Pascal Lamy
EU Trade Commissioner

European Commission Delegation
Washington, DC

March 4, 2003

TRANSCRIPT

Commissioner Lamy: A few words on this visit before I catch my plane in order to attend the Commission meeting tomorrow morning in Brussels. The purpose of this visit was, as usual, to check with the US administration and with Congress [on] the state of play of trade relations both bilaterally and multilaterally, plus [on] a number of regional negotiations with third countries we have in common. And it’s, as usual, checking with the main policy makers here what’s on our radar screens and how we can move the trade agenda forward.  

Of course, this time it happens within a challenging international environment—to use a diplomatic understatement—both because of the general economic situation and because of a clearly difficult geopolitical situation. I wanted to check whether my intention—which is to try and send a clear message of how much we care about this transatlantic trade relationship on this side—and whether a sort of EU policy we have in this respect—which is to enhance the quality of the multilateral trade system—and, given the Herculean responsibility that falls on the shoulders of the two big elephants, of the system we share. Starting from this consideration that we have a huge transatlantic trade and economic and investment relationship and that it is an asset which we definitely need to handle with great care.  

The main thing I will take back with me from these two days is that this view of how we should handle things is shared on this side of the Atlantic, and this is what I got from the meetings I had both with Zoellick, with Evans, with Snow, with Friedman on the Administration side and with the meetings I had on the Hill with Congress people and Senators. 

I think this translates into three main points: 

• The first one is sort of a “non-contamination” principle. We have to try and keep the transatlantic trade and economic relationship uncontaminated.
• The second—the first being a bit of a defensive—the second is more on the offensive side. I think we agree that we should work more closely together to push the multilateral agenda and to ensure that it meets and delivers on the expectations of developing countries. That’s the sort of more offensive, moving-forward agenda.
• And the third one is that on our bilateral disputes we need to go on doing cleaning up, whether it’s on the positive agenda—which we’ve launched at the summit last year and which we will be sort of taking stock of next June with the US/EU summit and to move on the resolution of a number of bilateral disputes—whether these disputes are already litigated; whether they are in course of litigation or whether they are not yet litigated.

A few points before I answer your questions: 

• On the Doha Development Agenda, of course, we spent quite a lot of time on agriculture. I told my interlocutors that we have moved on this issue because we need others to move too on this issue. And, particularly, our US friends who spend as much as we do on agricultural support and if we are to agree to further disciplines in Europe—which we are ready to do—we need the US to go in the same direction. We also need, both of us, to work harder on how we can make the agricultural part of the Round sort of more development-friendly—development being one of the priorities of this Round. And I have reminded my interlocutors that Europe is not only on the defensive agriculturally, we are also on the defensive notably on geographical indications (GIs), which is for our side a strong label to use it in these particular circumstances—a strong label for quality—and that if the European agricultural system is to move from less quantity and more quality in terms of farming means, GI’s are obviously of extreme importance.
• On industrial goods, we have a pretty similar agenda. We both are very ambitious and we both are of the view that developing countries’ concerns exist, even [if] in the way we can address them we’ve not yet sorted out bilaterally with the US.
• Same in services, where we both believe that services can now play an important role in terms of matching a number of development concerns. And if one wants to be convinced about this, just have a close look at the requests we get on both sides from a number of important developing countries.
• On the rules side of the agenda, I have re-explained and we’ve re-discussed the Singapore issue: investment, competition, trade facilitation plus, of course, the trade defense disciplines. And the view is progressing that addressing these issues is crucial if we really want to translate market access opportunities—trade opening in theory into real trade flows—hence contributing to increasing growth of jobs and reduction of poverty in many parts of this planet.
• On the bilateral side and notably the disputes which, of course, the media are much more interested with than the positives—we know that’s life—on this my message was pretty clear, and I had sort of made it clear here before I arrived—thanks to some of you. Cases are starting to pile up, and we need to seek compliance. And I don’t want a situation where, you know, we would have a sort of piling up/log jam of non-resolved issues after they have been litigated and notably because Congress would not move forward. My basic point with the Hill has been that it’s in the interest of the US to comply. The US is a key pillar of the WTO (World Trade Organization) systems. Disciplines of the WTO, including the dispute settlement machinery, are for the advantage and for the benefit of the US economy. And that’s apart from the piece we see, which is where the disputes of the machinery is actioned by either of us or third countries. There is a whole bunch of issues which does not appear. [They] are things which we sort of pre-comply within our own domestic decision machineries because of the existence of this dispute settlement machinery which, of course, is very important. And we know that all disciplines are important when they are not actioned.
• I heard in my meetings with Congress this morning that some movement is to be expected shortly on cases which we care about: 1916 Irish Music Act. I think this movement in the right direction, if confirmed, is good news and we, of course, will be following this closely in terms of the wording of these pieces of legislation to make sure that it really addresses the compliance problem. On Foreign Sales Corporations (FSCs), I also had quite a lot of discussions in order to see when and how the [inaudible] of legislation—which I think the intention of which—now in the system will move forward, in order to adjust my own system of leveraging compliance, either by persuasion, by discussion or by other means if other means of compliance become necessary at some stage in order to focus minds and create a sort of sense that this has to be done. That’s where we are and I am now, after this summing up, ready to answer questions from your side.

Washington Trade Daily: [Inaudible] a number of disputes/problems/initiatives with the United States. After your trip here, can you tell us something in terms of what has moved forward [inaudible] Irish Music 1916 [whether Lamy sees progress toward compliance in other cases that are piling up]? 

Commissioner Lamy: Yes, I mean, that’s true; and if I sort of have to come back next week for two more, I’ll do it. And as we probably have eight of them on the list presently, it can be sorted out in a month. And fine, I’m even ready to spend a few weekends here if that’s necessary. I think and the sense is that, as I said, at the end of the day, doing this is caring for a system which is good for the US economy, for the US industry and that the sort of increasing record of compliance is medium-term—what we all should do, and especially those of us who have a big trade [inaudible] with the rest of the world. I haven’t looked at this or into the details of that yet, but I think I will come back to Brussels with some sense that, yes, these things are being addressed.  

Journalist [inaudible]:  Could you just elaborate on that? When you say you haven’t looked at the details of…which one? 

Commissioner Lamy: The repeal of the 1916 legislation and the exact terms of the appropriations for the Irish Music compensation. 

Journalist [inaudible]: Switching topics just a little bit to the FSC: you met with Chairman Thomas, and I was wondering if he gave you at all any sense of timeline and any sense of outline of what he’s doing and if it sounded reasonable to you, or do you think it may end up being another law that would be unacceptable to the World Trade’s rules? 

Commissioner Lamy: The sense I got from Chairman Thomas is the same I got at the end of last year. He is committed to solving this. The piece of legislation which he tabled at the end of last year met with WTO requirements in terms of repealing the export subsidy content of FSC/ETI, and that’s my only purpose. I, frankly speaking, don’t want to spend a lot of time on the US tax problem. It’s not my problem. It’s a problem for US legislators, for US sovereignty, for US corporations, for your tax payers and for your citizens. My only intrusion in this system is when there is an export subsidy. There is an export subsidy, and we’ve got to get rid of this. And I repeat, the PEC table at the end of last year—after what the President of the US said, after what the Administration said—was fine in terms of its compliance with the WTO ruling. Now we all know that the thing has to restart because there is a new Congress. And we will be watching this very carefully but, I mean, his determination seems unabated.

Hill newspaper: I have a tabled list of the products that make up the $4 billion in tariffs that you could put on US goods and services. I’m wondering—if there will come a time when you will do that—how you will determine which products the tariffs will be placed on and whether you’ll place them on the products in a way to leverage political advantage by targeting, say, products in states that are important to the presidential election or targeting companies in order to get the administration to sign on to the Kyoto agreement? 

Commissioner Lamy: The $4 billion dollar list—4-billion-dollar question—is presently being addressed within the European Union. We have a whole machinery of internal consultations, a bit like what you have here. And, when you table a list like this, you’ve got to consult thoroughly with industry, with member states, with the European Parliament and that’s being done. I have last week tabled a list which is now being looked at by my authorizing environment. And, once we have finished the consultations on this, we will then move to the next step, which is—with this list agreed, which will be then the EU list—go to WTO arbitration for clearance, which shouldn’t be a problem given what the procedure is about. And then the list will be ready, ready to use if necessary, which I hope won’t be necessary. The way we’ve devised it, of course, we’ve tried to put together a clever list and not a stupid list. What’s a clever list? A clever list is a list which leverages as much as possible compliance on this [US] side without hurting EU interests on the other side. We know that putting tariffs is not that intelligent, in terms of enhancing trade flows. And, if we have one day to put tariffs, we will do it cleverly. 

Targeting is not the name of the game, even if the experience of the past has shown that a list like this gets more attention if, here and there, people care about it. I mean, when the US put French Roquefort on the list previously, it probably wasn’t because of the extreme importance of French Roquefort for the US economy. I am not aware of that. When the US started targeting Shetland, which is not a French product but a European product from somewhere else in Europe, it probably was not because of the vast herds of sheep in the US who produce extremely good quality Shetland wool. So, I mean, that’s the rule of the game; and I don’t even want to go back to the chicken or pasta war of the past. So there is nothing new in that. We all try to be clever. We sometimes are clever, sometimes not clever; but trying to be clever is something we all are entitled to do. 

Whether it has anything to do with the Kyoto Protocol, obviously the answer is, no. The European Union is not enough of a hard power to make this sort of linkage. And even if we were more of a hard power, which I personally wish, I am not sure we would do it because I don’t think it’s good for [the] understanding of these issues by the citizens. The US pulled out from the Kyoto Protocol. It’s a solemn decision by the US. We regret it. We think that, medium- and long-term, it’s not good news; but we are not going to use trade sanctions or trade restrictions to push the US into a compliance which they are, vis-à-vis international law, entirely legally founded not to step in. So that’s not the way we work.  

Journalist [inaudible]: How far do you see the March 31 agricultural deadline, in terms of the overall success of the [inaudible] negotiations, and how important [inaudible] the concessions by the major trading partners—the US and the EU—on anti-dumping as to the overall success of the negotiations? 

Commissioner Lamy: We have a deadline for modalities in agriculture for the 31st of March, as by the way we have a number of other deadlines on other issues. And it all depends, and I reckon it’s a terribly technical topic, [on] what you call modalities. We also have a deadline for Cancun on modalities on separations, for instance. We have a deadline in springtime for agreeing on modalities on industrial tariffs. So, [the issue of] modalities is starting from a program of negotiation. Modalities is a step you need to do in order to frame the negotiations so that big blocks of it and sort of a range of numbers, which we are looking for, is there—is a basic consensus on that. And, of course, in agriculture we already have a sort of a pre-framing in the negotiation we agreed in Doha: reduction of trade distorting domestic support, reduction of export subsidies, increasing market access. And the question is, Now how can we sort of make this more precise without, of course, stepping into the third phase, which is the fine tuning of this? And we all know that the fine tuning of this will happen on the last day of the negotiation—as will the fine tuning of each and every of the thirty topics which is on the table agriculturally, one; and there probably are 29 others. So, I mean, the secret of moving this negotiation forward is whether or not on the 31st March we can agree on this. I hope we can do it. I believe we can do it. It’s not a question of whether we have these topics within the agricultural negotiation and with constituencies around the WTO table who have obviously sort of dissimilar interests in certain priorities. Some are more interested in market access because they want to export; some are more interested in support reduction because they believe it creates a competitive advantage for them. So I mean US/EU hardliners [inaudible] and [inaudible] important countries in Africa or Asia may not have the same view of where the priorities are. And, of course, a step about modalities would be good news for the remaining part of the negotiations which are to take place. And it’s about concessions. And this is why the EU has tabled a paper in which we concede already at this stage of the negotiation quite a lot of our negotiating credit. I mean, if we agree that the ceilings which we had for the Uruguay Round are lowered by 50%, it is a concession. If we agree that we are ready to eliminate export subsidies in some areas which are of significance for the European countries, it’s a concession.  We never agreed to elimination in possibly anywhere in the past 40 years. So we already have made concessions, and we wish others to do the same. Anti-dumping which is part of this program of negotiation is a defensive for the US, is a defensive for a number of other countries and is an important topic for the European Union in terms of the ability of the WTO system to increase disciplines. We don’t have a problem on this. Our internal rules for managing trade difference instruments are sort of WTO-plus-plus already. So we have no problem in WTO moving to a WTO-plus system. And I think, before the WTO rules on anti-dumping oblige us to change ours, we probably have one or two rounds ahead of us. So, it’s an important issue. I think we’ve tried to help the US side to move on this because it’s a difficult domestic topic. And we understand that because, the way the US system works, I think the US Administration has been doing this rather cleverly at present: notably in trying to explain that this view—that a minimum of disciplines was playing in the interest of the US traditionally—has changed; and that, given the recourse to anti-dumping and trade defense instruments by many developing countries, the game is switching; and that the objective interest in the US in the system needs to have more disciplines. And I think it’s true. And it’s a clever view and, by the way, this is why we also have an interest in this. So, it’s progressing. It’s ripening nicely. And I don’t think it’s a topic where we should go back to the sort of nice tactical blame game which we have all played at some part of this negotiation. It’s an important potential resolve of this negotiation. And we have to care about this in handing it as much as possible, nor to deal with the US, who will have to deliver at the end of the day.  

Washington Tariff and Trade Letter: Any reason, once the United States has stepped up its negotiations in bilateral free trade agreements around the world—and Mr. Zoellick has claimed this is an effort to free up the competition for market opening but in some ways it’s also intended, I think, to isolate the European Union in world negotiations. Do you see these bilateral free trade agreements that the US is entering as something that is helpful to the trading system with the WTO and, in particular, to the EU/US relationship or something that is detrimental? 

Commissioner Lamy: Yes, I mean, they call it competitive liberalization here and I don’t share the view that this would be something which would isolate the European Union. I mean if the US want a free trade area with Morocco, whose trade is 5% with the US and 65% with Europe, I don’t feel this is a threat. If the US are having [inaudible] on the FTAA negotiation, we don’t see that as a threat. I mean, we’ve embarked on negotiations [inaudible], which we’ve concluded and which we’ve ratified. We’ve embarked on a negotiation with Mercosur. We might do things in the future with the Central American Community; with the Andean Community. I don’t see that as competition. It may be—and after all, that’s good for them—it may be an opportunity for these countries to try and raise the price of an agreement in telling the US, Well, that’s what we could do with the EU, or telling us, That’s what we could do with the US. [I’m] fine with that. It’s something which is in their hands. It’s the rule of the game and, after all, if they can sort of leverage the two elephants’ presence [to] their advantage, fine. 

Are these helpful for the Round? I mean, we remain of the view that the multilateral trade rules is the best option in town because it is the area—the domain—where the output-versus-input-productivity ratio is the best. With some political energy—and we all know that we need domestic political energy to agree to trade agreements—we get a lot of what we all need because it’s around and because we can sort of pick [a] negotiating partner, which we have in Geneva. I acknowledge that bilateral free trade agreements are, in a way, domestically or politically more sexy—and this is probably why it’s also sort of a good teasing to start some of these. We have a lot of them, and our philosophy is: WTO first. And if we can have WTO-plus agreements, yes, as a second option—and in a number of areas we have this option. I mean, to my remembrance, the only negotiation which [on] our side was motivated by the sort of competitive problem was Mexico, which we did after NAFTA and which we finished at the beginning of the year 2000. Yes, on this one, we did a free trade agreement because we had a concern that, with the NAFTA, the European Union market share in Mexico and the trade with Mexico could be sort of sidelined. It’s the only one I have in mind which corresponds to this category. The rest of our free trade agreements are basically with countries that trade with us half of their trade. That’s if you look at the Mediterranean ex-Eastern and Central Europe—now Ukraine or Russia, or even Mercosur or South Africa. That’s the rationale behind this.   basin,

Kiplinger Letter: How crucial do you see the issue of geographical place names for foods as being to the agricultural negotiations of the Doha Round? 

Commissioner Lamy: Well, I think I mentioned that in my opening remarks: it is crucial. It is crucial because that’s one of the sort of nice prices we can get for European farmers in a sort of niche sector where geographical indications are sort of a factor of added value, of higher margins, of sort of better quality. And that’s the way we want to move forward. It’s true for wines and spirits; and we have an agreement in the WTO that this register should be set up this year. It’s also true for the extension of this list, which is a sort of soft trademark protection. It’s not a trademark. It’s a [inaudible] specialist. There’s quite a bit of a difference between [a] geographical indication and [a] trademark, not the least, for instance, because you can’t trade a geographical indication, whereas you can trade a trademark. But, I mean, I’m not entering into details. So, it’s very important for us. As time comes and as the pre-negotiation about this happens, we realize that a number of developing countries are also very much interested in this and that the connection with intellectual property and traditional names is extremely important. India knows what Basmati rice is about. Even the developed countries like Japan know what Kobe beef is about. So it’s nicely spreading. But, to answer your question: yes, it is very important for us in terms of balancing our agricultural constituencies’ interests. 

National Journalists’ Congress Daily: What do you make of the fact that all the trade negotiators criticize the Harbinson paper more than they emphasize the possible commonalities of that? Was everybody sort of thinking this whole thing wasn’t going very well? Or what does that mean?  And, secondly, what do you think the prospects are now for the meeting in Cancun? What level of progress can be made there? 

Commissioner Lamy: On the Harbinson paper: Stu Harbinson said in Tokyo that this paper, he tabled it to trigger a debate. Well, he did trigger a debate. And, as always…a multi-text of this kind is shot at by everybody. And, given the way it was drafted, it’s been shot at by everybody because nobody wants, as far as I understand, even to go on saying, Well, it’s something we could live with but not that… And I think that [the] sort of basic explanation behind this lies in the fact that it’s too detailed for this state of the negotiation. There are good things in this paper. But the way he sort of [inaudible] a number of numbers I think is not helpful. And this is why we need to work extremely hard to get something which is acceptable to everybody on the [inaudible]. Here again, I’m coming back to what I said: modalities is not the end of the negotiation. In each of these negotiations, it’s a sort of ripening process, except that it’s not ripening nicely day after day with the sun. It’s a ripening process, but it may not ripen during months and [then] ripen in two days. That’s the virtue of spasms. And the ones who know about how it works know that the best negotiator in this world is the guy or the girl who will know whether a spasm is good or not; and we are all researching this [inaudible]. 

On the Cancun prospects: directly with what I was just saying, it’s not because Cancun will happen two-third of the way that Cancun will result in two-thirds of the agreement. That’s not the way it works. What we will have to assess in Cancun is whether or not the view we have that the deadline at the end of 2004, which we have agreed in Doha, is reachable or not. And then, depending on that, if the answer to that is, yes, well we will have a rough year with a sort of clearly-agreed timeframe. And this will help focus energies and prepare for [inaudible] promises, notably in sort of domestic asymmetry. If it’s not available or if reach the conclusion we can’t get there, then we’ll have to sort of adopt another scenario. My own sense is that we can get there; that, as compared to the previous rounds—and I quite well remember from the way the Uruguay Round was handled: the degree of commitment, the degree of discussion, the sort of inevitable abrasive tactical part of a negotiation like this. We are moving to the sort of “get real” part of the negotiation on this complex agenda. So, that’s my present expectation for Cancun. But, of course, lots of things have to happen in between. 

Associated Press: In your discussions yesterday with the Congressional leaders, did you get any assurances on when legislation might be passed in the House and Senate, and did your discussions include Democrats who seem to be very critical of the comments [inaudible]? 

Commissioner Lamy: Well, of course, it included Democrats, but I won’t enter into domestic politics on this side of the Atlantic. We already have within Europe a tradition in the Commission that we are relatively neutral, if we want to do our business well. So, even on this side, I won’t comment on that. On the “when” question: of course I raised it, and I got sort of answers which are not that precise. And I will [be] moving at some stage at the “when” question, but I will do that when my judgment is that the “when” question is right. I don’t think it is right today. But I know that, in the times to come, the “when” question will have to be there—either if, on this side there is a deadline which stems from the legislative work—and then I’ll have to make a judgment whether or not this fits with my own time horizon or if there is no sort of deadline of this kind, whether it’s useful or not for me to put one. So, it’s still a hanging question, but we all have it in mind. 

Reuters: Some lawmakers, because of their frustration with the situation of the Security Council in [relation] to Iraq, have talked about perhaps warning labels on French wine and water to alert consumers to the fact that they might be hazardous to their health. Would there be a justification for the Unites States to take such an action? And, if it did, how would you respond? And then, secondly, I think that one thing that kind of rankles some lawmakers and business groups on FSC is the fact that the United States has an $82 billion trade deficit with the European Union. So I guess it would [inaudible] FSC if we had an $86 billion trade deficit with the European Union. Does the fact that the US has such a large trade deficit with the European Union concern Europe at all? Does Europe feel as though it should be doing more to get its economy growing, so perhaps those figures could see some improvement on this side? 

Commissioner Lamy: On the first one, I’m not an expert in what-ifisms, so I don’t answer questions about “what if?” I read the papers. I haven’t been contacted by any Congressman, whichever rank she or he would have, which would sort of consult me or the EU website on whether this would be EU- or WTO-compliant; and I hope it won’t happen. On the trade deficit question: we trade negotiators do not run our systems with trade deficit radar, sort of piloting our [inaudible]. It’s an important number. We all have to care for the fact that such balances do not spread to sort of currency situations or others, but we don’t handle these numbers. We handle parameters, which are some of those which result in these numbers. So it’s not a trade problem. It’s an economic problem. And it is true that this trade deficit, which is huge and which is permanent now, is either—and I’m not an enough of an expert—a permanent feature of the world economy. And, really, we’ve entered a stage where the US will have a $500 billion deficit permanently, which is a system [that] is matched with the fact that the $500 billion financing that needs to be there is there in the system. It’s not what I wrote in my books, but we may have to sort of look at the books from time to time. So maybe that’s the case. But my own sense is that it has to do with a gross differential, which undoubtedly exists between the US and the rest of the world, by the way. Not so much with Europe as with Japan, for instance. And this is a macro-economic problem, which I think we need to address. I’m afraid I can’t help a lot for Japan, but we can help for Europe. And this is what we in the Commission are trying to do with the Lisbon agenda, the basic target of which is how we can raise our potential growth rate by 1%. What sort of reforms do we have to do to match this? And this is something which we are on, and I discussed this yesterday with Secretary Snow. Yes, it’s a bit problem, and we have to handle it. But it’s more on the sort of macro-economic policy than on the trade side. 

Tax Analyst: Mr. Commissioner, during many of your Washington meetings, did you discuss the possibility of a WTO challenge by the United States against the European Union e-commerce value added tax directive?

Commissioner Lamy: No.  

Bloomberg: Yesterday, at your press conference with Ambassador Zoellick, you mentioned that you are proceeding with a lot of care because of the geopolitical situation. To what extent [are] the differences over a possible war in Iraq interfering with US compliance on FSC?

Commissioner Lamy: As I said in my opening remarks, my sort of guiding concept is [one of] non-contamination. So I will try—we will try—to make sure that this enormous asset we all care about is not hit by these turbulences. And I want as much as possible to disconnect a sort of abrasiveness on this, not least because I’m speaking on this in the name of Europe. And it’s one area where Europe has got its act together. Thanks God, by the way! And, I mean, I would not like and should not, as a Commissioner, interfere with sectors where Europe doesn’t get its act together. I have no authority to make any sort of linkage of this kind and I don’t want this to happen. So: precaution, care and non-contamination.

Journalist [inaudible]: I also come back to this wine question. [inaudible] the impact of this growing anti-European feeling [inaudible]. What’s going to happen to France [inaudible]?

Commissioner Lamy: As I said in the beginning, it’s something I’m looking at carefully. No numbers are available that would show any impact. On the Transatlantic Business Dialogue (TABD), which is one of the sort of transatlantic dialogues which were set up a few years ago (with the transatlantic consumer dialogue, the transatlantic legislators’ dialogue, the transatlantic environment dialogue and the transatlantic labor dialogue, which is a set up of businesses and EU/US EU Commissioner/US Administration representatives), the rules again being that EU and US businesses come to joint positions, express priorities and we have to sort of answer to their questions or their priority list. It’s worked all right for a few years. Obviously, we have a sort of fatigue problem which translates in a lower attendance of big shots to these manifestations. It started before 9/11. It started before 15/3. 

American Metal Market: On the surface, Congress has expressed a lot of opposition to the idea of repealing the Continued Dumping & Subsidy Offset Act (Byrd Amendment). I was wondering if your meetings on the Hill helped to dispel or reinforce that perception. And, secondly, have Administration officials indicated in any way their priority on this?

Commissioner Lamy: On this non-contamination: yes, there may be a danger, and we trade people have to sort of provide as much as we can [in the way of] insurance policy for businesses, for people who trade, for markets. We have to provide stability. We have to provide transparency. We have to provide predictability. And [whenever] the degree of risk in the system increases, we are paid to step in and say, Well, what can we do to sterilize it? So of course I am watching this very carefully at this stage. As I said, I have [seen] no sign of contamination, but this not a reason for not being careful.

On GM (genetically-modified) food, of course, we discussed that as we do permanently. And I think there is a distinction to be made here between two topics. The first one is what sort of rules do we set in Europe to address the question of how we authorize GM food, GM feed, GM seed? And this is an issue which we are dealing with. We obviously don’t have the same system as the system the US has. We have an authorization system, which is more precautionary. And this can perfectly be done within the margin of maneuver which WTO rules leave to each and every member in terms of consideration of health levels for instance. And if the US have a problem with that, we can discuss it. By the way, we did discuss it. For instance, in recent legislation about traceability and labeling, and we can try and address a number of concerns the US have. And, once we’ve adopted our legislation, the US always have the possibility to litigate in WTO if they want to. We would win a case like this because WTO provisions provide for the necessary margin of maneuver and because our legislation has been tailored so that it is proportional, transparent, scientific advice on which we found our decisions, which is available to anybody. So we don’t have a problem with that.

Now there is another question, which is whether or not the said rules we’ve decided for ourselves we run it or not. And that’s the problem with the so-called moratorium. It happens that the authorization process which we used to have and we still have involves our member states—[as on] this side of the Atlantic, when the executive branch needs an involvement of a legislator to do something. What happened was that our legislator, our member states, said at some stage, Well, we [will] go on strike. We [will] stop participating in this authorization machinery until you do this. And, as it happens also on this side of the Atlantic, well, we had to do it. Because, at the end of the day, they make the decisions. And we did it. And now we’ve done it, we [will] resume the authorization process. And we know that a number of our member states could be of the view that maybe we should do something else before we resume the authorization process. And on this we disagree. This is a Commission position. Both my colleague David Byrne, my colleague Franz Fischler, my colleague Margot Wallström have joined a unanimous line on this. And this is why we are in the process of resuming this. And if we didn’t resume this, of course the US would have a point. The US would have a point because it’s one thing having a different judgment on whether our system is WTO-compliant or not, and it’s another thing that we have a system and we don’t implement it. It’s a much easier case and in terms of WTO: the first one is based on health reduction; the second one, if we don’t implement our own rules, then in, WTO terms, the suspicion may be that it’s for protectionist reasons. It is not for protectionist reasons we do this. I mean, all of you who’ve stepped once in Europe know that our farming communities are not that excited [about] GMO [one way] or the other. It’s consumers. It’s environmentalists. It’s academics. It’s [the] scientific [community] who are concerned about this. So, on this one, the US may have a point. And this is why we are trying to handle this in taking our own responsibilities as executive.

On the Byrd Amendment: you know that it’s been ruled WTO-non-compliant for obvious reasons. By the way, it’s not only a EU-US problem. We’re not the only ones to litigate on this, like basically on most of the steel things, and Byrd has a lot to do with steel. We are still in the part of the aftermath of the WTO decision, which is dealing with a reasonable period for compliance. I’ve seen that a number of Senators have signed a letter that they will repeal it. They will have to repeal it at some stage.