EU: August 13, 1999

   BRUSSELS - The United States has warned of future trade strife with
   the European Union over biotechnology, accusing European lawmakers of
   "demagoguery" in their attitude to genetically modified organisms. 

   Richard Morningstar, newly-appointed United States ambassador to the
   EU, said the EU's block on new GMOs would cost U.S. exporters over
   $200 million in lost corn sales this year.

   "Until the EU can credibly separate science-based risk assessment and
   regulations from the political process, the outlook for resolution of
   this issue is bleak," Morningstar wrote in his biannual "Letter from
   Brussels."

   The warning comes after EU environment ministers agreed in June to a
   de facto moratorium on approving new GMOs, amid growing public
   distrust about the safety of food derived from biotechnology.

   Washington is becoming increasingly frustrated at the continuing EU
   block on imports of GM commodities developed by U.S. life sciences
   companies and grown by American farmers. Some fear the disagreement
   over GMOs could dwarf recent trade disputes over beef and bananas.

   "Public debate all too often is dominated by scare stories and
   nightmare scenarios without a scientific basis," Morningstar wrote.

   "The failure to approve new varieties...shows politics and demagoguery
   have completely taken over the regulatory process."

   Morningstar welcomed an EU decision to allow GMO seeds to be evaluated
   eventually by agricultural rather than environmental committees.

   Biotechnology firms say environment ministries in the EU states, which
   make the final decisions on approving GMOs, are overly influenced by
   environmental lobbies opposed to GM technology.

   The European Commission said last week it was considering stripping
   its environment department of responsibility for GMOs.

   Morningstar also warned the EU against overreacting to the recent
   discovery of cancer-causing dioxins in animal feed. The crisis has led
   to calls for certain ingredients which are allowed in the United
   States to be banned from feed in Europe.

   "Hasty EU actions in this area risk becoming another trade flash
   point," he wrote, adding there could be similar problems if the EU
   decides to ban meat from countries which continue to allow the use of
   antibiotics in animal feed.

   Morningstar cautioned that other draft legislation in the pipeline in
   Europe could also break World Tarde Organisation rules, including
   plans to reduce hazardous waste from old electrical and electronic
   equipment.

   He also attacked the EU's stance in international negotiations on
   cutting emissions of the gases believed to cause the "greenhouse
   effect."

   But there were bright spots amid the gloom.

   Morningstar said he believed the transatlantic relationship was
   generally "close and cordial" despite these problems, and said he
   hoped the two sides could reach final agreement this autumn on data
   privacy.

   REUTERS NEWS SERVICE