	Background

In May 2003, the United States, Canada, and Argentina requested consultations—the first step in WTO dispute settlement—with the European Union (EU) concerning the latter's de facto moratorium since 1998 on approving new genetically engineered (GE) products. Although the EU recommenced approvals in May 2004 with the approval of a GE corn variety for human consumption, a number of EU member states continue to block dissemination of approved biotech varieties. In the three years before the de facto ban, U.S. corn exports to the EU averaged about $300 million annually, according to USDA data (Spain and Portugal were the largest EU importers). The EU announced on December 19, 2006, that it would not appeal the panel's ruling in the case. The United States and EU agreed that a reasonable period of time would be until November 21, 2007, a deadline subsequently extended by mutual agreement until January 11, 2008. In May 2004, the EU effectively ended the moratorium by approving a GE corn variety (Syngenta Bt-11) for human consumption. While the United States and the EU are continuing technical discussions on market access issues for biotech products, both Canada and Argentina have settled their disputes with the EU. On July 15, 2009, Canada and the EU signed a final settlement of the WTO dispute that Canada had brought against the EU in May 2003. Similarly, Argentina and the EU announced their final settlement of the biotech dispute on March 18, 2010. All three parties have notified these settlements to the DSB as mutually agreed solutions. Both settlements provide for bilateral, biannual meetings between competent services of the European Commission and the co-complainants' authorities regarding the application of biotechnology to agriculture and related trade issues of mutual interest, including
follow-up of authorizations of genetically modified products of interest to each of the parties; measures related to biotechnology that may affect trade between the parties, including measures adopted by EU member states; specific issues that arise in the context of requests for authorization submitted to regulatory evaluations; any trade impacts of asynchronous authorizations of genetically modified products; renewal of authorizations of genetically modified products; and exchanges of information regarding such issues as new legislation affecting biotechnological agriculture, or coordination mechanisms to solve eventual cases of adventitious presence of non-authorized GMOs in shipments of authorized products. The options for the Obama Administration appear to be either to continue a dialogue with the EU on biotechnology policy and trade or to pursue retaliation for failure to comply with the earlier adverse ruling. Before the United States could impose retaliatory measures, however, it would have to request establishment of a panel to determine whether the EU had complied with the November 21, 2006, decision in the dispute. Chronology of the U.S.-EU Biotech Dispute (DS291)
In May 2003, the United States, Canada, and Argentina initiated a dispute with the European Union concerning the EU's de facto moratorium on biotechnology product approvals, in place since 1998. Although the EU effectively lifted the moratorium in May 2004 by approving a genetically engineered (GE) corn variety (MON810), the three complainants pursued the case, in part because a number of EU member states continue to block already approved biotech products. Industry estimates are that the moratorium costs U.S. corn growers some $300 million in exports to the EU annually. Corn gluten exports from the United States to the EU have been blocked since 2007 because of a zero tolerance policy governing the accidental presence of non-approved U.S. GE corn in such shipments.
On November 21, 2006, the WTO's Dispute Settlement Body (DSB) adopted the dispute panel's report, which ruled that a moratorium had existed, that bans on EU-approved GE crops in six EU member countries violated WTO rules, and that the EU failed to ensure that its approval procedures were conducted without "undue delay." The EU announced it would not appeal the ruling. The United States and EU agreed on November 21, 2007 (subsequently extended to January 11, 2008), as a deadline for EU implementation of the panel report. On January 11, 2008, the U.S. Trade Representative announced that, while it was reserving its rights to retaliate, it would hold off seeking a compliance ruling while the United States sought to normalize trade in biotechnology products with the EU.
In the meantime, co-complainants Canada (July 15, 2009) and Argentina (March 18, 2010) have reached "final settlements" in the biotech dispute with the EU. Canada, Argentina, and the EU notified the DSB of their mutually agreed solution under Article 3.6 of the DSU. The parties agreed to establish a bilateral dialogue on agricultural biotech market access issues of mutual interest.
U.S. agricultural and trade officials continue to criticize the EU for its biotech approval processes. During the second session of the 111th Congress, Members with agricultural interests may debate the issue of whether to continue a dialogue with the EU on re-establishing trade in biotechnology products or to seek retaliation for presumed lack of EU compliance with the panel decision.