Voluntary Report - public distribution

**Date:** 1/13/2005

**GAIN Report Number:** E35008

E39999

**EU-25**

**Biotechnology**

**The EU\'s Biotech Regulatory System -- Who's Being Protected?**

**2005**

**Approved by:**

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

U.S. Mission to the EU

**Prepared by:**

Stan Cohen

**Report Highlights:**

European policymakers unfailingly invoke consumer concerns and food
scares (BSE and dioxin) to justify the EU\'s onerous regulatory system
for biotech products. NGOs repeatedly assert that consumers distrust the
safety of biotech food products and will not buy them. The EU views its
all encompassing labeling and traceability regulations as critical to
assuaging consumer concerns.

Or so it seemed. But then in a change of heart, the Commission relented
and exempted from labeling a number of products produced from
genetically modified microorganisms, including vitamins. With sales
estimated at nearly US\$ 6 billion, Europe\'s vitamin and mineral
supplement manufacturers were thus spared the fate of slapping a GM
label on a product so widely consumed in Europe.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Brussels USEU \[BE2\]

\[E3\]

European policymakers unfailingly invoke consumer concerns and food
scares (BSE and dioxin) to justify the EU's byzantine regulatory system
for biotech products. However, the authors of a recent World Bank Report
suggest that the commercial interests of European farmers also explain
the EU's resistance to agricultural biotechnology:

"Our results suggest that heightened domestic consumer or
environmentalist opposition to genetically modified (GM) crops is not
the only reason why there has been a moratorium on the production and
sale of GM foods in regions like the EU. Rather, differences in
comparative advantage in the adoption of GM crops may be sufficient to
explain the trans-Atlantic difference in GM policies.

On the one hand, it is rational for producers in the EU (whose
relatively small farms would enjoy less gains from the new biotechnology
than broad-acre American farms) to reject GM technologies if that
enables them, with the help of consumer and environmental lobbyists, to
argue for restraints on GM-adopting countries. ... When faced with a
more efficient competitor, the optimal response of farmers in countries
with a comparative disadvantage in GM adoption is to lobby for (or at
least not resist) more stringent GM standards." [^1]

Similarly, a University of California report cites the commercial
interests of the EU's large chemical industry to explain the EU's
anti-biotech stance: "The European rejection of agricultural
biotechnologies cannot be explained as simply a case of consumer
preferences; it also reflects the self-interest of the European
agricultural inputs industry and farmers. European chemical firms have
the advantage in agricultural chemicals while U.S. firms have the
advantage in biotech..." [^2]

While the EU may lag behind the United States in agricultural
biotechnology, European pharmaceutical companies are world leaders in
the use of biotechnology to produce vitamins and supplements. As "a more
efficient competitor" in this sector, the European pharmaceutical
industry has lobbied the EU Commission to exempt its products from the
labeling requirements that apply to the products of agricultural
biotechnology.

In particular, the EU's position on products (vitamins such as
riboflavin) derived from genetically modified microorganisms (GMMs) has
been an area of great concern to the European industry. The Commission's
original view was that these products would have to be labeled like any
other product derived from a GMO. That is, they fell within the scope of
the EU's new labeling requirements as spelled out in Regulation (EC) No.
1829/2003.

Thus an EU committee on food safety on April 30, 2004 took the
unequivocal position that "...substances such as food/feed additives,
vitamins or processing aides produced by fermentation of microorganisms
fall in the scope of the legislation (authorization and labeling) when
produced from a genetically modified microorganism (GMM), irrespective
of the whether the substrate used for the fermentation is genetically
modified or not." [^3]

But in an abrupt about face on September 24, 2004, this same committee
reversed its position and in a bravura display of sophistry declared
"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." [^4]

Thus white biotechnology\--the contained use of GMMs\--emerged
victorious: less stringent standards for Europe's most advanced GM
sector. While the products of agricultural or green biotechnology would
still have to be labeled in the interests of informing consumers.

Oddly enough, the EU's new position on GMMs failed to provoke an outcry
from the NGO community. Not the typical polemics about caving in to the
interests of huge multinationals and abandoning the interests of
consumers. Calling attention to this decision might have revealed just
how pervasive biotech products already are in the food chain. And
without any ill-effects.

Biotech foes have also paid scant attention to the EU's flexible and
relaxed regulatory attitude toward the use of the GM enzyme chymosin in
the making of cheese. Chymosin is used as an alternative to rennet which
comes from calve stomachs. The EU's Directive 2000/13/EC on general
labeling specifically exempts from labeling chymosin and other GM lactic
products, enzymes or micro cultures.

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". While one would think that the same logic would
apply to a highly refined soybean oil where no modified DNA is
detectable, the EU's watch guards of public health have deemed
otherwise.

**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.

**Related reports from USEU Brussels:**

+--------------+------------------------------------+-----------------+
| **Report     | **Title**                          | **Date          |
| Number**     |                                    | Released**      |
+--------------+------------------------------------+-----------------+
| E34096       | The EU's Biotech Regulatory        | 12/3/04         |
|              | Process---                         |                 |
|              |                                    |                 |
|              | A New Tower of Babel               |                 |
+--------------+------------------------------------+-----------------+
| E34078       | EU Commission Approves Monsanto's  | 11/1/04         |
|              | Biotech Corn, NK603                |                 |
+--------------+------------------------------------+-----------------+
| E34057       | MON810 Biotech Corn Enters EU      | 9/9/04          |
|              | Common Catalogue                   |                 |
+--------------+------------------------------------+-----------------+
| E34009       | Update on the EU's Biotech         | 5/6/04          |
|              | Approval Process                   |                 |
+--------------+------------------------------------+-----------------+
| E24069       | Antibiotic Resistance Marker Genes | 4/21/04         |
+--------------+------------------------------------+-----------------+
| E24045       | Safe as Conventional Rapeseed      | 4/4/04          |
+--------------+------------------------------------+-----------------+
| E23234       | Bt11 Sweet Corn                    | 12/9/03         |
+--------------+------------------------------------+-----------------+
| E23233       | Safe as Conventional Corn          | 12/8/03         |
+--------------+------------------------------------+-----------------+

[^1]: Trade, Standards, and the Political Economy of Genetically
    Modified Food, Anderson, Damania, and Jackson,
    <http://econ.worldbank.org/files/38347_wps3395.pdf>

[^2]: Explaining Europe's Resistance to Agricultural Biotechnology,
    Graff and Zilberman,
    [http://www.agecon.ucdavis.edu/outreach/areupdatepdfs/UpdateV7N5/V7N5_1.pd](http://www.agecon.ucdavis.edu/outreach/areupdatepdfs/UpdateV7N5/V7N5_1.pdf)

[^3]: <http://europa.eu.int/comm/food/committees/regulatory/scfcah/general_food/summary10_en.pdf>

[^4]: <http://europa.eu.int/comm/food/committees/regulatory/scfcah/modif_genet/summary03_en.pdf>