In the past, the United States (US) and European Union (EU) have had trade rows over bananas, steel and tax breaks for American exporters. The latest skirmish which is set to reach the World Trade Organisation (WTO) pertains to genetically modified (GM) crops. Four years ago, the EU stopped processing new applications for GM crops till it completed an internal assessment of their health and environmental impacts. American farmers and exporters which dominate world trade in GM crops today were the worst hit by this moratorium. The US made noisy protests but, recognising the strong tide of public opposition to GM crops in Europe, sensibly chose to wait it out. But two recent developments have now led it to formally challenge the EUs policy on GM crops. First, even after the EU concluded last year that GM crops did not pose a threat to health and environment, it proposed stringent, mandatory labelling requirements on GM products marketed in the region, hurting (largely American) economic interests. The second stemmed from hostility to GM crops on the part of African nations which, early this year, refused American food aid believing any contamination by the same of local produce could, in turn, cost them vital access to European markets.
As things stand now, the US can be almost certain of winning the trade dispute since the EUs stance lacks scientific validity. But a US victory at the WTO even as it may provide useful leverage vis-a-vis American demands for European farm trade liberalisation in the ongoing Doha trade round will hardly boost Europes demand for GM products. In fact, a resentful populace could shy away from American products altogether. The US food industry thus must not underestimate the importance of winning over their hearts and minds. Second, the trade dispute has relevance for India too. A new, aggressive US should prompt India to revisit its own regulatory approach, which is uncomfortably close to the EUs, given our excessively cautious policy stance, regulators who drag their feet over GM approvals and who tend to be swayed by the Greens anti-GM bias, a politicised system of approvals, and a largely uninformed public. A move away from the same towards a common sense approach based on sound science rather than half-truths will only benefit Indian agriculture.