Required Report - public distribution

**Date:** 5/13/2005

**GAIN Report Number:** E35091

E35091

**EU-25**

**Biotechnology**

**Annual Agricultural Biotechnology Report**

**2005**

**Approved by:**

![](media/image1.wmf)Norval Francis

U.S. Mission to the EU

**Prepared by:**

Stan Cohen

**Report Highlights:**

Since 1998, the EU has approved three biotech events in the face of
considerable member state (MS) resistance. About 30 events are in the
pipeline still waiting approval. Currently, marketing bans on
EU-approved biotech events are in effect in 6 MSs. On April 18, 2005 the
Commission introduced emergency inspection measures to identify the
presence of Bt10 corn in U.S. exports of corn gluten feed and brewers
grains to the EU. The debate on agricultural biotechnology in the EU is
highly politicized. Many of the contentious issues now confronting the
EU are not related to human health and environmental safety. Over the
last 6 years the EU has implemented a comprehensive regulatory system to
guarantee that biotech products are fully evaluated to ensure their
safety. The EU and MSs remain deadlocked on the search for seed labeling
legislation to cover the adventitious presence of biotech seed and
coexistence measures for biotech, conventional, and organic agriculture.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Brussels USEU \[BE2\]

\[E3\]

**Table of Contents**

Executive Summary 2

Trade and Production 2

Policy 4

Regulatory Framework 5

Political Factors 5

Product Authorizations 5

Marketing Bans 6

Coexistence 6

Labeling 7

An Example of How to Label 7

Labeling of GMMs and Processing Aides 8

Seed Labeling Legislation 8

Traceability 9

Cartagena Biosafety Protocol 9

Trade Barriers 9

Marketing Issues 10

Bt10 Corn 11

Capacity Building and Outreach 11

# Executive Summary

# 

Since 1998, the EU has approved three biotech events. About 30 events
are in the pipeline waiting approval. Currently, marketing bans on
EU-approved biotech events are in effect in 6 member states. The
Commission with the scientific backing of the European Food Safety
Authority (EFSA) will ask the June Environmental Council to lift the
bans.

On April 18, 2004, the Commission introduced emergency inspection
measures to identify the presence of Bt10 corn in U.S. exports of corn
gluten feed and brewers grains to the EU. The system will remain in
place for 6 months at which time a review will be conducted to determine
whether it is still necessary.

# 

The debate concerning biotechnology in the EU is highly politicized.
Many of the contentious biotech issues now confronting the EU are not
related to human health and environmental safety. Over the last 6 years
the EU has implemented a comprehensive regulatory system to ensure that
biotech products are fully evaluated to ensure their safety.

The EU and the member states are now deadlocked over a number of issues
that are based on economic considerations, and not safety: 1) the
on-going search for seed labeling legislation for biotech events
approved by EFSA and 2) the development of coexistence measures for
biotech, conventional and organic agriculture that equally protect the
interests of all farmers; and 3) the lifting of the marketing bans in 6
member states.

# 

# Biotechnology Trade and Production

Status of Product Approvals

Syngenta's Bt11 sweet corn for human consumption was authorized for
marketing in May 2004. Monsanto's NK603 herbicide tolerant corn was
authorized in November 2004 for import for both food and feed uses.
These are the only biotech products that the EU has authorized for
marketing since 1998.

Currently, there are about 30 biotech events in the pipeline for
approval. Those furthest along in the process are presented in the
following table.

+---------------+--------+-----------------------+---------+---------+
| Event         | C      | Use                   | Risk    | Status  |
|               | ompany |                       | Ass     |         |
|               |        |                       | essment |         |
+---------------+--------+-----------------------+---------+---------+
| Herbicide     | Mo     | I                     | P       | At      |
| Tolerant      | nsanto | mport/Processing/feed | ositive | Com     |
|               |        |                       |         | mission |
| Rapeseed GT73 |        |                       |         | for     |
|               |        |                       |         | Final   |
|               |        |                       |         | Consent |
+---------------+--------+-----------------------+---------+---------+
| Insect        | Mo     | I                     | P       | At      |
| Resistant     | nsanto | mport/Processing/feed | ositive | Council |
|               |        | and food              |         | for     |
| Corn MON863   |        |                       |         | feed.   |
|               |        |                       |         | Com     |
|               |        |                       |         | mission |
|               |        |                       |         | to      |
|               |        |                       |         | refer   |
|               |        |                       |         | to      |
|               |        |                       |         | Council |
|               |        |                       |         | for     |
|               |        |                       |         | food.   |
+---------------+--------+-----------------------+---------+---------+
| Herbicide     | Mo     | Food                  | P       | Com     |
| Tolerant Corn | nsanto |                       | ositive | mission |
| GA21          |        |                       |         | to      |
|               |        |                       |         | Refer   |
|               |        |                       |         | to      |
|               |        |                       |         | Council |
+---------------+--------+-----------------------+---------+---------+
| Insect        | Mo     | I                     | Pending | EFSA    |
| Resistant     | nsanto | mport/Processing/feed |         | o       |
| Corn          |        | and food              |         | pinions |
| MON863XMON810 |        |                       |         | (2)     |
|               |        |                       |         | pending |
+---------------+--------+-----------------------+---------+---------+
| Insect        | Mo     | I                     | Pending | Rap     |
| Resistant &   | nsanto | mport/Processing/feed |         | porteur |
| Herbicide     |        | and food              |         | Review  |
| Tolerant      |        |                       |         | (Spain) |
| Yiel          |        |                       |         | and     |
| dGard/Roundup |        |                       |         | EFSA    |
| Ready Corn    |        |                       |         | opinion |
|               |        |                       |         | pending |
+---------------+--------+-----------------------+---------+---------+
| Insect        | Pi     | Import/               | P       | Reg.    |
| Resistant     | oneer/ | Processing/Food/Feed/ | ositive | Cmt.    |
| Corn1507      | M      |                       |         | De      |
|               | ycogen | Cultivation           |         | cision, |
|               |        |                       |         | Sept    |
|               |        |                       |         | for     |
|               |        |                       |         | culti   |
|               |        |                       |         | vation, |
|               |        |                       |         | Com     |
|               |        |                       |         | mission |
|               |        |                       |         | to      |
|               |        |                       |         | refer   |
|               |        |                       |         | to      |
|               |        |                       |         | Council |
|               |        |                       |         | for     |
|               |        |                       |         | food.   |
+---------------+--------+-----------------------+---------+---------+
| Insect        | Sy     | Cultivation           | P       | N/A     |
| Resistant     | ngenta |                       | ositive |         |
| Bt11 Corn     |        |                       |         |         |
+---------------+--------+-----------------------+---------+---------+
| Herbicide     | Bayer  | I                     | SCP     | EFSA    |
| Tolerant      | Crop   | mport/Processing/Feed | 1998    | opinion |
| Hybrid        | S      |                       | p       | pending |
| Rapeseed      | cience |                       | ositive |         |
| (Ms8Rf3)      |        |                       | [1      |         |
|               |        |                       | ]{.unde |         |
|               |        |                       | rline}/ |         |
+---------------+--------+-----------------------+---------+---------+
| Herbicide     | Bayer  | Import/Processing     | To be   | Appl    |
| Tolerant      | Crop   |                       | sent to | ication |
| Rapeseed      | S      |                       | EFSA    | in UK   |
| (T45)         | cience |                       |         | since   |
|               |        |                       |         | March   |
|               |        |                       |         | 2004    |
+---------------+--------+-----------------------+---------+---------+
| Herbicide     | Bayer  | Import                | EFSA    | N/A     |
| Tolerant Rice | Crop   | /Processing/Food/Feed | o       |         |
| Liberty Link  | S      |                       | pinions |         |
| 62            | cience |                       |         |         |
|               |        |                       | pending |         |
+---------------+--------+-----------------------+---------+---------+
| Herbicide     | Bayer  | Import                | To be   | Appli   |
| Tolerant      | Crop   | /Processing/Feed/Food | sent to | cations |
| Cotton        | S      |                       | EFSA    | in      |
| Liberty Link  | cience |                       |         | Spain,  |
| 25            |        |                       |         | 3/2004  |
|               |        |                       |         | and NL, |
|               |        |                       |         | 3/2005  |
+---------------+--------+-----------------------+---------+---------+

[1]{.underline}/ Positive risk assessments issued under the old
Scientific Committee on Plants (SCP) under Directive 90/220.

No EU regulatory committee made up of the member states has voted in
favor of authorizing the marketing of a product despite consistently
positive risk assessments from EFSA.

For both BT 11 and NK 603, the Commission recommended that the member
states authorize the marketing of these products based on the positive
risk assessments issued. Despite this the member states failed to reach
a qualified majority for or against approval, and the Commission then
asked the Council of Ministers to come to a decision. After 3 months,
the Council also deferred and sent the matter back to the Commission.
The Commission then authorized the marketing of the two biotech events.

The Council of Minister's involvement in the approval process for
biotech events is a dramatic departure from normal legislative
procedures. Agriculture Ministers meet to approve major CAP reforms or
EU trade policy positions in the WTO Doha round. Typically, working
level officials drawn from the member states consulting in a regulatory
committee would make decisions on biotech events.

# Biotechnology Policy

Regulatory Framework

Technology providers can file an application for the authorization of
agricultural biotech products under two EU regulations. Under
[Regulation (EC) No
1829/2003](http://europa.eu.int/eur-lex/pri/en/oj/dat/2003/l_268/l_26820031018en00010023.pdf),
a company can file a single application for the biotech event and all
its uses (known as the "one door, one key principle"). The company
submits the application to the competent authorities of the member state
where the product will first be marketed. Within 14 days, the member
state must forward the application to the European Food Safety Authority
(EFSA) for review.

EFSA conducts a single risk assessment and a single authorization can be
granted for an event and all its uses (cultivation, importation,
processing into food/feed or industrial products). While EFSA attempts
to issue an opinion within 6 months, they may request additional
information from the applicant thus lengthening the time frame. If EFSA
issues a positive risk assessment, the application is forwarded to the
European Commission, who has responsibility for risk management.

The Commission will then present a proposal recommending that the member
states authorize the product. The Commission may impose certain
conditions (e.g., harvesting, transport, and monitoring) concerning the
product. The Commission has 3 months to draft the proposal. The member
states then review and vote on the proposal in a regulatory committee. A
qualified majority (QM) is required to approve or defeat the proposal.
If the proposal fails to obtain a QM, the proposal then goes to the
Council of Ministers for review. The Council has three months to make a
decision. If the Council fails to reach a decision, the Commission may
then authorize the marketing of the product.

A company can also file an application under [Directive
2001/18/EC](http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexapi!prod!CELEXnumdoc&lg=en&numdoc=32001L0018&model=guichett)
for the purpose of marketing a biotech event for cultivation,
importation and processing into different products. While the procedure
under this directive resembles that of Regulation (EC) No 1829/2003,
there are some differences. When the application is submitted in the
member state, that county's competent authorities perform an assessment.
Should they issue a negative assessment, the applicant's only option is
to submit the file in another member state. However, if the member state
does issue a favorable assessment, then the results are shared with the
Commission and all other member states may approve the event for
marketing within the EU or raise objections. Should objections be
raised, then the Commission will ask EFSA to conduct a study. From this
point on, the approval procedure resembles that of Regulation (EC) No
1829/2003.

The Commission's Directorate General for Health and Consumer
Protection\--known by the French acronym SANCO\--handles applications
that are submitted under Regulation (EC) No 1829/2003. Typically, the
Agriculture Council of Ministers reviews Commission proposals under this
legislative authority when the member states are deadlocked. The
Directorate General for the Environment handles applications submitted
under Directive 2001/18/EC with the Environment Council of Ministers
reviewing Commission proposals when the member states fail to reach a
QM.

Political Factors

The debate concerning biotechnology in the EU is highly politicized.
Many of the contentious biotech issues now confronting the EU are not
related to human health and environmental safety. Over the last 6 years
the EU has implemented a comprehensive regulatory system to ensure that
biotech products are fully evaluated to ensure their safety. The
European Food Safety Authority (EFSA) and the member state competent
authorities have the final say before a product is authorized for
release on the market.

Now the EU and the member states are deadlocked over a number of issues
that are based on economic considerations, and not safety: 1) the
on-going search for seed labeling legislation for biotech events
approved by EFSA and 2) the development of coexistence measures for
biotech, conventional and organic agriculture that equally protect the
interests of all farmers. Similarly, the EU Commission has stated that
the marketing bans in 6 member states are not based on legitimate safety
concerns.

Product Authorizations

Please refer to the link below for a list of biotech food products that
were approved under the Novel Food Regulation (EC) No 258/97:

<http://europa.eu.int/comm/food/food/biotechnology/authorisation/258-97-ec_authorised_en.pdf>

The Novel Food Regulation (EC) No 258/97 has since been superseded by
Regulation (EC) 1829/2003.

Please refer to the link below for a list of biotech feed products that
were approved under the Directive No 2001/18/EC:

<http://europa.eu.int/comm/food/food/biotechnology/authorisation/2001-18-ec_authorised_en.pdf>

On April 18 2005, the Commission published a list of 26 biotech products
that have been legally on the EU market since before the new legislative
framework was introduced in April 2004 for authorizing biotech food and
feed had entered into effect. These so-called "existing products" were
either approved under former EU legislation, or did not require approval
at the time that they were put on the market. They have been added to a
specific section of the Community register of biotech food and feed in
order to clarify exactly which products are permitted to be sold in the
EU.

Since the entry into force of Regulation 1829/2003 on biotech food and
feed in April 2004, all biotech products seeking to enter the EU market
as food or feed have to undergo a thorough authorization procedure,
including a scientific safety assessment by EFSA. However, there are
certain biotech food and feed products that can be legally sold in the
EU according to the rules in place before Regulation 1829/2003.

In order to cover these GM products, Regulation 1829/2003 stipulated
that operators who wished to continue marketing an "existing product"
had to notify the Commission and submit detailed information on the
biotech event before October 18, 2004. Non-notified products will no
longer be allowed on the EU market. The Commission, in co-operation with
the Joint Research Center, examined the validity of the notifications it
received and agreed to enter 26 biotech products into a specifically
created section of the Community register of genetically modified food
and feed. Once one of these "existing products" is on this register, it
can legally be sold in the EU for a set period of between 3-9 years,
after which it has to resubmit an application for the renewal of the
authorization.\
For the register of biotech "existing products", see:

<http://europa.eu.int/comm/food/food/biotechnology/authorisation/register_notification/index.htm>

Specific legislation governing these products can be found at the
following link:

<http://europa.eu.int/comm/food/food/biotechnology/gmfood/reg641_2004_en.pdf>

Member State Marketing Bans of Biotech Products

Marketing bans for a number of events remain in effect in effect in
Austria, Denmark, France, Luxembourg, Germany, and Greece. In November
2004, EU member states met in a regulatory committee to review the
Commission's proposal recommending the lifting of the bans. The
Commission based its recommendation on EFSA opinions asserting that
there was no scientific basis for the member state bans. Nevertheless,
the regulatory committee failed to reach a decision and the Commission
has referred the matter to the Council who has three months to make a
decision. (It is expected that the June Environment Council will
consider the proposal.) Since it is likely the Council will fail to
reach a decision, the Commission will then be able to lift the bans.

The events banned are presented in the following table. The Commission
had approved these products for marketing based on positive risk
assessments issued by EU scientific committees.

  ----------------------- ----------------------- -----------------------
  Country                 Event Banned            Date of Ban

  Austria                 Syngenta Bt176 Corn,    1997, 2000, 1999
                          Bayer T25 Corn,         
                          Monsanto MON810 corn    

  France                  Bayer Rapeseeds Topas   1998 for both
                          19/2 and MS1XRf1        

  Germany                 Syngenta Bt176 corn     2000

  Greece                  Bayer Rapeseed Topas    1998
                          19/2                    

  Luxembourg              Syngenta Bt176          1997
  ----------------------- ----------------------- -----------------------

Coexistence

Agriculture Commissioner Fischer-Boel has indicated that she is giving
consideration to modifying the current Commission policy that encourages
countries to develop their own guidelines for the coexistence of biotech
and conventional agriculture. She has recently suggested the possibility
of developing a EU "framework legislation" that would presumably impose
tighter controls on farmers, and yet still allow some flexibility to
account for differences among countries. This would mark a departure
from the non-binding guidelines
(<http://europa.eu.int/comm/agriculture/res/index_en.htm> ) published by
the Commission in July 2003. However before proposing any changes,
Commissioner Fischer-Boel will await the results of a EU review of the
experiences of the member states in developing coexistence laws due out
in late 2005.

Austria, Denmark, and Italy have taken the lead in pressing the
Commission to adopt a EU-wide regulation for the coexistence of biotech
crops and conventional and organic agriculture. Along with Germany, each
of these countries has drafted coexistence laws that are extremely
restrictive in terms of what farmers of biotech crops are required to
do. Faced with such challenges, farmers will likely not run the risk of
planting biotech crops. Moreover, certain aspects of these laws would
appear to violate the internal market rules of the EU which guarantees
"free circulation", and is reiterated in Article 22 of Directive
2001/18/EC which regulates the deliberate release into the environment
of genetically modified organisms. In the past, the Prodi Commission has
been critical of Germany's proposed coexistence law.

Labeling

Labeling regulations for products containing or consisting of GMOs are
presented in [Regulation (EC) No
1830/2003](http://europa.eu.int/eur-lex/pri/en/oj/dat/2003/l_268/l_26820031018en00240028.pdf),
article 4B. In general, these labeling regulations apply to bulk
agricultural commodities such as whole grains and oilseeds. The scope of
GMO products covered is defined in Directive 2001/18.

Labeling regulations for food and feed products that are produced from
GMOs are presented in [Regulation (EC) No
1829/2003](http://europa.eu.int/eur-lex/pri/en/oj/dat/2003/l_268/l_26820031018en00010023.pdf),
articles 12-13 for food and articles 24-25 for feed. These products have
undergone varying degrees of processing.

In general, all food and feed products containing/consisting of GMOs
and/or produced from GMOs, including products that no longer contain
detectable traces of GMOs must be labeled.  The allowable adventitious
presence level for EU-approved varieties of GMOs for use in food and
feed is set at 0.9 percent.  Above this level, all products must be
labeled.  For [GM varieties, which are not yet formally approved but
which have received a positive EU risk
assessment](http://europa.eu.int/comm/food/food/biotechnology/gmfood/events_en.pdf),
the adventitious presence level is set 0.5 percent.  This provision will
expire after 3 years. Above this threshold, the product is not allowed
on the EU market.  Operators must demonstrate that the presence of GM
material was adventitious or technically unavoidable.

The regulation does not require labeling of products that are not food
ingredients, such as processing aids.  Meat, milk or eggs obtained from
animals fed with GM feed or treated with GM medicinal products do not
require GM labeling.

## An Example of to How to Label for Food Produced from GMOs

Article 13 of Regulation 1829/2003 specifies the wording to be used on
the label as follows:

\(a\) Where the food consists of more than one ingredient, the following
wording must follow immediately after the ingredient concerned, in
brackets: \"genetically modified\" or \"produced from genetically
modified \[name of ingredient\].  A compound ingredient with a
constituent X which is produced from a GMO Y must be labeled \"contains
X produced from genetically modified Y.

Example:  a biscuit containing soy flour derived from GM-soy must be
labeled \"contains soy flour from genetically modified soy\".

\(b\) Where the ingredient is designated by the name of a category, the
following wording must be used in the list of ingredients: \"contains
genetically modified \[name of organism\]\" or \"contains \[name of
ingredient\] produced from genetically modified \[name of organism\]\".

Example:  for vegetable oils containing rape oil produced from
genetically modified rape, the reference \"contains rape oil from
genetically modified rape\" must appear in the list of ingredients.

\(c\) Where there is no list of ingredients, the words \"genetically
modified\" or \"produced from genetically modified \[name of
organism\]\" must appear clearly in the labeling.

Example 1:  \"a spirit containing caramel produced from genetically
modified corn\".\
Example 2:  \"genetically modified sweet corn\"

\(d\) If the product consists of or contains a GMO e.g. sweet corn in a
Mexican salad, the label must state \"genetically modified sweet corn\"

The designations in (a) and (b) may appear in a footnote to the
ingredients list, provided they are printed in a font at least the same
size as that of the list of ingredients or, where there is no list of
ingredients, clearly on the labeling.

Labeling for Genetically Modified Microorganisms (GMMs) and "Processing
Aides"

[The Commission stated on September 24,
2004](http://europa.eu.int/comm/food/committees/regulatory/scfcah/modif_genet/summary03_en.pdf)
that "food and feed (including food and feed ingredients such as
additives, flavorings and vitamins) produced by fermentation using a GMM
which is kept under contained conditions and is not present in the final
product are not included in the scope of Regulation (EC) No. 1829/2003.
These food and feed have to be considered as having been produced with
the GMM, rather than from the GMM."

Therefore, these products don't have to be labeled like products
produced from agricultural biotechnology. This was contrary to the
original position taken by the Commission in [April 2004 when the
Commission had proposed that these products be labeled (see point 2D,
Fermentation
Products).](http://europa.eu.int/comm/food/committees/regulatory/scfcah/general_food/summary10_en.pdf)

Likewise in the case of GMMs such as yeast used in alcoholic beverages,
the Commission doesn't require labeling if the GMM is not present in the
final food. Like vitamins, the EU justifies its stance on the basis that
the "...resulting food is considered to have been produced with a GMM,
but not from a GMM". This is also true of cheese that has been produced
"with" the use of chymosin, an enzyme that is genetically modified. Such
processing aides don't fall within the scope of the labeling
regulations.

Status of Seed Labeling Legislation

While the former Prodi College of Commissioners had intended in
September 2004 to propose a seed labeling amendment for the presence of
GM seeds commingled with conventional seed, the different directorate
generals (DG) couldn't reach agreement. Reportedly, DG Environment and
DG Agriculture pressed for a maximum AP of 0.3 percent for corn whereas
DG Health and Consumer Protection favored 0.5 percent. There was
agreement of 0.3 percent for rapeseed. Faced with this impasse, the
Prodi Commission called for additional research to determine the
economic impact of different thresholds on farmers and seed producers
before taking any further action. The Commission has been trying to
develop a policy on seed labeling since 2001 when the Scientific
Committee on Plants presented recommendations on AP levels for a number
of biotech seeds (corn---0.5 percent; soybeans---0.7 per cent; and
rapeseed --0.3 percent).

In the absence of a EU seed labeling regulation for the presence of
biotech seed, the Commission has stated "that since no thresholds for
the AP of GMOs in conventional seed lots have been established, any seed
lot containing GM seed authorized for the cultivation has to be labeled
as containing GMOs. Seed lots containing GM seeds that not authorized
for cultivation, can not be marketed in the EU."

Some members of the new Barroso Commission appear to favor setting AP
thresholds at the level of detection\--0.1 percent. In his parliamentary
hearings in September, Environment Commissioner Stavros Dimas voiced
support for 0.1. Likewise, Agriculture Commissioner Mariann
Fischer-Boel, one of the architects of Denmark's tough coexistence law
and a strong proponent of organic agriculture, also reportedly favors
very low thresholds.

## 

## Traceability

Under the rules for traceability in [Regulation (EC) No
1830/2003](http://europa.eu.int/eur-lex/pri/en/oj/dat/2003/l_268/l_26820031018en00240028.pdf),
business operators must transmit and retain information about products
that contain or are produced from GMOs at each stage of the placing on
the market.  Information concerning the presence of GMOs must be
transmitted throughout the commercial chain and must be retained for
five years.  The regulation covers all products, including food and
feed, containing or derived from GMOs that received an EU authorization,
e.g. GM seeds, GM grain, tomato paste and ketchup derived from a GM
tomato or starch, oil or flour produced from a GM maize.

\--for GMOs intended for deliberate release into the environment: 
operators must transmit specified information on the identity of the
individual GMO(s) a product contains;

\--for GMOs intended for food, feed or for processing:  business
operators may either transmit the specified information or transmit a
declaration that the product shall only be used as food or feed or for
processing together with the identity of the GMO(s) from which the
product was derived;

\--for food and feed produced from GMOs:  operators must inform the next
operator in the chain that the product is produced from GMO(s).

On January 14, 2004, the European Commission published [Commission
Regulation
65/2004](http://europa.eu.int/eur-lex/pri/en/oj/dat/2004/l_010/l_01020040116en00050010.pdf)
establishing a system for the development and assignment of unique
identifiers for GMOs.  A unique identifier is assigned to each GMO as a
means of indicating its presence and reflecting the specific
transformation event covered by the consent or authorization for placing
that GMO on the market.

Cartagena Biosafety Protocol

The EU is a signatory to the biosafety protocol. To align its regulatory
framework with the provisions of the Protocol, the EU has implemented a
[Regulation on transboundary movements of
GMOs](http://europa.eu.int/comm/environment/biotechnology/pdf/regu1946_2003.pdf)
that addresses in particular exports of living modified organisms. The
Regulation was approved by the Council of Ministers on 13 June and
entered into force in September 2003.

Trade Barriers

The current EU regulatory system and approval process for biotech
products is a barrier to trade. Since 1998, the EU has approved only 3
biotech events. Currently, the EU has a backlog of 30 products that are
awaiting approval. In view of the unwieldy and less than transparent
process for application and approval, we do not expect this backlog to
be reduced significantly in the short term.

In May 2003, the United States announced that it would initiate a WTO
dispute settlement process focused on the EU\'s de facto moratorium on
approvals of biotechnology products, and on the existence of individual
Member State marketing prohibitions on previously approved biotechnology
products. In March 2004, the WTO formed a panel to consider the
challenge of the United States, Argentina and Canada to the EU's
moratorium on the approval of new agricultural biotech products. The
final panel report is expected in the summer of 2005.

On April 18, 2004, the EU\'s newest regulations (EC No 1829/2003 and EC
No 1830/2003) concerning the labeling and traceability of biotech food
and feed products went into effect. These new regulations were intended
to address the Member States\' concerns about protecting consumer and
environmental interests. Despite the passage of these regulations, the
Member States continue to thwart the approval of new biotech products
that have received favorable risk assessments from the European Food
Safety Authority and the support of the EU Commission. In addition, 6
member states continue to maintain illegal marketing bans on a number of
approved biotech events.

Regulations 1829/2003 and 1830/2003 are frequently difficult to
understand and comply with and have had an adverse impact on trade. The
Commission has been slow to provide guidance documents to help exporters
interpret these new regulations. In particular, exporters have had
difficulty determining if their product (s) are subject to the new
labeling requirements. Finally, the EU has decided that products (such
as beer, wine and cheese) that are produced with genetically modified
\"processing aids\" are not subject to these regulations. This is
inconsistent with the intent of the new regulations.

In accordance with DG Agriculture\'s guidance document on the
coexistence of biotech and conventional crops, which recommended a
regional approach to coexistence issues, a number of member states,
including Denmark, Germany, and three regions in Austria, have drafted
new coexistence laws. These laws have taken a maximalist approach,
requiring extensive liability systems be put in place and mandating
extremely low thresholds for adventitious presence. Once enacted, the
European Commission may initiate infringement proceedings against a
member state's coexistence law if it is judged to be incompatible with
EU law. However, there is no time limit on how quickly the Commission
must act.

# Marketing Issues

The breakdown in the EU\'s approval process for products made from
biotechnology has blocked most U.S. exports of corn and hinders trade in
other products.  Many food processors and exporters have either
reformulated or sought out non-biotech sources in response to the
implementation of mandatory traceability and labeling requirements in
April 2004. Consumer ready products have been particularly hard hit.
Most European retailers' own-store brands are non-GM, while they may
consider carrying private supplier brands containing biotech
ingredients. Since labeling hasn't been required for animal products
such as meat and dairy, biotech feed ingredients have generally fared
better. Reportedly, about 2/3 of the animal feed consumed in the EU is
currently labeled as genetically modified. However, some consumer groups
are pressuring retailers to carry meat and dairy products produced from
non-biotech feed ingredients.

In a recent Eurobarometer poll on the environment, Europeans responded
that the impact of chemicals (41 percent) and biotechnology (40 percent)
were the two areas in which they most lacked information. Biotechnology
continues to be more of a political than a scientific issue in Europe
and the prospects for improvement remain dim.

Exports of Bt10 Corn

On March 22, 2004 Commission officials were advised that the company
Syngenta had inadvertently marketed the biotech corn Bt10 in the United
States from 2001-2004. Since Bt10 had not been authorized for marketing
in the EU, the Commission introduced emergency inspection measures to
identify the presence of Bt10 in exports of corn gluten feed and brewers
grains to the EU. The inspection system went into effect on April 18
2005, and will remain in place for 6 months at which time a review will
be conducted to determine whether it is still necessary. In 2003/04, the
United States shipped about 3.4 million tons of corn gluten feed, a
pelletized feed ingredient valued at about \$340 million, to the
European Union as a feed ingredient used in compound animal feed. To
date, no shipments of corn gluten have tested positive for Bt10.

**Capacity Building and Outreach**

Post has participated in two major outreach activities over the last
year that were funded by the Department of State. Working with the
European Policy Center, the Embassy of the United States to Italy and
the US Mission to the European Union organized a two-day Conference on
"*The EU, the US and Modern Biotechnology*" on 1 and 2 October 2004 in
Perugia, Italy. The conference focused on EU and US approaches to
regulating biotech products, drawing a wide range of participants from
government, universities, business and NGOs.

FAS Bucharest and the UN Environmental Program organized a similar
conference in Bucharest, Romania that featured the Agricultural Minister
Counselor from FAS Brussels and several European speakers. With area in
herbicide tolerant soybeans now reaching 100,000 hectares and Romania
slated for accession to the EU in 2007, this was an excellent
opportunity to underscore the benefits of biotechnology.

**Visit our website:** our website
**[www.useu.be/agri/usda.html]{.underline}** provides a broad range of
useful information on EU import rules and food laws and allows easy
access to USEU reports, trade information and other practical
information. E-mail: AgUSEUBrussels@usda.gov

**Related reports from USEU Brussels and other FAS offices in the EU:**

+---------+---------+---------------------------------------+---------+
| *       | *       | **Title**                             | **Date  |
| *Report | *Post** |                                       | Rel     |
| N       |         |                                       | eased** |
| umber** |         |                                       |         |
+=========+=========+=======================================+=========+
| E35044  | USEU    | Recent Biotech Developments in the EU | 3/3/05  |
+---------+---------+---------------------------------------+---------+
| E35026  | USEU    | 20 EU Regions Defend Right to Ban     | 2/10/05 |
|         |         | Biotech Production                    |         |
+---------+---------+---------------------------------------+---------+
| E35008  | USEU    | The EU's Biotech Regulatory Process:  | 1/13/05 |
|         |         | Who's Being Protected                 |         |
+---------+---------+---------------------------------------+---------+
| E34096  | USEU    | The EU's Biotech Regulatory           | 12/3/04 |
|         |         | Process---                            |         |
|         |         |                                       |         |
|         |         | A New Tower of Babel                  |         |
+---------+---------+---------------------------------------+---------+
| E34078  | USEU    | EU Commission Approves Monsanto's     | 11/1/04 |
|         |         | Biotech Corn, NK603                   |         |
+---------+---------+---------------------------------------+---------+
| E34057  | USEU    | MON810 Biotech Corn Enters EU Common  | 9/9/04  |
|         |         | Catalogue                             |         |
+---------+---------+---------------------------------------+---------+
| E34009  | USEU    | Update on the EU's Biotech Approval   | 5/6/04  |
|         |         | Process                               |         |
+---------+---------+---------------------------------------+---------+
| E24069  | USEU    | Antibiotic Resistance Marker Genes    | 4/21/04 |
+---------+---------+---------------------------------------+---------+
| E24045  | USEU    | Safe as Conventional Rapeseed         | 4/4/04  |
+---------+---------+---------------------------------------+---------+
| E23234  | USEU    | Bt11 Sweet Corn                       | 12/9/03 |
+---------+---------+---------------------------------------+---------+
| E23233  | USEU    | Safe as Conventional Corn             | 12/8/03 |
+---------+---------+---------------------------------------+---------+
| AU4032  | Vienna  | Austria Liberalizes Biotech Law, but  | 12      |
|         |         | Barriers for Biotech Crops Remain     | /2/2004 |
+---------+---------+---------------------------------------+---------+
| AU4017  | Vienna  | Implementation of EU Traceability and | 7       |
|         |         | Labeling Regulations                  | /7/2004 |
+---------+---------+---------------------------------------+---------+
| AU4015  | Vienna  | U.S. Farmers Representatives meet     | 7       |
|         |         | Austrian journalist                   | /2/2004 |
+---------+---------+---------------------------------------+---------+
| AU4009  | Vienna  | Consumer Attitudes on Biotechnology   | 3/      |
|         |         |                                       | 16/2004 |
+---------+---------+---------------------------------------+---------+
| AU4006  | Vienna  | Major Food Retailers Say "NO" to      | 2/      |
|         |         | Biotech Foods                         | 19/2004 |
+---------+---------+---------------------------------------+---------+
| AU4002  | Vienna  | \"The Consumer is always right!\"     | 2/      |
|         |         |                                       | 03/2004 |
+---------+---------+---------------------------------------+---------+
| EZ4011  | Vienna  | New GMO Law                           | 4/      |
|         |         |                                       | 07/2004 |
+---------+---------+---------------------------------------+---------+
| EZ4010  | Vienna  | National Biosafety Framework          | 4/      |
|         |         |                                       | 06/2004 |
+---------+---------+---------------------------------------+---------+
| EZ4001  | Vienna  | Status of Biotech                     | 1/      |
|         |         | Regulations\--Central Europe          | 02/2004 |
+---------+---------+---------------------------------------+---------+
| DA5002  | The     | Danish Advisory Committee Call for    | 1/      |
|         | Hague   | Consumer Acceptance of Biotechnology. | 10/2005 |
+---------+---------+---------------------------------------+---------+
| DA4001  | The     | Proposed Danish Legislation for GM    | 3/      |
|         | Hague   | Co-existence                          | 08/2004 |
+---------+---------+---------------------------------------+---------+
| FR5030  | Paris   | Primary Conclusions of French         | 4/      |
|         |         | Parliamentary Working Group on        | 18/2005 |
|         |         | Biotech                               |         |
+---------+---------+---------------------------------------+---------+
| FR5023  | Paris   | French Parliamentarians Debate        | 3/      |
|         |         | Biotechnology                         | 16/2005 |
+---------+---------+---------------------------------------+---------+
| FR5014  | Paris   | Biodiversity and Biotechnology        | 2/      |
|         |         |                                       | 17/2005 |
+---------+---------+---------------------------------------+---------+
| FR4057  | Paris   | French President Announces Framework  | 11/     |
|         |         | Law on Biotech Crops                  | 22/2004 |
+---------+---------+---------------------------------------+---------+
| FR4062  | Paris   | Implementation of NF/NF and T&L       | 11/     |
|         |         | Regulations in France                 | 10/2004 |
+---------+---------+---------------------------------------+---------+
| FR4041  | Paris   | French Biotech Supporters Try to      | 8/      |
|         |         | Defend Test Plots from Destruction    | 19/2004 |
+---------+---------+---------------------------------------+---------+
| FR4033  | Paris   | French Food Safety Agency Reports     | 8/      |
|         |         | Benefits of Biotech to Human Health   | 02/2004 |
+---------+---------+---------------------------------------+---------+
| GM5013  | Berlin  | Marginal Improvement on Biotech       | 3/      |
|         |         | Regulations in Germany                | 18/2005 |
+---------+---------+---------------------------------------+---------+
| GM4051  | Berlin  | German Genetech Law and GMO Test      | 12/     |
|         |         | Plantings in 2004                     | 02/2004 |
+---------+---------+---------------------------------------+---------+
| GM4042  | Berlin  | German Genetech Law Expected to Be    | 10/     |
|         |         | Passed                                | 28/2004 |
+---------+---------+---------------------------------------+---------+
| GM4029  | Berlin  | European Commission not Happy with    | 8/      |
|         |         | Germany Genetech Law                  | 10/2004 |
+---------+---------+---------------------------------------+---------+
| GM4023  | Berlin  | German Court Ruling Against           | 6/      |
|         |         | Greenpeace                            | 25/2004 |
+---------+---------+---------------------------------------+---------+
| GM4019  | Berlin  | Agricultural Biotechnology - Recent   | 3/      |
|         |         | Events                                | 11/2004 |
+---------+---------+---------------------------------------+---------+
| GM4016  | Berlin  | Biotech Wheat Test Planting in        | 5/      |
|         |         | Germany                               | 03/2004 |
+---------+---------+---------------------------------------+---------+
| GM4015  | Berlin  | Aggressive Greenpeace Campaign        | 5/      |
|         |         | against GMO Labeled Food Products     | 03/2004 |
+---------+---------+---------------------------------------+---------+
| GM4014  | Berlin  | German Farmers\' Interest in Planting | 5/      |
|         |         | Bt-Corn                               | 03/2004 |
+---------+---------+---------------------------------------+---------+
| IT5003  | Rome    | Italy\'s Coexistence Law - English    | 2/      |
|         |         | Text                                  | 02/2005 |
+---------+---------+---------------------------------------+---------+
| NL4008  | The     | Enforcement and Implications of the   | 3/      |
|         | Hague   | EU T&L Legislation                    | 05/2004 |
+---------+---------+---------------------------------------+---------+
| PO4023  | Lisbon  | Biotechnology Report                  | 10/     |
|         |         |                                       | 27/2004 |
+---------+---------+---------------------------------------+---------+
| PO4016  | Lisbon  | Biotechnology Report                  | 9/      |
|         |         |                                       | 16/2004 |
+---------+---------+---------------------------------------+---------+
| LO5002  | Vienna  | Amendment to GMO Act No. 151/2002     | 3/      |
|         |         |                                       | 09/2005 |
+---------+---------+---------------------------------------+---------+
| LO4011  | Vienna  | Slovakia\'s Biosafety Framework       | 7/      |
|         |         |                                       | 07/2004 |
+---------+---------+---------------------------------------+---------+
| LO4002  | Vienna  | Consumer Perceptions of Biotech       | 1/      |
|         |         |                                       | 20/2004 |
+---------+---------+---------------------------------------+---------+
| SI4007  | Vienna  | NGO Efforts                           | 2/      |
|         |         |                                       | 11/2005 |
+---------+---------+---------------------------------------+---------+
| SI4004  | Vienna  | GMO Testing                           | 3/      |
|         |         |                                       | 25/2004 |
+---------+---------+---------------------------------------+---------+
| SP4028  | Madrid  | Coexistence/ November 2004            | 11/     |
|         |         |                                       | 16/2004 |
+---------+---------+---------------------------------------+---------+
| SP4004  | Madrid  | Spain Approves Nine GMO Corn          | 2/      |
|         |         | Varieties for Planting                | 24/2004 |
+---------+---------+---------------------------------------+---------+
| SW4005  | St      | Sweden Approves First Genetically     | 4/      |
|         | ockholm | Engineered Product for Commercial     | 15/2005 |
|         |         | Plantin                               |         |
+---------+---------+---------------------------------------+---------+
| UK4025  | London  | Four year UK study finds benefits in  | 12/     |
|         |         | biotech crops                         | 20/2004 |
+---------+---------+---------------------------------------+---------+
| These   |         |                                       |         |
| reports |         |                                       |         |
| can be  |         |                                       |         |
| a       |         |                                       |         |
| ccessed |         |                                       |         |
| through |         |                                       |         |
| our     |         |                                       |         |
| website |         |                                       |         |
| [       |         |                                       |         |
| www.use |         |                                       |         |
| u.be/ag |         |                                       |         |
| ri](htt |         |                                       |         |
| p://www |         |                                       |         |
| .useu.b |         |                                       |         |
| e/agri) |         |                                       |         |
| or      |         |                                       |         |
| through |         |                                       |         |
| the FAS |         |                                       |         |
| website |         |                                       |         |
| <h      |         |                                       |         |
| ttp://w |         |                                       |         |
| ww.fas. |         |                                       |         |
| usda.go |         |                                       |         |
| v/scrip |         |                                       |         |
| tsw/att |         |                                       |         |
| acherep |         |                                       |         |
| /defaul |         |                                       |         |
| t.asp>. |         |                                       |         |
+---------+---------+---------------------------------------+---------+