Senior Bush administration officials are pressuring the European Union to abandon its plan to adopt new regulations on genetically modified organisms (GMOs). US officials argue that the new proposals discriminate against US products, which in-turn could cost US companies 4.4 billion euro a year.
US officials claim that the new proposals by the European Commission, which require the labelling of genetically engineered products, violate World Trade Organisation requirements, raising the possibility of another major trade dispute. The US has yet to announce publicly what type of punitive action it might take against the EU. The US has the possibility to bring a legal case before the WTO, and if it wins, could impose strict economic sanctions on the EU.
The costs of the new EU regulations could far exceed other transatlantic trade battles, such as those over bananas and growth hormones in beef. The US is especially concerned that new EU legislation will force exporters into expensive testing of agricultural products for GMO content because GM crops are not separated from natural crops in the US. Current EU regulations already ban most US corn products