UPDATE 2-USTR Schwab urges EU to hasten biotech approvals

By Missy Ryan
WASHINGTON, Jan 29 (Reuters) - U.S. Trade Representative Susan Schwab on Tuesday pledged to watch for proof that the European Union is accelerating approval of new biotech products and ending a delay that has been costly to U.S. exporters.

Schwab declined to specify how long she might be willing to wait before she would ask the World Trade Organization to probe whether the EU is in violation of its ruling that found the 27-member bloc dragged its feet for years in approving new genetically modified food and crops.
"We have been tremendously frustrated at the lack of progress on the biotechnology issue," Schwab, who discussed the issue last week with European officials, told reporters.
"We need to see some progress," she said.

Earlier this month, Schwab's office announced it would give the EU more time to speed up its approval process and comply with the ruling.

The case has complicated trans-Atlantic ties for years, stunting export opportunities for U.S. farmers, who now rely on biotechnology for a huge share of farm production.
GMO crops, designed to withstand weed-killing agents or to repel pests, are commonly used in the United States, but European consumers have resisted them.


That process could ultimately lead to trade retaliation.
"Basically, it will be up to Europe to determine when or if the panel is ever formed," said Russell Williams, a biotechnology expert at the American Farm Bureau Federation, the largest U.S. farm group.

The Bush administration also has begun soliciting input about which EU products might be targeted for trade sanctions if the situation deteriorates.
As the EU promises to make changes to its approval process, the outlook is complicated by France's recent decision to extend an effective ban on the sole genetically modified crop now grown there, despite EU approval of the crop.

"We've been discouraged by some backsliding that we've seen on the part of France," Schwab said. The crop is called MON 810, a maize developed by the U.S. firm Monsanto (MON.N: Quote, Profile, Research).

France is one of several countries with bans in place in Europe.

Sharon Bomer Lauritsen, executive vice president for the Biotechnology Industry Organization, said the EU had made minor steps forward, approving four GM products in October, but pointed to over 40 other products awaiting approval.
Canada and Argentina also have challenged the EU process for approving GM products.