LUXEMBOURG

European Union governments on Monday endorsed a plan that foodstuffs and animal feeds containing genetically modified organisms be clearly labeled, but kept in place a 1998 ban on the marketing of new GMO products in the union.

Retaining the moratorium was a blow for the European Commission which said it will now take "many more years" before new biotech foods can come on the market in the 15-nation bloc.

Eleven such products were approved prior to the 1998 ban and 13 new ones await EU approval. European Environment Commissioner Margot Wallstroem has proposed the world's toughest rules on labeling of GMO foodstuffs and tracing them through the food chain.

However, wary of fears in public opinion about the safety of genetically manipulated foods and feeds, the environment ministers of at least six EU nations were in no mood to approve new GMO products or lift the 1998 ban.

Belgian Environment Minister Magda Aalvoet, who chaired the meeting, said while the proposed labeling and monitoring rules "met with expectations, several countries see a link between approval of (new biotech foods) and the removal of the moratorium."

British Environment Secretary Margaret Beckett, whose country favors lifting the EU moratorium, reminded her EU colleagues "of the likely effects on our trading partners, both in developed and developing countries."

The ban has angered U.S. exporters and hampered the growth of European biotech firms. U.S. officials have said the labeling could cost U.S. companies $4 billion a year.

The EU is working on a plan that will require manufacturers to keep records to monitor the movement of their genetically modified products "from the farm to the supermarket" and label them.

Wallstroem chided EU governments for not being clear to makers of the 13 GMO products awaiting EU approval. She said they have been held in limbo since the 1998.

"This is not a good situation," Wallstroem told reporters. She said the EU was leaving itself open to lawsuits and suggested the issue be put on the agenda of the next meeting of EU leaders in December in Brussels.

This month, the commission issued a report saying GMO foods may be safer than regular foods. Contradicting the prevailing sentiment in Europe against biotech crops - popularly known as 'Frankenstein foods" - it said 81 research projects over the last 15 years did not find "any new risks to human health or the environment, beyond the usual uncertainties of conventional plant breeding."

The practice of labeling GMO products is opposed by U.S. industry groups. They fear labels will improperly stigmatize the products and claim it's unfair to require labeling of ingredients such as soybean oil, in which no DNA can be detected, but not of products, such as wine and cheese, in which biotech enzymes are used.

In the EU view, however, labels will boost consumer confidence in gene-altered crops, not to discourage their sale.

The United States has said it might challenge the EU measure in the World Trade Organization.

Seventy percent of the world's genetically modified crops are grown in the United States which currently does not require any labels for products with gene-altered ingredients. Complicating matters is the fact that modified grains are often mixed with conventional crops.

While about 40 crop varieties are in use in North America, the EU has approved only 11. The EU accounts for less than 1 percent of the 40 million metric tons of biotech crops grown annually.

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