Biotechnology: The Next Transatlantic Trade War?

In 1992, the U.S. Food and Drug Administration (FDA) approved the first genetically engineered food to be approved for sale and marketing in the United States. In the eight years since a new tomato, Calgene's Flavr Savr, gained this distinction, scientists have created--and companies have marketed--a wide range of genetically modified (GM) crops that have now become commonplace in farms and supermarkets across the country. By the end of 1999, about 57 percent of soybeans, 50 percent of cotton, and 40 percent of corn grown in the United States was from GM seeds. In just two years (between 1996 and 1998), crop area sowed with GM seeds increased fifteen-fold, to almost 28 million hectares. Lowell Hill and Sophia Battle, researchers at the University of Illinois, call this possibly "the most rapid adoption of new technology in the history of agriculture." It is estimated that, by late 1999, approximately 60 percent of processed foods available in U.S. food stores were derived from genetically modified organisms (GMOs).

GMOs have become big business in the United States, where both government and industry have embraced the new technology of genetic engineering. The United States surged ahead and remains the world leader in the development of GM foods. By contrast, the EU has taken a far more cautious approach to GMOs, dragging out the approval processes for new GM foods and insisting that such products be labeled as such for consumers. The EU's more cautious approach to GM foods has led many companies, such as Bayer AG and BASF AG, to move their biotechnology research facilities to the more biotech-friendly United States. More ominously, the EU's slow approval of new GM crops, coupled with its insistence on the labeling of such crops in the marketplace, have created serious obstacles to the export of agricultural products from the United States and thus raised the prospect of a major transatlantic trade war.

The stark differences in the treatment of GM foods are not accidental, but reflect long-standing and broader differences in regulatory cultures and food safety laws on either side of the Atlantic, which have already led to one major trade dispute between the United States and the EU over the export of U.S. hormone-treated beef to Europe. A transatlantic dispute over the regulation of GMOs matters, moreover, not only because of the strong emotions it arouses on both sides of the debate, but also because of the economic stakes for those American farmers who have switched much of their production to GM crops in recent years. Yet, despite the entrenched conflict and the high economic stakes in the GMO conflict, the issue of GMOs is unlikely to develop into a full-scale transatlantic trade war.

GMOs: Progress or Peril?

Genetic engineering, the process used to create GM seeds and foods and foods produced from them, is a technology used to isolate genes from one organism, manipulate them in the laboratory, and inject them into another organism. Supporters of the use of GMOs in food production consider them to be merely the latest step in ongoing scientific progress, from the farmer's "old-fashioned" selection of seeds and Mendelian crossbreeding to the mapping of plant and animal genetic code.

Supporters argue that the characteristics of these new plant varieties offer significant benefits to producers and consumers. They can benefit human health by adding vitamins and nutrients, potentially resulting in vitamin A-enhanced rice, "heart friendlier" oil, iron-enriched wheat, and other "health" foods. They can cut costs for farmers, whose savings can be passed on to consumers. They can increase yields, potentially spurring a new "green revolution" and benefiting food-scarce nations whose population growth outpaces their food supply. They can enhance environmental protection by reducing the use of pesticides, herbicides, and other chemical sprays. Nonetheless, GMO advocates concede that the benefits have so far been captured largely by...