On behalf of its 25,000 U.S. soybean producer-members, the American Soybean Association (ASA) is outraged by the conclusions adopted today by the European Commission on the trade impact European Union (EU) Traceability & Labeling laws for biotechnology-derived products have had on exports of U.S. agricultural products.

"The EU's biotech labeling and tracing rules have had a significant negative effect on U.S. exports of food and agricultural products to the EU," said ASA President Bob Metz, a soybean producer from West Browns Valley, S.D. "For the report to say that the rules have had a positive effect by providing relevant information, consumer choice and safety guarantees is nothing short of a whitewash and a betrayal of the very consumers the EU claims to care about. We are amazed that the Commission would write such fiction when market realities and trade numbers tell a very different story."

The EU first implemented mandatory labeling regulations in 1997, requiring foods that contain biotech ingredients to be labeled. Because EU consumers perceive biotech labels as health warnings, European food companies and dozens of major food manufacturers outside Europe who market their products in the EU, choose to reformulate their products or find new, non-U.S. sources of supply in order to avoid labeling their products as biotech.

For example, because soybean oil must be labeled, despite the fact that no detectable DNA from a biotech soybean is in the oil, EU processors moved away from U.S. soybeans. As a result, the value of U.S. exports of soybeans and soybean products fell by 65 percent between 1997, when the first biotech labeling rules for food went into effect, and 2004, from $2.5 billion to $874 million. Total U.S. exports of products falling within the scope of the EU regulations have dropped from $4.2 billion in 1996 to $1.6 billion in 2004.

"Most EU food companies have expressed their confidence in the safety of biotechnology," Metz said. "Nevertheless, they have made clear that they are doing everything possible to avoid having to put a biotech label on their products."

"The cost of complying with labeling and traceability rules drives up prices and makes U.S. producers of corn, soybeans and processed products less competitive," Metz said. "Unlike conventional trade barriers, labeling requirements rarely stop products at the border. Rather, they affect demand for imported products by causing food companies and feed compounders to reformulate their products or seek new sources of supply, and retailers to switch to food products that do not contain biotech ingredients."

The effect is even more evident when individual product categories are examined. Comparing U.S. exports to the EU between 1997 and 2004 for nine categories of processed products shows that exports of the five categories of products that are unlikely to contain biotech ingredients increased by an average of 46 percent over the period, while exports of the four categories most likely to contain biotech ingredients decreased by an average of 36 percent.

"U.S. farmers and food companies are losing hundreds of millions of dollars a year in lost sales due to the EU's trade-restrictive and non-science based biotech labeling and tracing rules," Metz concluded. "We believe the time has come for the United States Government to mount a WTO-challenge against these rules. Doing so would expose them for what they are - discriminatory trade barriers that have nothing to do with health or safety and that have actually decreased consumer choice."