.

He said the sanctions, which were imposed in response to the conflict in Ukraine, fail to meet WTO rules that specify a country can use sanctions when a policy of one country threatens another country's interests, but add that such a measure can be used only in times of war or a similarly serious aggravation of international relations. "Our relations have deteriorated but not like during a war," he said. "The exceptions to the [trade] rules in case of security are not applicable" to the current situation, Medvedkov added.

Russia has not indicated that is planning to challenge the sanctions in the near future and if it ever does, past history indicates that it would take the WTO years to fully adjudicate the matter. With any luck, the Ukraine crisis will be settled long before a Russian complaint against sanctions reached its final stages.

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California Narrowly Defeats Mandatory Warning Labels on Sugary Drinks

Legislation that would have required health warning labels on soda pop and other sugary drinks died a legislative death earlier this week in California as the state Assembly's Health Committee voted 7-8 against the measure. Had it passed, certain sodas, energy drinks and fruit drinks would have included a label reading, "STATE OF CALIFORNIA SAFETY WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay."

Representatives of the beverage industry argued that the bill was unfair because it did not apply to other foods and drinks, including lattes and chocolate milk. They also point out that bottlers already post calorie counts on the front of many beverage containers as part of a voluntary campaign that started in 2010.

More states can be expected to consider whether to require increasingly detailed labeling for high-sugar food products.

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Washington Insider: The EU Biotech Mess

It is difficult to tell what is happening with European Union farm policy, especially since it has begun to consider legislation to allow EU member states to impose individual controls rather than apply regulations across the entire bloc. The current issue concerns the cultivation of genetically modified crops.

In a decision that runs counter to the "sound science" commitment made by both the EU and the United States with the launch of the Transatlantic Trade and Investment Partnership negotiations, the new legislation would allow EU member states to individually ban the cultivation of biotech crops for "social or ethical" reasons even if the European Food Safety Authority has approved them.

The new policy and the reasons behind it are baffling, observers say. For example, the Greek environment minister trumpeted, "For the first time [countries have] a solid legal base to prohibit the cultivation of GMOs on their territory." Greece now holds the rotating EU presidency and therefore chaired the Council of Environment Ministers that took place in Luxembourg. "This is the first, very important step, in our continuous effort for the further improvement and effective regulation of the GMO authorization system in the EU," the minister said.

Final approval of the issue by the environment ministers (which still must pass the European Parliament before becoming law) was hailed by countries both for and against biotech crops.

"We welcome this agreement as it breaks a deadlock on this issue and give member states such as France the legal right to ban the cultivation of GM crops," said French Environment Minister Segolene Royal. She added that Frances believe the proposal would set a precedent for giving EU member states the right to impose unilateral bans on other products including pesticides and endocrine disruptors.

However, the Council of Environment Ministers vote also received the support of countries such as the United Kingdom, which said it believes the legislation would allow its farmers to grow biotech crops which are currently not approved because of ideological opposition.

There also was opposition to the decision, however, from opponents to GM crops including the European Green Party as well as various environment groups. They blasted the proposal because it does not ban all biotech crop cultivation. "The partial re-nationalization of competences on GM crop cultivation endorsed by environment ministers today is a totally flawed approach as it would enable the European Commission to force through swifter and easier EU-level GMO authorizations by allowing member states or regions to opt out," the European Green Party said in a statement.

The European biotechnology industry also criticized the legislation because it said it sets an unacceptable precedent for making decisions on "non-scientific" grounds and violates the EU single market rules.

"The EU legal framework for the cultivation of GM products, initially adopted in 2001 has never been correctly implemented," said EuropaBio, a trade association representing biotechnology companies in the EU told the press. The organization reiterated its call for products that fulfill the EU's science-based risk assessment requirements as set out in the EU legislation to be authorized without undue delay. "After more than 15 years of large scale GMO cultivation in many countries globally existing evidence has shown that GM crops are at least as safe as their conventional counterparts," EuropaBio said.

When the European Commission first proposed the legislation in 2010, the Council of Ministers legal service raised doubts about whether it would survive either a legal challenge in EU courts or a trade complaint in the World Trade Organization. In fact, the United States already has successfully challenged EU biotech crop regulatory rules at the WTO. U.S.-based corn growers say EU laws restricting biotech crop cultivation have cost them billions of dollars annually in lost exports. Currently only one biotech crop is cultivated in the EU, and it was approved in the late 1990s.

The European Parliament has approved a version of the same GMO production legislation. However that measure differs from the Council-backed proposal and as a result the two law-making EU institutions will have to work out a compromise before the legislation can become law.

Whatever the practical implications of the proposed law, this blatant move to substitute movement politics for science in food regulation is dangerous and represents a key policy retreat. The EU has been a reluctant — even cynical — participant in efforts to strengthen access to global markets for the past several decades. Clearly, its current shift toward removing any policy link to science emphasizes that trend and makes any movement toward an effective U.S.-EU free trade agreement increasingly unlikely, Washington Insider believes.

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