U.S. farmers urge sanctions against EU's GM crop ban

WASHINGTON (Reuters) - The largest U.S. farm group has urged the Obama administration to begin steps towards imposing sanctions on the European Union in a longrunning dispute over the EU's treatment of genetically modified crops.

The American Farm Bureau Federation, in comments given to the administration on Monday, complained the EU still has not complied with a 2006 World Trade Organization ruling against its "de facto" moratorium on approving new varieties of biotech crops for sale in the 27-nation bloc.

"The inability of the EU to operate a timely and predictable regulatory process ended U.S. corn exports (to the EU) in 1998 and has reduced corn byproducts substantially," the Farm Bureau said in its recommendations for President Barack Obama's National Export Initiative.

"If the EU does not immediately begin to make timely, science-based regulatory decisions on pending and future applications, soybean exports also are at serious risk," the farm group said.

"USTR should initiate a retaliation proceeding against the EU to force compliance with the WTO ruling on GMOs (genetically-modified organisms)," the group said.

The request comes just a few days before U.S. Trade Representative Ron Kirk is due to give a speech in Pittsburgh on the Obama administration's efforts to ensure other countries live up to trade agreements.

U.S. farmers have widely embraced genetically modified crops, which offer higher yields with reduced pesticides. But the technology is viewed with suspicion by many European consumers because of perceived safety concerns.

The United States first challenged the EU's de facto moratorium and other policies that impeded sales of U.S. genetically modified crops at the WTO in 2003 and was joined by Canada and Argentina.

The WTO's 2006 ruling largely backed the complaint brought by the three countries, who argued the EU was failing to apply its own scientific approval procedures to GM products.

Since then, the United States has agreed at least twice to give the EU more time to comply with the ruling.

Washington also began steps in January 2008 to retaliate against the European Union, but later suspended that action.

The Farm Bureau initially supported the U.S. government decision not to retaliate in the case in the hope the two sides would find a way to "normalize" trade in biotech crops.

Now the group said it has changed its mind.

"U.S. agriculture has suffered substantial damage from the EU's failure to abide by its WTO commitments and this damage will continue to grow as long as the EU does not comply with the WTO ruling," the Farm Bureau said.

(Reporting by Doug Palmer; Editing by Sandra Maler and Cynthia Osterman)