Europe Trapped in the Vice of Downward Economic Growth and Limited Technological Innovation: Lashes Out at More Competitive Nations' Products and Technologies, Thus Exacerbating Trade Tensions
http://online.wsj.com/article/SB120033608647888955.html?mod=fox_australian
U.S. Threatens Sanctions on EU Modified-Crop Bans In France, Elsewhere Increase Tensions
WALL STREET JOURNAL
By JOHN W. MILLER
January 15, 2008 BRUSSELS --
The U.S. said it will retaliate with trade sanctions unless European Union countries reverse illegal bans on planting genetically modified crops, threatening escalation in the long-running trans-Atlantic dispute over engineered foods.
Yesterday's announcement came just two days after French President Nicolas Sarkozy said he would join a handful of other EU countries in banning permanently the only genetically modified crop the EU has licensed for cultivation -- Monsanto Co.'s MON810, a corn used for animal feed.
The U.S. threat of retaliation is the result of an early U.S. complaint against EU member Austria, which missed a World Trade Organization deadline to lift its ban on the corn Friday. Mr. Sarkozy's decision, however, has bigger implications.
France is the second-biggest user of MON810 in Europe and the EU's agriculture powerhouse. Its decision to ban the corn would be a significant defeat for U.S. biotech companies, already struggling to get a piece of the EU's $7 billion seed market. [TRADE PROTECTIONISM]**
"We are taking steps necessary under World Trade Organization rules to preserve our right in the WTO to suspend trade concessions," said Gretchen Hamel, a spokeswoman for the U.S. trade office. "It is hard to overstate our disappointment with this new biotech ban announced by the government of France."
The U.S. won a suit two years ago at the WTO over Austria's refusal to allow cultivation of MON810. Under WTO rules, a country can prohibit a product only for safety reasons, but the EU's own food-safety watchdog has said MON810 isn't dangerous to human health. Austrian officials say they have no plans to lift their ban on the corn. [SCIENTIFIC EVIDENCE RUNS COUNTER TO THESE CLAIMS]**
Under WTO rules, the U.S. retaliation could take the form of punitive trade tariffs on popular goods from Austria, such as the soft drink Red Bull, which is produced by Red Bull GmbH. Now that France has joined the ban, the U.S. could extend its trade sanctions to French wines or other sensitive goods. The U.S. also could ask the EU to lower some of its tariffs on U.S. goods in specific markets, as compensation.
"There are no grounds whatsoever" for France to ban MON810, said Jonathan Ramsay, a lobbyist for Monsanto in Brussels. Monsanto will explore "all legal remedies," he added.
Environmentalists, however, welcomed the French move. "It's the first time one of the big EU countries is making the right choice," says Marco Contiero, policy director for Greenpeace in Brussels. [GREENPEACE & OTHER ENVIRONMENTAL EXTREMIST GROUPS HAVE PROMOTED THIS ACRIMONY AS PART OF THEIR EFFORTS TO SECURE EU CONTROL OVER 'GLOBAL REGULATORY GOVERNANCE']***
EU farmers have been growing more and more MON810 corn since it was approved for use in 1998. Last year, the bloc grew 110,000 hectares of the corn, up from 62,000 in 2006.
Under EU law, countries can opt out of an EU regulation if they can show it goes against a core national interest. As evidence, French officials cite a report released last week by a commission Mr. Sarkozy formed to review the safety of Monsanto's corn. The report says pollen from MON810 is too easily transmittable to neighboring crops and can infect nearby butterflies and worms.
Many French farmers say they need the corn to cut their pesticide bills. MON810 generates a protein that kills the European corn borer, which destroys corn crops. The EU's executive body, the European Commission, said it will challenge the French ban.
http://www.nytimes.com/2008/01/15/business/worldbusiness/15biofuel.html?th=&emc=th&pagewanted=print
NEW YORK TIMES
January 15, 2008
Europe May Ban Imports of Some Biofuel Crops
By JAMES KANTER
PARIS — In a sign of growing concern about the impact of supposedly “green” policies, European Union officials will propose a ban on imports of certain biofuels, according to a draft law to be unveiled next week.
If approved by European governments, the law would prohibit the importation of fuels derived from crops grown on certain kinds of land — including forests, wetlands or grasslands — into the 27-nation bloc.
The draft law would also require that biofuels used in Europe deliver “a minimum level of greenhouse gas savings.” That level is still under discussion.
Currently, most of the crops for biofuels used in Europe consist of rapeseed (commonly known as canola in the United States) grown in parts of Europe, according to Matt Drinkwater, a biofuels analyst at New Energy Finance in London. Europe also imports some palm oil from Southeast Asia, soy from Latin America, ethanol from Brazil, and produces some ethanol domestically using wheat and sugar beets, he said.
The ban would primarily affect palm oil and possibly the Latin American imports.
Amid rising prices for gasoline and diesel and worries about climate change, countries around the world have started using more fuels produced from crops or agricultural wastes.
The amount of ethanol used in the United States represents about 5 percent of total gasoline consumption, according to Matt Hartwig, a spokesman for the Renewable Fuels Association in Washington. Ethanol produced from sugar cane is widely used in Brazil. In Europe and to a lesser extent in the United States, vegetable oils have been converted into a type of diesel by a simple chemical procedure.
But a flurry of studies has discredited some of the claims made by biofuel producers that the fuels help reduce greenhouse gases by reducing fossil fuel use and growing carbon-dioxide-consuming plants. Growing the crops and turning them into fuel can result in considerable environmental harm.
Not only is native vegetation, including tropical rain forests, being chopped down in places to plant the crops, but fossil fuels, like diesel for tractors, are often used to farm the crops. They also demand nitrogen fertilizer made largely with natural gas and consume huge amounts of water.
Already, the draining and deforesting of peatlands in Southeast Asia — mainly to make way for palm plantations — accounts for up to 8 percent of global annual carbon dioxide emissions, said Adrian Bebb of Friends of the Earth, an environmental group.
In Indonesia, he said, more than 18 million hectares of forest, or 44 million acres, have already been cleared for palm oil developments. Environmental groups say the developments are endangering wildlife like the orangutan and the Sumatran tiger, and putting pressure on indigenous peoples who depend on the forests.
Western scientists are increasingly pointing out the need to distinguish between types of biofuels. On Monday, for instance, the Royal Society, a national science academy in Britain, said requirements to use a certain percentage of biofuels were not sufficient. Instead, the society said, there should be specific goals for emissions reductions.
“Indiscriminately increasing the amount of biofuels we are using may not automatically lead to the best reductions in emissions,” said John Pickett, head of biological chemistry at Rothamsted Research, a research center in Britain, who helped write the report for the Royal Society. “The greenhouse gas savings of each depends on how crops are grown and converted and how the fuel is used.”
Last week, scientists at the Smithsonian Tropical Research Institute in Washington also warned that biofuel production can result in environmental destruction, pollution and damage to human health.
“Different biofuels vary enormously in how eco-friendly they are,” said William Laurance, a staff scientist at the institute. “We need to be smart and promote the right biofuels.”
Experts say certain types of fuels, particularly those made from agricultural wastes, still hold potential to improve the environment, but they add that governments will have to set and enforce standards for how the fuels are produced. With its new proposal, Europe appears to be moving ahead of the rest of the world in that task.
The draft law probably would have the greatest impact on palm oil growers in countries like Malaysia and Indonesia, according to Mr. Drinkwater. [DISGUISED TRADE PROTECTIONISM -- SEE ITSSD STUDY AT BRITISH LIBRARY DIRECT at: http://direct.bl.uk/bld/PlaceOrder.do?UIN=215946290&ETOC=RN&from=searchengine .
“Some developments in Southeast Asia will almost certainly be blocked by these provisions,” he said, adding that the rules would make it much harder to plant on recently deforested land or to export fuels whose production process cause significant amounts of greenhouse gases to be released.
But farmers growing corn for ethanol could also be affected, because the European rules contain provisions on preserving grasslands, said Mr. Drinkwater.
The text, which could change before European commissioners meet on Jan. 23 to adopt a final version, also emphasizes that areas like rain forests and lands with high levels of biodiversity should not be converted to growing biofuels.
The European Union does not want to completely abandon biofuels because they could still contribute to reducing Europe’s dependence on fossil fuels.
In part, that is because biofuels — a blanket term covering fuels grown from crops to manufacture substitutes for diesel and gasoline — are seen as Europe’s main weapon in lowering emissions from transportation. And transportation has the fastest growing levels of greenhouse gases among all sectors of Europe’s economy.
On Monday, in answer to a reporter’s question, an organization representing major growers of crops for biofuels in Malaysia said the E.U. should be cautious before imposing new rules. It said that farmers in the region were adopting more sustainable practices, and warned that restrictions on imports could cause trade tensions.
“The Malaysian government is very concerned about the E.U. scheme for sustainability of biofuels,” said Zainuddin Hassan, the manager in Europe for the Malaysian Palm Oil Council in Brussels. The measures “should not be a trade barrier to the palm oil industry and it should comply with the W.T.O. rules as well,” he said, referring to the World Trade Organization.
Verifying that only environmentally sound biofuels are being imported into Europe would be left to individual countries. But the draft law calls for penalties for violating the rules, like exclusion from tax breaks, to be enforced across the region.
The draft law also says that biofuels should be tracked from origin to use “so that biofuels fulfilling the sustainability criteria can be identified and rewarded with a premium in the market.”
The measures are part of a plan for Europe to implement a binding target of making 10 percent of the transport fuels consumed by 2020 from renewable sources — most of which are expected to be biofuels.
Ferran Tarradellas Espuny, spokesman for Europe’s energy commissioner, Andris Piebalgs, said that European countries that used more than 10 percent of biofuels in their transport fuel mix could use their progress to help them to reach other European environmental targets. Those include a goal of a 20-percent share of renewable sources in overall energy consumption by 2020. [NUANCED REFERENCE TO KYOTO PROTOCOL & UN LAW OF THE SEA CONVENTION (UNCLOS)]*******
Europe already has a suggested target of making biofuels 5.75 percent of fuels used for transport by 2010. But that target is not going to met, according to the draft law. Biofuels were just 1 percent of transport fuel in 2005 and, if present trends continue, would account for 4.2 percent by 2010.
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