Bush administration officials say they have no doubt the United States will win a World Trade Organization (WTO) challenge against the European Union (EU) moratorium on processing applications for new products derived from biotechnology.

"This is a case that is so solidly grounded that we are very confident that we will succeed," Under Secretary of State Alan Larson said in a May 14 briefing at the Foreign Press Center in Washington.

Larson and three other officials from the Office of the U.S. Trade Representative (USTR) and the U.S. Department of Agriculture made the comments on the day following announcement that the United States, Argentina, Canada and Egypt, joined by nine third-party supporters, were initiating consultations with the EU, the first step in WTO dispute-settlement procedure.

"We are not interested in a dispute, Larson said. "We are interested in resolving disputes." If as a result of consultations the EU ends the five-year moratorium, he said, "we'd be very pleased."

He said that if the EU did lift its moratorium, then the United States would consider whether to continue the WTO dispute-settlement challenge.

Larson and the others reiterated the arguments made the preceding day -- that science has repeatedly demonstrated the safety of biotech food, that the EU ban is not based on science and therefore violates WTO rules, and that the EU ban is discouraging developing countries from importing food that could feed their hungry people and seeds that could make their farmers more productive.

"There are many, many countries in the world that are not proceeding with biotechnology because of this moratorium and concerns that they will not be able to market their products in the European market," said John Veroneau, USTR's chief counsel.

Larson and the others deflected some questions related to a proposed EU scheme for labeling products as produced by biotechnology. Larson did suggest that a labeling scheme could be rigged in a protectionist way "that would establish tolerances and requirements that would be, in practice, impossible to comply with."

Describing a number of food safety problems that have beset the EU, Larson contrasted the assured safety of food for U.S. consumers and of U.S. food exports.

"One of the reasons we have a strong record is that we have food safety review processes that are scientific and not politicized," Larson said.

MR. DENIG: Good morning, ladies and gentlemen and welcome to the Washington Foreign Press Center. Welcome, also, to journalists assembled in our New York Foreign Press Center. On this beautiful day in Washington, we have a discussion briefing for you on the case that the United States is bringing before the WTO on the European Union's biotech moratorium. And here to discuss this with us, we have not one, but four experts: We have Ambassador Allen Johnson, the Chief Agricultural Negotiator from the U.S. Trade Representative's office. We have Under Secretary Alan Larson, the Under Secretary of State for Economic, Business and Agricultural Affairs; David Hegwood, the Counsel to the Secretary of Agriculture, and John Veroneau, the General Counsel in the Office of U.S. Special Trade Representative.

Each one of these gentlemen will have an opening statement, and after that we'll be glad to take your questions. The first speaker will be Ambassador Allen Johnson from the USTR.

MR. JOHNSON: Well, first of all, good afternoon. Thank you all for coming. Again, today we're here to discuss the announcement yesterday by Secretary Veneman [Secretary of Agriculture Ann Veneman] and Ambassador Zoellick [U.S. Trade Representative Robert Zoellick] that we're moving forward with requesting consultations with Europe regarding their moratorium on the approval of biotech products.

The moratorium has been in effect for, now, five years. It's inconsistent with Europe's own policies and the WTO obligations to provide sufficient scientific evidence and undue delay in the regulatory process and consideration of these products.

This is a problem that has been internationally recognized as a concern. As we announced yesterday, there will be 13 countries participating in this case representing all parts of the globe, in concern that we need to move forward with the regulatory systems that are based on science, in that this technology provides unique opportunities to developing countries in their development.

It's a concern to the scientific community who believes that the productivity gained, that can be gained through this technology to combat hunger, address the environment, food quality and conservation needs are essential for development.

Dr. [C.S.] Prakash of Tuskegee University presented Secretary Veneman and Ambassador Zoellick with a document signed by 3,200 scientists, including 20 Nobel Laureates, expounding on the importance of biotechnology and the needs that it can solve for humanity.

Dr. [Diran] Makinde, the Dean of the School of Agriculture in South Africa, also talked about the importance of this technology to Africa and how it can address many of the problems and challenges that they face in development in Africa. And I thought he made a very interesting observation when he talked -- when he was discussing the need to challenge Europe in that he described it as, "You cannot wake someone who is pretending to sleep." In our view, this is a very important issue in terms of bringing it to the forefront and getting it solved and getting it behind us as a challenge to the WTO system and to the development of this technology.

And this is a concern to developing countries, both as producers and consumers. These unjustified, misguided policies have created a problem that's spread throughout the world. This is not just an issue for Europe anymore. The most dramatic, of course, was when we saw that some countries were turning down food aid that you and I eat every day here in the United States and have for some time because of the misinformation or concerns about their access into the European market.

We've seen situations where countries have not pursued technologies that could help them -- whether it's in banana production or rice production -- to meet the needs of the developing world and expand their export opportunities because of concerns about these sorts of misguided policies.

The most dramatic or interesting presentation yesterday was from a Mr. [T.J.] Buthelezi, a small South African farmer who expounded on the benefits that he had personally seen as he's dealt with the challenges and productivity and use of chemicals in expanding his operations in his cotton farm in South Africa.

I thought one of the more interesting comments that he made was describing how he used to come home at the end of the season and after he sold his crop and tried to decide what things he was going to be able to pay -- whether it was his debts or the food or schools -- and he told us yesterday that after he used this technology, he could come home and after he paid all those things then discuss whether, what he was going to do with what was left. That's how important and personal it was to him.

So then, we see this as an important opportunity for providing a choice to farmers and consumers based on science and free from misinformation or misguided policies, and we look forward to pursuing this case in the hopes that this moratorium will be lifted and the rule of science in Europe will allow others around the world to follow a good example in the development of this technology and science-based regulations. Thank you.

MR. DENIG: Thank you very much. Our next speaker will be Under Secretary Alan Larson.

UNDER SECRETARY LARSON: Good afternoon. I'm going to add just a few points that are, I think, of particular importance to us at the State Department as we consider the importance of this issue in this case. The first point is that everyone in the world depends on the integrity of the WTO, and in particular the integrity of the food trade system and the scientific, rules-based application of WTO processes for the approval of foods.

Certainly Europe, itself, derives great benefit from having a rules-based scientific system with respect to trade and agricultural products. And so we think it's important to uphold the integrity of the WTO.

Second, as Ambassador Johnson pointed out, the policies in Europe have had an effect in slowing down the advance of this technology in other parts of the world. They haven't stopped it. In fact, this is a technology that is widely used in developing countries. Roughly a quarter of the acreage of biotech products in the world is in developing countries, but the policies in Europe have created some concerns and worries about market access that are genuinely troubling. So we think this case is important for those reasons. It is interesting to see how many countries associated themselves with our case, either as co-complainants or as supporters.

Third, we do believe that biotechnology is something that can be of immense value in additional developing countries, and we are working very actively to help adapt that technology to some of the specific needs that you see in developing countries, for example, drought-resistant forms of staple products in Africa -- things that will make farmers less dependent on either good weather or, in some cases, imported inputs like pesticides and raw materials that are difficult to bring into the countries. It's important to understand that biotech products are farmer-friendly products. They are products that help farmers farm more efficiently and without as many needs for imported inputs.

Finally, it's important to underscore some of the environmental benefits of biotech products. We have certainly seen that here in the United States where the use of biotechnology has helped us reduce the use of pesticides, has helped us use more "no-till" agriculture, which means there's less runoff of soil. So it has clearly had environmental benefits in the United States. But this is also true in developing countries. Increased productivity means you can get more crop for less land cultivation, reducing the pressure to have agriculture encroach on sensitive -- environmentally sensitive areas such as tropical forests.

It can also help in developing countries by reducing water requirements or reducing needs for pesticide. So for all of these reasons, we think that it is important to pursue this case. We welcome the fact that we've had so much support from other countries and again, our goal is simply to ensure compliance with the WTO rules on agricultural trade that are really part of the food security system on which we all depend.

Thank you.

MR. DENIG: Thank you very much. The next speaker is David Hegwood, the Counsel to the Secretary of Agriculture.

MR. HEGWOOD: Good afternoon. I wanted to speak for just a minute about some of the safety issues as well as why this case is of particular interest to the U.S. agriculture community.

The moratorium itself is not a safety issue. The U.S. regulatory system assures that the biotech crops that are approved for commercialization in this country are safe. We have a transparent, predictable, science-based regulatory system. Many other countries around the world have very similar systems: science-based systems that assess the risk: risk to the environment, potential risks to agriculture, as well as food safety risk and risk to animals from animal feeds.

Argentina and Canada, for example, have very robust regulatory systems. And it's not just the United States that's saying that there are no safety risks with these crops if they're appropriately regulated. Every credible scientific investigation undertaken confirms the safety of biotech crops. The WHO [World Health Organization] has reviewed these issues. The Scientific Academies of North America and Europe, the Third World Academy of Science, the UK [United Kingdom] House of Lords, the OECD [Organization for Economic Cooperation and Development], the Vatican, even the EU and the French Academy of Medicine have all declared that biotech foods are as safe as their conventional counterparts.

The EU, itself, has undertaken over 81 research projects related to biotech crops and a review of those projects by the European Commission demonstrates that these biotech crops did not present any greater risk than their conventional counterparts.

The 140 members of the Codex Commission, the Codex Alimentarius Commission, have developed a consensus on the appropriate procedures for evaluating the food safety of biotech crops, and the U.S. regulatory system is completely consistent with these guidelines.

Even the EU member-states and the Commission have not tried to make the use
-- the case that the moratorium is based on safety concerns. First, when they changed the regulation from 90/220, which was the previous approval regulation, to 01/18, most of the changes, in fact almost all of the changes they made, were entirely procedural. They changed deadlines for decisions, for example. They did not change the scientific basis for a safety assessment. In changing from 90/220 to 01/18 was the first excuse they gave for imposing the moratorium.

And then the second excuse they gave was having to impose the moratorium while they put in place traceability and labeling regulations. And again, they have not -- the EU has never tried to make the case that traceability and labeling is about food safety or about environmental safety. It's a consumer information issue, which they readily acknowledge. So the issue here is not one of safety. The issue, for us, is one of following the WTO rules.

This technology is critically important to U.S. agriculture. For many of the same reasons that Ambassador Larson outlined that it's important for farmers around the world, U.S. agriculture is looking to this technology to help us increase productivity using fewer pesticides, reducing pollution, allowing us to use better conservation practices, reducing soil erosion. And it also helps -- this technology -- by increasing agricultural productivity, it helps secure the long-term economic prospects for America's farmers and ranchers.

This case is about two issues of extreme importance to American agriculture. One is securing growing export markets and the second is increasing productivity. And so we -- the agriculture community is intensely interested in this case and the outcome and very supportive of what we -- of the step we took yesterday.

Thank you.

MR. DENIG: Thank you very much. Our next speaker is John Veroneau, the General Counsel to the Trade Representative.

MR. VERONEAU: Good afternoon. I won't repeat the statements of my colleagues on the importance of biotechnology and the harm posed by the moratorium, and nor will I lay out for you the details of our case. The essence of it is, essentially, that the moratorium is a measure, an SPS [sanitary and phytosanitary] measure, and as such, must be science-based. There has been no risk assessment done and it is not science-based, and therefore we think there is an extremely strong case here that it is a violation of the SPS agreement.

The next steps are that we'll be working with our -- with the other countries supporting this case to arrange for consultations with the EU within the next 30 days; and absent satisfactory conclusion of those consultations, we will proceed to request a panel on this matter.

Lastly, and the last point I'd like to make is there were some suggestions yesterday that this was an antagonistic move by the U.S., and I would submit that the WTO dispute settlement process is in place for countries to avail themselves. The Europeans have availed themselves of this process, as have we, and most recently the EU brought a case against Australia on SPS measures. So this suggests to us that, you know, there is not a moratorium on bringing SPS disputes in the proper forum.

Thanks very much.

MR. DENIG: Thank you very much. I would like to invite the four of you to come up to the podium area and we'll be glad to take your questions. We would ask that you please use the microphone and identify yourself and your news organization.

QUESTION: My name is Arthur Landwehr. I am with the German Public Radio in Washington. You were talking about consumer choices, and my question is: Does the U.S. still oppose labeling genetically modified food as such? And if this is the case, why is that the case? Why are you opposing it and not giving consumers a choice by just looking at the label?

MR. HEGWOOD: Well, this case is about the moratorium, which is a moratorium on the approvals procedures, which is the scientific evaluation process. It's not about labeling it or traceability. The U.S. position on labeling, which is well known, has not changed. We don't anticipate it changing as a result of this. We do not oppose consumer choice. In fact, we think consumers should be given choices in the marketplace, and -- but this case is about the moratorium, and so that's what we would like to keep the focus on.

UNDER SECRETARY LARSON: If I could just add one comment on your question, you know, here in the United States consumers do have a choice, unlike the situation in Europe. In other words, through the organic food system that is overseen by the Department of Agriculture, those Americans, who, notwithstanding the fact that the biotech products on the market have been deemed to be safe -- safe or safer than their conventional counterparts -- can, if they so choose, buy organic. And organic is defined to include biotech-free. The situation that we have in Europe is that consumers don't have a choice because of the moratorium that Mr. Hegwood was just referring to.

MR. DENIG: We'll take the gentleman in the blue shirt in the back there.

QUESTION: Mark Draden from Bloomberg -- if I could just follow up. The EU idea of how to change this, the ban, is to go with the traceability in labeling, which would have mandatory labeling, which is much different than the organic labeling we have in the U.S. Is that something that we, then, oppose? Is that what you're saying today?

UNDER SECRETARY LARSON: What we're saying is that we are bringing a case against the moratorium. The moratorium involves the -- basically, the refusal to use established procedures to process applications for new biotech varieties. And that is what we are challenging in this case.

MR. DENIG: I'd like to take the gentleman in the right seat.

QUESTION: Yes, this is Nestor Iqueda, an AP reporter for Latin America. And it's a question for Mr. Larson. And when Ambassador Zoellick made the announcement yesterday, he was flanked by 12 ambassadors from foreign countries. Eight of those 12 ambassadors were from Latin America. And how would you explain this massive presence of Latin America around the U.S. position?

UNDER SECRETARY LARSON: I think it's very simple. Many countries in our hemisphere are very interested and depend very much on agriculture and agricultural exports for their economic health. And any country that depends on agriculture and agricultural exports has to be concerned to make sure that the rules of international trade applying to those products are respected. And we have found that this concern is shared all over the world among countries that are interested in agriculture and involved in agriculture exports. I think it's a very simple explanation.

MR. DENIG: The lady up front here. Just a minute. Give your microphone to the lady up front.

QUESTION: Eolith Grunwalol, Austria Press Agency. Austria is one of the countries with the moratorium. What do you -- and this is because the population is a great majority against biotech food, which is in every poll you can see this. So their government has acted because of the will of the population, like in the other countries with the moratorium. And they -- in all the polls, they say they won't accept biotech food.

What do you say to these governments, especially with the moratorium? How do they -- what should they do with their population when the strong will is so much against it, like 80 -- like more than 90 percent?

UNDER SECRETARY LARSON: They should give them a choice.

MR. DENIG: Over here, please. The microphone is behind you.

QUESTION: Tatiana Santos from Brasilia newspaper Valor Economico.

I would like to know which would be the attitude of U.S. towards Brazil since the biotech crops have been considered illegal by the courts in Brazil and we may, from the next year on, it will not be allowed to grow these crops?

UNDER SECRETARY LARSON: Brazil is one of the largest grow -- producers of biotech products in the world. The legal situation is something that you may be more informed on than I am, but there has been a longstanding court case and -- but I think the important point is that Brazilian farmers, particularly in the south, have already voted on biotech, and they have seen the advantages that it offers in terms of productivity and decreased requirements for pesticides and herbicides, and they are using biotech soybeans in very, very large quantities.

QUESTION: But the responsibility (inaudible) from next year will not be able to grow these crops any more.

UNDER SECRETARY LARSON: Well, I think, let's wait and see what develops in Brazil over the course of the next year.

MR. DENIG: In the way back again.

QUESTION: Arthur Landwehr from German Public Radio again. I would like to follow up on the labeling thing because when we are reporting from here, we are reporting to future consumers of these products, so they need to know what's coming up for them. So I would like to start with a what-if question. So, what if the European Union came up and would say if we put a label on food that says this food was made with genetically modified organisms, would you, in that case, the moratorium would be ended. Would that be OK with the United States, or would you oppose a label saying this food was made with genetically modified organisms?

UNDER SECRETARY LARSON: First of all, we don't answer what-if questions. Nevertheless, I think I could offer a couple of comments, and Mr. Hegwood may be in a position to do so as well.

In any type of regulatory scheme, the details can determine whether it is something that is designed to inform consumers or designed to cut off or disrupt trade. And when you get into the sort of hypo -- the reason I can't and won't answer in any detail a hypothetical question is because you cannot tell from the way you posed the question is whether this is such a hypothetical regime would be set up in a way that would establish tolerances and requirements that would be, in practice, impossible to comply with.

And, you know, this derives from the fact that it is impossible to -- it is impossible to have a situation where you can achieve 100 percent uniformity in a product, and a lot of the discussions about labeling get down into details like tolerances, adventitious presence -- something that's way beyond the scope of this particular session.

MR. DENIG: The gentleman here. Sir, the microphone is behind you.

QUESTION: Doug Palmer with Reuters. But I'm afraid it's just another question on labeling and traceability. I just am so (inaudible) by your comment that if they came up with a labeling and traceability scheme that made it impractical for U.S. exporters to supply the European market, I mean, would you challenge such a scheme as that, one that made it impractical for U.S. exporters to supply the market?

UNDER SECRETARY LARSON: Let's solve one problem at a time. All right?

QUESTION: El Bashir from Sudan. Would you label this feud between Europe and the United States as scientific, political or commercial? It's one side of it, but the other side is the farmers among the rich or users and how about the, where do the poor countries like in Africa stand in this fight here?

UNDER SECRETARY LARSON: Let me answer the second part of your question and then I may want to characterize a little more the nature of the, sort of the legal dispute, but I think that it's very clear that all countries that are concerned about the integrity of the international trading system with respect to agriculture are concerned with this case. The fact that many countries that are from the developing world have joined us in this case, is, I think, an important signal that the concern that we have is widely shared.

Just to take Africa for a moment -- countries such as South Africa are growing biotech cotton right now. There's a tremendous amount of interest throughout southern and eastern Africa in developing new types of biotech products that are adapted to the climate and conditions there.

As Ambassador Johnson said before he had to leave, one of our serious concerns last year was that in the midst of a very severe food security crisis, a famine or a near-famine in southern Africa, some countries said that they were reluctant to accept food that every American eats every day for fear that if it were planted instead of consumed, it might become part of their export crop and therefore be refused by the European Union.

Now, I don't know if those concerns are valid, but they were certainly concerns that were sincerely felt. So for -- these are the reasons why we think that African countries have a stake in this case and that this isn't a case of dispute between two relatively well-to-do members of the WTO. It's a case that really concerns all of us.

MR. VERONEAU: And just in response to your first question, I would say this is not a political issue, this is a legal case that has important commercial ramifications, and it is premised upon the lack of scientific basis for the measure.

QUESTION: Andrei Sitov from TASS from Russia. Is accepting biotech products one of the conditions that you set before Russia for joining the WTO? And if so, I know our agriculture minister was recently for talks. Was the subject discussed? What did he tell you?

UNDER SECRETARY LARSON: Well, certainly biotech was discussed -- maybe with Secretary Veneman. I know in the conversation that the Deputy Prime Minister and Agriculture minister had with me, he expressed his interest in biotechnology as something that could be an important part of renewing and modernizing agriculture in Russia. So, I mean, it did not come up in any way, shape or form in the context of the discussion we had about Russia's accession to the WTO, which is something that we very strongly support. It came up in the context of the ways in which we could work together to help Russia build an even stronger agricultural base for itself.

MR. HEGWOOD: Just to add to that, the Secretary and Deputy Prime Minister Gordeyev had some very productive discussions on the subject of biotechnology and those discussions were largely centered around how we could increase our cooperation in this area, recognizing that Russia has a very active and able scientific community and has a great interest in developing this technology. And as far as the WTO accession, we did not discuss biotech in the context of the WTO accession, but you know, the principal consideration for WTO accession is the willingness to follow the WTO rules, including the rules of the SPS agreements.

QUESTION: Jyri Raivio, Finland. This is a very old issue as far as I remember. Why did you choose to proceed right now? Do the somewhat frosty transatlantic relations play any role in the timing of this issue?

UNDER SECRETARY LARSON: Well, I think we've touched on that, but just to amplify a little bit more: This is an issue that we've been trying to resolve for at least four or five years. I was personally involved in conversations in the late 1990s when senior officials from Europe came and said, "We just need more time." And there was even a proposal to set up a consultative forum that would bring together scientific experts, and maybe that would help.

Well, we did that. We had the consultative forum. It didn't help. There have been other indications that Europe was going to try to move forward. And each time, the hope for a result didn't happen. And so, you know, a time comes when -- after exercising restraint and being patient that it's just necessary to say to a trading partner that it's important to comply with the rules and we're going to bring this case.

One of the factors, one of the factors for wanting to move now has been our growing concern about the effects that the moratorium was having around the world. As I said, biotechnology production is expanding around the world, so countries are seeing the benefits and wanting to move forward with it. But it, it's happening at a slower rate, I believe, than it otherwise would have because of these concerns that countries have about whether the products that they produce will ultimately be accepted in Europe. And this growing concern that we have is a factor in the timing.

Frankly, I mean, we've waited a long, long time and finally it just got to the point that we felt we needed to proceed.

MR.VERONEAU: If I could just add to that, I mean, I think from Ambassador Zoellick's perspective, I think it was a trip he took last year to Africa that kind of convinced him that this was -- that this moratorium was putting a cloud over, over the technology and putting a question in peoples' minds, "Well, is the EU moratorium based upon science and are there health risks or environmental risks associated with the technology?" And frankly, this case, I think, will demonstrate that this moratorium is not based on any science. And that is, that, I think, for Ambassador Zoellick, was a compelling part of moving him to feel that we need to move ahead with the case.

QUESTION: Lambros Papantonious of the Greek Daily Athens. Mr. Secretary, how do you respond to the EU condition from Russia yesterday that your action to WTO is not legal due to the point it is baseless and unfounded?

UNDER SECRETARY LARSON: Well, first of all, Mr. Veroneau made a very, very, very, very strong case that this is a case that is so solidly grounded that we are very confident that we will succeed. If the European position is right, we'll find out very quickly as a result of the -- the consultations and the panel that will follow. But I think it will be important for Europe to proceed with the work that's now under way to try to make progress on the moratorium. I hope that the Commission and the member states will keep trying to correct this situation. But in the meantime, if they do so, we will look forward to having consultations with them, and we'll hear the reasons why they think what they're doing is correct.

QUESTION: What progress do you expect? What progress do you expect for the European Union on this issue?

UNDER SECRETARY LARSON: Well, I think we would certainly be pleased if the European Union were to move forward and end this moratorium, and start processing applications of new biotechnology products. I mean, we are -- we are not interested in a dispute. We are interested in resolving disputes. And so if, through the process of initiating this call for consultations and engaging with the Europeans one more time, they were to be able to take the measures they have said for several years that they want to take, and that is to end this moratorium on the processing of new biotech applications, we'd be very pleased.

MR. DENIG: Gentleman in the blue shirt, in the middle.

QUESTION: Rik Winkel, Amsterdam. Do you have an estimate of the damage American exporters are suffering because of this moratorium?

MR. VERONEAU: The estimates that have been given heretofore have been in the several hundred million dollars range per year. But as Ambassador Zoellick was asked this question yesterday -- and as I think he rightly pointed out, this issue goes well beyond the identifiable and quantifiable trade damages to U.S. exports right now. There are many, many countries in the world that are not proceeding with biotechnology because of this moratorium and concerns that they will not be able to market their products in the European market.

There was -- at the press conference yesterday, there was testimony to the effect of in South Africa, South African corn was not biotech. Corn was not being sold in Namibia because it was being fed in the Namibian beef; it was then to be exported to Europe. I mean, it is -- the global ramifications of this moratorium go well beyond the economic loss to U.S. interests at this point. And that is why you saw yesterday this was not just the U.S. raising this concern about the moratorium, it was 12 countries.

MR. DENIG: (Inaudible.)

QUESTION: Thanks, I have two questions. Well, one I think you can answer fairly quickly which is: You know, if EU does drop the moratorium and goes ahead with approvals, and I assume that this case would not go forward, and you would just make a decision on whether to challenge the traceability and labeling provisions, based on whatever -- whatever details they happen to be.

And then, secondly, you talked about the importance of trading partners, complying with WTO rules. In the steel case, the steel companies are saying very vocally that the steel tariff should stay on for the entire three years, no matter, you know, what the WTO rules on that issue. So I just wondered if you would address that point, assuming that we will lose the case, the steel case, are we going to take off our -- are we going to take off our steel tariffs?

MR. HEGWOOD: I think I'll refrain from answering the steel question today. As far as the proceeding with the dispute if the moratorium were, in fact, lifted under the WTO -- you know, our expectation is -- as Secretary Larson has said, our goal here is compliance with the rules. Under the WTO rules, I should note that once a panel is established, there is precedent for moving ahead asking the panel to reach a final decision for precedential purposes.

So, noting that, our expectation is, our goal here is to get compliance with the SPS and other WTO rules.

QUESTION: The UN (inaudible)?

UNDER SECRETARY LARSON: No, I said, once under the WTO rules, I noted that you are -- it is -- there is precedent for moving ahead. If the moratorium were lifted after a panel is established, there is precedent for continuing to ask the panel to reach its decision in the matter. I note that I am not saying today that that is a decision that we will do that. That's something that we'll decide if and when we get to that point.

MR. DENIG: Yes.

QUESTION: Yes, how do you -- how do you respond to the Europeans who say that there is no moratorium, who say that 18 GMOs [genetically modified organisms] have been accepted and many more are in the pipeline, that the process is only a bit on the slow side, but there is no moratorium? It's my understanding that their claim is exactly that.

UNDER SECRETARY LARSON: Well, on the 12th of May, the Commissioner of the European Union for Health and Food Safety said that, I believe, by the time this case reaches the panel, the moratorium will be history. So he apparently thought it was existing on the 12th of May, or he wouldn't have made that statement.

But more important than that particular quote is the fact that I have not heard until yesterday any EU official assert that there was not a moratorium. We have had constant references to the existence of the moratorium from member state leaders and members of the Commission. It is acknowledged that there has been an existence of a moratorium. There have not been new biotechnology applications approved in several years. So, you know, all you have to do is look at the record of what has been going on in Europe over the last five years and you can -- you can judge for yourself.

QUESTION: Secretary Larson, how serious have you taken into consideration that this legal dispute between the European Union and United States are for the products are very detrimental to the public health?

MR. HEGMANN: Well, they are not.

QUESTION: I'm sorry. This specific product are very detrimental to the public health, and I was wondering how seriously you are taking this?

UNDER SECRETARY LARSON: They are not detrimental to the public health.

QUESTION: (Inaudible.) Based on what you are saying this?

UNDER SECRETARY LARSON: Why don't come up with something --

(Laughter.)

MR. DENIG: To you, sir.

UNDER SECRETARY LARSON: Based on 81 studies by the -- conduct -- or financed by the European Commission, for one thing, based on the U.S. regulatory approval process, which is based on science, based on any number of scientific -- international scientific organizations that have looked at this, I mean, there was a very long list of organizations that have looked at the public health issues, as well as the environmental health issues.

And, you know, even Commission officials have said that there is no scientific evidence that these products, if properly regulated, are not safe. The French Academy of Medicine, most recently, made exactly that same determination, based on the analysis that it has done. So I guess the question is: Where is the evidence that these products are not safe?

UNDER SECRETARY LARSON: And just for anyone that wishes, USTR [Office of the U.S. Trade Representative] has put on its website, I believe, and has a fact sheet that sets out many of these quotes and comments that Mr. Hegwood was talking about. So you don't need to take our word for it. Check the record and the record is available on the website.

MR. HEGWOOD: And I would just -- I would just add that a country that imposes an SPS measure has the burden to demonstrate that it is based on science. It is not the burden of us to demonstrate that it's -- that -- it's the burden on EU to demonstrate that biotech foods are unsafe, not for us to prove that they are safe, notwithstanding the fact that there are many studies demonstrating that they are safe. The French Academy of Medicine most recently made exactly that same determination based on the analysis that it has done. So I guess the question is where is the evidence that these products are not safe?

UNDER SECRETARY LARSON: And just for anyone that wishes, USTR has put on its website, it even has a FAQ [frequently asked questions] sheet that sets out many of these quotes and comments that Mr. Hegwood was talking about. So you don't need to take our word for it. Check the record, and the record is available on the website.

MR. HEGWOOD: And I would just add that a country that imposes an SPS measure has the burden to demonstrate that it is based on science. It is not the burden of us to demonstrate that it's -- it's the burden on the EU to demonstrate that biotech foods are unsafe, not for us to prove that they are safe notwithstanding the fact that there are many studies demonstrating that they are safe.

UNDER SECRETARY LARSON: I'll just contain myself to one -- one of the many quotes here. And this is an official communication from the European Union to the U.S. Speaker of the House, where they said that biotech corn examined by its -- that is, the EU's -- scientific committees is as safe as conventional corn. And you can go through the entire list of studies including the French -- the French Academy of Medicine, several statements by the Commission of the European Union. It's a very, very clear record. These foods are not -- there is not a contest -- there is not a contention being made by European officials that these foods are unsafe, unsafe to eat. It simply is not part of the representations that they are making.

QUESTION: Andrei Sitov again, at least for clarification. To the best of your knowledge, does Russia now buy biotech foods from America?

MR. HEGWOOD: The Russian regulations are in the process of changing right now. Russia has, in the past, bought biotech foods from the United States and we expect that once the new Russian regulations are in place that they will continue to be approved.

MR. DENIG: OK, the lady right here in the middle.

QUESTION: I have two follow-up questions, one to the safety issue. You mentioned the status, but as far as I remember, for instance, some months ago there was an article that genetically changed or engineered pigs came to the food chain because somebody at a university sold them to a company here. How many of these cases were by human errors or human crimes in this case, somehow against the regulations made this technology, in the end, not according to regulations were unsafe?

And the second question is a follow-up to the economic side. Could you put into perspective maybe the several million-dollar range of damage to the U.S. exports, food exports to Europe, to the total number how much? What's the percentage? And do you fear a backfiring that this issue might harm the U.S. food exports to Europe in general when the consumers say, like now, as a protest we don't buy U.S. food if possible?

MR. HEGWOOD: Well, with respect to the transgenic pigs that you referred to, there have been several instances where we have had regulatory problems. We have caught those. We have dealt with them. There is no single documented case that any consumer in the United States or anywhere else in the world has ever suffered any adverse effects from eating biotech foods.

In the cases where we have had regulatory problems, we have managed to contain the problems. And in the case of the pigs, FDA [Food and Drug Administration] declared that there was no food safety concerns with those pigs themselves. So we have complete confidence in our regulatory system. We are constantly reviewing our system to make sure that it keeps up with the rapid changes in the technology.

And with respect to the economic issue, I'm not sure exactly what our total level of trade with the EU is. The EU is certainly one of our largest agricultural partners. Our bilateral trade is very significant. But $200 million in U.S. corn exports is also very significant for U.S. corn farmers, so it's not an insignificant issue.

QUESTION: (Inaudible) do you feel a backfire?

MR. HEGWOOD: Well, a consumer boycott against U.S. products would be completely unjustified in this case.

UNDER SECRETARY LARSON: I would hope consumers would welcome the fact that this case could produce more choice. Earlier in the discussion, the emphasis of consumer choice was raised, and we would be the first to say that we want consumers to be able to have a choice. They are not being given that choice now. If the moratorium is ended, there is the prospect that they could have a choice.

MR. DENIG: The last question to the gentleman right here.

QUESTION: Well, my name is M. Yamamura, Japan Broadcasting Corporation. With your explanation today, I understand the importance of GMO technologies the safety of GMO. I believe you think you are 100 percent sure about the safety of GMO. But I think the European choice that they don't want to eat GMO until they're 100 percent sure about the safety of GMO.

So, under the circumstances, how could you force them to eat what they don't like to eat? Or do you think the European government may misrepresent the European people, who actually really don't care about the safety of GMO?

UNDER SECRETARY LARSON: Well, there are some biotech or GMO products that are consumed in Europe, and we do believe that, confronted with a choice, consumers make intelligent judgments that are right for them. And we are perfectly happy to have people walk into a supermarket and make the choice of what products they want to eat.

What is not right, either in terms of compliance with the WTO rules or just good public policy is to allow a few people in a country to make the decision for everyone else. And that is what happens when you have a moratorium. I think it is important to emphasize at a more general level one of the points that Mr. Hegwood has been making. The United States is totally committed to the safety of food products that reach our consumers, as well as the food products that are sent to the rest of the world. We have a very, very strong record. One of the reasons we have a strong record is that we have food safety review processes that are scientific and not politicized.

Europe has had a lot of problems with food safety, not because of biotechnology, which, in the words of the -- here the French Academy of Medicine, there has never been a health problem, there has never been a health problem associated with biotech. But in Europe, there have been health problems associated with BSE or Mad Cow Disease, with dioxins in Belgium, and all sorts of problems of this sort.

So the issue is not concern about safety. I think we have demonstrated by our track record that we have not only concern about safety but we have a system that has been producing safe food products.

We think that the absence of an effective scientific-grounded system in Europe not only is having adverse effects on our exporters, adverse effects on the interests of developing countries, but it's also failing to produce food safety for European consumers.

So, again, this is a very important case and we appreciate the opportunity to discuss with you the reasons why we're bringing it.

MR. DENIG: Thank you very much, gentlemen. Thank you, ladies and gentlemen.