The Irish Independent reports that TDs' pay has doubled since Fianna Fail and the Progressive Democrats came to power.
When all pay, which includes that for ministers, office holders, MEPs etc is added up, the total average spend by the taxpayer on each TD is €115,000.
And that is before they claim for generous expenses and other allowances.
The 'minimum wage' for a TD has doubled to almost €92,000 since 1997 when the new long-service allowance is included.
But only a handful earn that. Most enjoy a major salary boost thanks to extra allowances for being ministers, or serving on committees, or special party responsibilities.
The startling increase in political remuneration is revealed in the first comprehensive study of the salaries of all 166 TDs carried out by the Irish Independent.
And there will be more hikes before the next election.
The level of TDs' pay is highlighted as talks on a new national pay agreement begin today.
The Government is telling workers that double digit pay increases are not on the cards. Yet TDs' wages are now linked to principal officers in the civil service, so they, too, will benefit from the outcome of the pay talks.
TDs got more wage hikes than any other public sector workers as a result of two special pay reviews.
The salary details are based entirely upon documents released under the Freedom of Information Act from the Houses of the Oireachtas and figures from the Department of Finance.
The basic rate of pay for a TD in July 1997 was €45,729. Today it is €88,556.
However, these figures are not directly comparable, as long service bonuses were introduced in the meantime and 70pc of all TDs are entitled to benefit from these.
TDs with seven years service in Leinster House are paid €91,382 and those with 10 years service get €94,205.
When the numbers entitled to the long service bonuses are factored in, the average basic pay works out at €92,112 - double the basic rate in 1997. This is before the additional wages are added into the mix.
The figures show that 70 out of the 166 TDs now earn more than €100,000. Just 18 TDs are paid the bottom rate of €88,556 and the remainder benefit from a range of additional payments including: Ministers (€110,488), Junior ministers (€48,215), Oireachtas committee chairs (€17,698), Oireachtas committee vice-chairs (€9,051), Oireachtas committee whips (€5,639).
Office holders, members of the Houses of the Oireachtas Commission and party whips all get additional sums.
The salary increases over the past nine years have come from the Partnership 2000 national wage deal, Programme for Prosperity and Fairness wage deal, Sustaining Progress wage deal, Public Service Benchmarking Body, and the Review Body on Higher Remuneration in the Public Sector.
Hikes
TDs are the only public sector workers to benefit from the pay review process for top civil servants and benchmarking, as well as partnership agreements.
In industrial relations circles this has been described as a 'double whammy'.
No other public sector group was ever allowed to benefit from these two special pay reports, which were separate.
Aside from the basic pay, there have also been substantial hikes in allowances, travel expenses, office grants, pension, gratuity and severance payments.
The pay increases are defended by both Government and opposition parties who point to the long hours of work put in by politicians.
Finance Minister Brian Cowen says they do not set their own pay rates as it is an independent process.
The Minister believes the issue has to be debated in that context, his spokesman said. "The pay increases for parliamentarians, TDs and Ministers have always been independently reviewed," he said.
Fine Gael chief whip Paul Kehoe described the pay as "generous" but said TDs do have to work hard in return at both a local and national level. TDs work from early in the morning until late at night, six or seven days a week, and it is expected that they attend numerous meetings, he said.
The Irish Independent also reports that an ESRI report suggesting that the soaring pay of public servants needs to be curtailed has been rejected by Impact, the largest public-sector trade union.
It claims that its members have better degrees than most other workers, even those with third-level qualifications. It does not want public-service professionals being compared with lower-grade private-sector technicians. Spokesman Bernard Harbour said that the comparative pay study makes no distinction between different third-level qualifications.
"The comparison says a worker who successfully completes a two-year course at an institute of technology has the same qualification level as a hospital consultant, an architect, or a physiotherapist."
There is growing awareness among private-sector employees that public servants, with their job security, gold-plated pensions, benchmarking top-ups and annual incremental pay rises, enjoy much better pay and conditions than comparable private sector employees.
Despite the €2m spent on the benchmarking report four years ago, Mr Harbor said existing data did not allow pay comparisons.
The Irish Times reports that the number of visits by Irish citizens to the United States last year is estimated at more than 500,000, putting Ireland among the top 10 countries in the world in terms of US visitor number.
This was a significant increase on 2004 when official US figures put the number of non-immigrant Irish visitors at 429,940, putting Ireland at 14th place in the world.
Meanwhile, in the six weeks before last Christmas alone, it is understood that more than 100,000 Irish citizens visited the US.
The average stay for Irish visitors during 2004 was 14 nights, according to the US Office of Travel and Tourism Industries, and the average amount of money spent per day was €104.78 ($126).
More than half, or 53 per cent, visited New York city and almost one in four, or 23 per cent, rented a car during their stay in the US.
Commenting at the weekend, Minister for Foreign Affairs Dermot Ahern said: "It's mind-boggling to see the level of travel by Irish people but it's one of the clear manifestations of an economy that is very, very healthy and long may it last from our point of view."
The estimated figure of more than 500,000 for 2005 is based on information supplied to the Department of Foreign Affairs by the US embassy in Dublin.
The number of visitors is remarkable in view of the size of Ireland's population at four million, although it should be borne in mind that a substantial number of Irish passport-holders are resident in Northern Ireland or overseas.
The level of mobility of the population is also reflected in reports that the number of Irish visitors to Spain last year was approximately one million. Irish visitors to the Canary Islands alone are estimated at 440,000 in 2005, which puts Ireland in fourth place in the world for visitors to that area.
According to the official figures from the US Office of Immigration Statistics supplied to The Irish Times, there were almost as many non-immigrant visitors from Ireland in 2004 as from the entire African continent. The total number of African visitors was 432,314 compared to 429,940 from Ireland.
Ireland is far ahead of most of its EU partners in terms of visits to the US. Figures for 2004 were as follows: Austria 152,850; Belgium 209,586; Denmark 187,613; Finland 102,366; Greece 61,699; Poland 172,956; Portugal 99,368; Sweden 309,334.
Mr Ahern said the statistics illustrated the reason the Government was pressing ahead with the updating of Irish passports to meet the latest US technical criteria "in order to ensure that our people would not be prevented from going in and out to America".
The Irish Times also reports that the first non-US long haul route operated by Aer Lingus has run into problems over the availability of visas for travellers flying from Dubai to Ireland.
The route, which was expected to carry 70,000 passengers in the first year, is heavily dependent on traffic into Ireland from Dubai and the surrounding region.
Because Dubai in the United Arab Emirates is outside the EU, travellers are required to have a visa. However the nearest Irish embassy capable of issuing them is in Riyadh, Saudi Arabia, some 866 kilometres away. Irish diplomatic representation for the United Arab Emirates is handled by the embassy in Saudi Arabia
While Aer Lingus reports a large volume of queries about the route, travellers are reluctant to send passports and visa applications to another country. However, the Government is adamant that standard visa and vetting procedures be followed.
While Aer Lingus is hopeful of strong load factors from Dublin to Dubai, healthy outbound volumes are also needed to make the route profitable.
A spokesman for the airline said talks were "ongoing" between Aer Lingus and the Department of Foreign Affairs. The airline favoured a solution "sooner, rather than later", he commented.
Some consideration had been given to Enterprise Ireland issuing visas in the area, but this idea has been rejected. The idea of the British Embassy issuing the visas was also considered at one point.
Aer Lingus is attempting to enter a new phase of its development with the Dubai route. It is the first time Aer Lingus has offered a long-haul destination outside of the US and is the first step in the expansion of its new long-haul network.
Dubai is recognised as the business centre of the Middle East. In addition it has seen a huge growth in tourism from the Irish market over the last 10 years.
The city is the leading hub in the Middle East for destinations such as Bangkok, Hong Kong and Sydney. Dubai will be the fifth route in the Aer Lingus long-haul network along with New York, Boston, Chicago and Los Angeles.
The Irish Examiner reports that a top consultancy group has condemned Finance Minister Brian Cowen for his failure to deliver any initiatives to relaunch the Irish Financial Services Centre (IFSC).
December 2005 marked the end of the first phase of the IFSC and consultants Deloitte & Touche warned attracting new investment to the centre will become increasingly difficult as other centres challenge for inward investment.
To survive the competitive environment of the financial services world we must always be “first in class” in every aspect of our regime, they said. Corporation tax of 12.5% was very appealing but other ways have to be found to keep the IFSC attractive to investors.
Deloitte & Touche tax partner Paul Reck said: “The Government was slow to respond to tax breaks for aircraft leasing and Ireland lost out for several years in that area.
That was regrettable given that GPA led the world in this field for so long, he said.
Overall, Mr Reck said the Government should have indicated clearly at this stage that it was planning a series of initiatives to clearly indicate to the financial services sector it had its finger on the pulse.
“There was a whole range of measures the Government could have announced that would have given a clear message to potential investors that investing in the IFSC would be in their interest.”
Deloitte also condemned abolition of the remittance basis of taxation on employment.
That move has put the economy at a serious disadvantage because it will deprive us of top-calibre executives from overseas companies who might otherwise come to work here for a time. It will, in effect, cause a loss of brain power to the country, said Deloitte of the Finance Bill.
The system allowed people working here on behalf of overseas companies to pay tax only on the money paid to them in Ireland.
The rest of their earnings were not liable for tax and it made moving to Ireland a very attractive proposition for high-calibre people that could have a major impact on our business fortunes, said Deloitte.
They also attacked the proposed implementation of some taxes on a retrospective basis. That was contrary to a taxpayers right to know his precise tax liability in any given year.
That “legitimate expectation as regards certainty in the tax code was now gone and it created an unfortunate precedent”.
The Financial Times reports that companies around the world are lining up to exploit a new form of financing that cuts costs of capital and could prove one of the most crucial developments in corporate funding in two decades.
Bankers are predicting explosive growth in a new generation of so-called hybrid securities, creating a potentially lucrative source of fees for investment banks. Companies will increase the amount raised from these securities tenfold to $40bn this year in the US alone, according to some Wall Street forecasts.
The new securities combine the most advantageous features of debt and equity to reduce companies' tax bills and cut their financing costs while bolstering their credit ratings.
The instruments are also proving popular with investors, who tend to view them as risky but high-yielding debt, although some observers warn the newest structures have not been tested in difficult market conditions.
Investors view the hybrids as long-term subordinated debt, meaning they would rank behind all other creditors in a bankruptcy. The hybrids carry some equity-like risks, such as the possibility interest payments might be deferred, but have no share price upside – though investors can gain from early repayment.
Analysts at Citigroup calculate that if half the top 500 US companies replaced 5 per cent of their capital with hybrids, it would increase their value by $100bn.
"The potential of the hybrid capital market is enormous," said Michael Klein, Citigroup's head of global banking. "As issuers and investors become more comfortable with these securities, they could become one of the biggest corporate funding innovations since high yield bonds."
Even conservative estimates put the potential for hybrid issuance this year in the US at $30bn, up from just over $4bn last year. With bankers confident the new hybrids will have lasting popularity, the market could soon rival junk bonds, about $90bn of which were issued in the US last year, according to Merrill Lynch.
"It has an application for some immediately, and some in the future. It's a security that is not going away any time soon," said James Esposito, head ofinvestment-grade syndicate at Goldman Sachs.
Leading investment banks are scrambling to establish a lead in this lucrative market where fees are more than double the going rate for traditional bond issues.
The hybrids have taken off both in Europe and the US since Moody's, the credit rating agency, changed the way it rates them a year ago. The diverse, but so far mostly investment-grade issuers, have included Thomson, the French media services group, US bank Wachovia and Bayer, the German chemicals group.
"It's compelling for corporates," said Chris Whitman, head of debt capital markets for Deutsche Bank in the US. "It's going to be a big theme all year long."
The FT also reports that Wall Street is drooling over what looks like a free lunch. The latest types of hybrid securities, which combine characteristics of shares and bonds but are more cost- effective, are finding an eager audience among companies in the US and Europe.
Rating agencies like hybrids because they have loss-absorbing features usually associated with equity. And in regulated industries such as banking, watchdogs have accepted them as core, equity-like capital as well.
But the products are complicated and labour-intensive to put together, meaning investment banks can charge a premium fee – perhaps double or more what they would charge for a regular bond issue. Together with the prospect of heavy issuance, that has got Wall Street excited.
Both retail and institutional investors have snapped up recent issues. Last month, a huge $2.5bn sale of Wachovia Income Trust Securities, or Wits, by the fourth-largest US bank attracted demand of nearly $10bn.
“We’re in one of those temporary nirvanas where issuers and investors both seem very happy,” said Erin Callan, head of global finance solutions at Lehman Brothers.
Securities that straddle the debt and equity worlds are not new. They combine features of debt such as regular interest-like payments and equity-like characteristics such as long or perpetual maturities and the ability to defer payments.
Preferred stock, a type of senior equity that receives a set dividend before common shareholders get anything, has been around for a long time.
About a decade ago, regulated financial institutions started issuing so-called trust preferred securities, or Trups, which are functionally similar to preferred stock but can be structured to achieve extra benefits such as tax deductibility for the issuing company. Other hybrid structures have also been tried.
But bankers were still searching for what several called the “holy grail” – an instrument that looked like debt to its issuer, the tax man and investors, but like equity to credit rating agencies and regulators.
That goal came closer a year ago when Moody’s, the credit rating agency, changed its previously conservative policies, opening the door for it to treat structures with some debt-like features more like equity.
That meant that on top of other benefits, companies could issue hybrid products – which cost them only slightly more than regular debt – to replace costly and less flexible share capital without denting their credit ratings much.
“It was absolutely Moody’s that started the ball rolling,” said Kevin Conery, preferred strategist at Merrill Lynch. Standard & Poor’s and Fitch Ratings also clarified their thinking on hybrids, and the three agencies are now broadly aligned.
Results came first in Europe, thanks to tax regimes that made it easier than in the US to develop new products that both improved rating treatment and qualified as debt for tax purposes. A €1bn ($1.2bn) issue for Vattenfall, the Nordic energy company, was “a watershed”, according to John Dickey, global head of new products at Citigroup.
The hybrid secured “basket D” treatment from Moody’s, meaning 75 per cent of the issue was categorised as equity rather than debt for rating purposes. A clutch of other issues followed in Europe, with the US not far behind.
“Hybrids have become incredibly effective corporate finance tools,” said Mr Dickey. He and other bankers say the instruments can be attractive to issuers even if circumstances prevent them being tax deductible, because the cost of capital advantage over a blend of traditional debt and equity is so great.
If a company wants to raise $100m of capital with half of it qualifying as equity for rating or regulatory purposes, there are, simply put, two options: $50m each of traditional debt and stock, or $100m of hybrid capital. In some cases, the marginal cost of funding using traditional sources could be almost twice as high as with hybrid capital in today’s market (see example).
The advantage could be bigger still with 75 per cent equity treatment.
Last August, Lehman Brothers was among the first to test the US market for the new class of hybrids when it issued $300m of securities on its own behalf, calling them Enhanced Capital Advantaged Preferred Securities, or Ecaps.
“That was a clever balancing of Moody’s view on hybrids, regulatory views on hybrids and tax treatment in the US,” said Barbara Havlicek, who chairs Moody’s hybrid analysis committee. Several variants of the structure have since been tried in the US, with both financial institutions and industrials making the most of investor demand.
Financial institutions, for example, are highly sensitive to their capital position vis-à-vis regulators.
“We have to satisfy our regulator’s needs as well as getting higher rating treatment,” said Daryl Bible, treasurer of US Bancorp, which issued $375m of hybrid securities in December. Blessed by the Federal Reserve as a component of tier one capital, the new hybrids “give us flexibility to issue equity-like securities more easily than issuing common equity,” Mr Bible said.
He anticipates issuing further hybrid capital in 2006, partly to replace higher cost instruments already in place and partly to help the company grow. If it wishes, USB is allowed to call, or repay, $1.8bn of more costly capital this year alone.
Among all US banks, up to $35bn of Trups issued five or 10 years ago are callable this year, according to bankers. Many expect the bulk of that capital to be replaced by new hybrid instruments. Insurance companies are also potentially well-suited to issuing the new forms of hybrid.
All that potential new business, and the high fees available, has investment bankers racing to lock in clients for their particular versions of the structure. Citigroup, Goldman Sachs, Lehman and Merrill were among the banks that pioneered the structures, with rivals including Deutsche Bank and JPMorgan close behind and others chasing hard.
Many bankers also see plenty of potential for non-financial companies to benefit from the new hybrids. In Europe non-financial issuers including Henkel, the German consumer goods maker, have tapped the market.
“This could be an interesting product in the context of funding acquisitions … to maintain ratings,” said James Esposito, head of investment grade syndicate at Goldman. That was the rationale for the first non-financial new hybrid issue in the US – a $450m deal for Connecticut toolmaker Stanley Works, a structure dubbed an Etrups, or Enhanced Trust Preferred Security.
Mr Dickey of Citigroup added: “It is compelling for issuers looking to finance acquisitions, repurchase shares, fund pensions or lower their overall cost of capital in a ratings friendly manner.”
Funding a share buy-back was part of the aim of a $500m issue by Burlington Northern Santa Fe, a US railway company.
If new hybrids do take off this year, they could bring Wall Street a bonanza, with some estimates of issuance this year running as high as $40bn, about 10 times last year’s total.
“I don’t think we’re going to end up saying the reality fell short of the hype,” said Chris Whitman, head of debt capital markets for Deutsche in the US.
One potential damper would be a change of heart by a rating agency, by regulators, or by the tax authorities. The first looks unlikely, with the three big rating agencies now roughly in line in their treatment of hybrids. The Fed, meanwhile, has accepted equity treatment for hybrids based on its own analysis, which is consistent with new Basel II guidelines, according to Mr Bible at US Bancorp.
As for the tax authorities, hybrids are not considered a grey area. “The tax law is very clear,” said David Miller, a tax partner at Cadwalader, Wickersham and Taft. “So long as an issuer satisfies [specific requirements], the issuer will be entitled to interest deductions.”
The only reservations about the new hybrids appear to be held by investors. Even in that constituency, however, many appear persuaded. “I would put us in the excited camp,” said Bernard Sussman, chief investment officer of Spectrum Asset Management, a fund manager specialising in the preferred market.
Deals have been priced with between half and one percentage point more return than senior debt of the same companies, he said. “In our estimation, that’s sufficient compensation. They have been pretty strong credits – they are risks worth taking.”
He conceded that investors’ search for extra yield, a feature of all types of investment in the current market environment, may have caused some people to consider hybrid investments without doing enough homework. “What’s key is that the investor truly understands the structure,” he said.
Tom Houghton, a corporate bond fund manager at Advantus Capital Management, is less convinced. Many investors, he said, understandably prefer to buy riskier securities of companies they like rather than look elsewhere – but some may be sticking their necks out with the latest hybrids.
“I think investors have to be careful, and understand these are more equity-like than debt-like,” he said. “We have not bought any. We still have a healthy amount of scepticism.”
Moody’s, the rating agency that triggered this wave of activity, also sounds a note of caution.
“The thing that is yet to be seen is how these things perform in a weakening credit environment,” said Ms Havlicek. “Whether or not compensation is adequate is a question that will prove out over time.”
The New York Times reports that for for those of us who watch the Super Bowl for the commercials, effusive thank-you's are in order the morning after: to Steven P. Jobs, for the video iPod; to Al Gore, for inventing the Internet; and to Janet Jackson, for the malfunctioning wardrobe.
They deserve the kudos because they could be deemed responsible for the marked improvement in the commercials during Super Bowl XL last night. The fact that the spots are to be made widely available — on Web sites, for downloading, as video-on-demand programs — outside the broadcast of the game on ABC, seemed to inspire advertisers and agencies to broaden the appeal beyond the typical male football fanatic, who stays glued to the set to giggle at ads with jiggling cheerleaders or flatulent horses.
And the pledge by most Super Bowl sponsors to steer clear of crass, frat-boy humor, made after Ms. Jackson's halftime mishap of 2004, remained largely in effect. To be sure, some spots were aimed at the lowest common denominator — after all, the game usually draws 90 million or more viewers — but refreshingly, they were outnumbered by spots reaching for a higher form of hilarity or trying to tug at the heartstrings.
What follows is an assessment of some of the best and worst commercials during the game. The spots described below are among 35 provided to reporters before the game, out of the total of about 50 that were scheduled to run.
AMERICAN HOME HEALTH A commercial evocative of the 1995 film "Safe" presented the P.S. line of cleaners and hand washes made by American Home Health as the alternative to wearing hazmat suits in public. Creepy but clever. Agency: the Ronin Advertising Group.
AMERICAN HONDA MOTOR The Ridgeline truck sold by American Honda Motor played Cupid to two cartoon characters usually found on mud flaps. A delightful spot that mashed up Looney Tunes and the Pep Boys. Agency: RPA.
BUD LIGHT Commercials for the Bud Light beer brand sold by Anheuser-Busch were centered on sight gags that ranged from slight to superb. The weakest reprised a tired tale of two friends confronted by an angry bear. The standout showed a "magic fridge" inspiring an urban cargo cult. Agency: the Chicago office of DDB Worldwide, part of the Omnicom Group.
BUDWEISER Never mind stupid tricks, pet or human. The performers in three commercials for Budweiser beer, also sold by Anheuser-Busch, were smarter than the average Letterman guest. The best spot asked this offbeat question: What do you call a shorn sheep that disrupts a football game played by the Bud Clydesdales? Why, a streaker, of course. Agency: DDB Chicago.
BURGER KING The Burger King Corporation offered a twisted, over-the-top tribute to Busby Berkeley, the movie musical maven, by way of "Springtime for Hitler" from "The Producers." The hilarious spot presented chorus girls dressed as Whopper ingredients, piling atop each other to simulate the making of a sandwich. Let's hope there is a sequel next year honoring Berkeley's big number from "Dames," retitled "I Only Have Fries for You." Agency: Crispin Porter & Bogusky, part of MDC Partners.
CAREERBUILDER The chimpanzees that were so (inexplicably) popular in spots last year for the job-search Web site CareerBuilder, owned by a consortium of publishers that includes the Tribune Company, returned in two commercials, much to the dismay of animal-rights activists and many viewers with I.Q.'s in the three digits. But in the end, it is difficult to hate party animals when they are actually animals. Agency: Cramer-Krasselt.
FEDEX A far-out spot for FedEx, giving a goofy glimpse at the dangerous life of prehistoric man, was among the funniest in the game. But fans of the current crop of Geico cave-man commercials, Monty Python or the 1981 movie "Caveman" may cry copycat. Agency: the New York office of BBDO Worldwide, a unit of Omnicom.
GODADDY A risqué commercial in the game last year for GoDaddy, the Web site registrar, worked because it used the stereotype of a buxom babe to mock the hypocrisy of the hysteria over Ms. Jackson's halftime performance. But the spot this year brought back the babe without that higher purpose. As a result, it seemed trite and sexist. Agency: in-house.
MASTERCARD Another sign that the phrase "witty Super Bowl spot" may no longer be oxymoronic came in a commercial for MasterCard, which simultaneously celebrated and sent up the TV series "MacGyver." The star, Richard Dean Anderson, returned to parody how he used random items to help save the world. Among his purchases: an air freshener, tweezers, nasal spray and a turkey baster. Agency: McCann Erickson Worldwide, part of the Interpublic Group of Companies.
NATIONWIDE A commercial for Nationwide Financial showed there is some life left in a Super Bowl ad mainstay: the surprise ending. The spot seemed to be selling "Shampoo di Italia," endorsed by the model Fabio, but the "aha!" moment revealed the pitch to be for retirement planning. Agency: TM Advertising, part of Interpublic.
PEPSICO Two commercials for Diet Pepsi, sold by the Pepsi-Cola division of PepsiCo, followed the company's Super Bowl ad playbook so closely that watching them seemed, to quote a former Pepsi-Cola spokesman, like déjà vu all over again. Celebrities? Check. Music? Check. Frantic pacing? You bet. Knocking Coke? Uh-huh. Still, there were some cute touches, like a rap-music spoof that renamed the brand "D. Pepsi." Agency: DDB New York.
PROCTER & GAMBLE The creation of the new Gillette Fusion razor, sold by Procter & Gamble, was compared to the effort of master fusion, the process that powers the sun. Really. No kidding. This smug, self-important spot may be the most bombastic since a campaign that peddled the 1957 Mercury as "dynamite from Detroit!" Agency: BBDO New York.
The NYT also reports that the battle over agricultural biotechnology could reach a tipping point this week, when the World Trade Organization is expected to render its verdict on charges by the United States that Europe is illegally restricting imports of genetically modified crops.
Even if the United States wins — that is the prevailing rumor — genetically modified foods would not flood Europe because citizens there remain wary of them. But the American government and the biotechnology industry hope a ruling in their favor would sound a warning to other nations not to follow Europe's lead in restricting farm biotechnology.
"It's pretty clear the U.S. had to draw the line so it didn't get worse around the world," said Craig Thorn, an agricultural trade consultant in Washington whose clients have included the biotechnology industry.
An American victory could help developers of genetically modified crops, including Monsanto, DuPont and Dow Chemical, as well as the European companies Syngenta and Bayer. American farmers growing genetically modified crops might also benefit from increased exports. Trade officials in Washington say they expect a preliminary decision from the three-person panel tomorrow. But the decision has been put off numerous times since the complaint was first filed in 2003, so another delay is possible.
In its complaint, the United States, joined by Canada and Argentina, said that European officials placed a moratorium on approving new biotech varieties in 1998. That violated a global treaty on standards for food, which requires governments to act without "undue delay" and to base decisions on scientific risk assessments, not political expediency.
Europe counters that there was no moratorium. Decisions just took time, it said, because it needed data from the biotech companies and because it was revising its regulations.
Europe said the crops posed legitimate risks to health and the environment that had to be weighed with "a prudent and precautionary approach."
Since biotech crops were first planted widely 10 years ago, their use has increased steadily. Last year, 8.5 million farmers in 21 countries grew the crops on 222 million acres, although the United States accounted for more than half the total acreage, according to the International Service for the Acquisition of Agri-Biotech Applications. The crops are mainly soybeans, corn or cotton containing bacterial genes that provide resistance to either herbicides or insects.
But consumer opposition and restrictions by various governments have clearly slowed the adoption of the technology and its application to other crops like wheat, rice and potatoes. In the United States, where most soy and half the corn crop is genetically engineered, most processed food, from corn flakes to salad dressing, has an ingredient in it from a biotech crop. But in Europe, genetically engineered foods are hardly found.
The direct economic impact of the halt in approvals has been fairly small. American farm interests say that about $300 million a year in corn exports to Europe have dried up since 1998. In contrast, W.T.O. cases involving American steel tariffs and tax subsidies to exporters, both of which the United States lost, involved billions of dollars a year.
Even before approvals stopped, Europe accounted for only 4 percent of American corn exports. Soybeans are still exported to Europe because the only genetically engineered bean was approved before 1998.
Even if Europe loses, it will argue that the findings are moot because it resumed approving biotech crops in 2004.
American officials say those recent approvals are a grudging response to the trade complaint and that decisions are still not coming fast enough. Even if approvals do accelerate, specialists do not expect large exports to Europe of either genetically modified corn or food containing biotech ingredients.
Europe approved new rules in 2003 that require foods with genetically modified ingredients to be labeled and the ingredients to be traceable to the farm on which they were grown. Food companies in Europe and America, worried that such a label will turn away consumers, avoid biotech ingredients.
"The traceability and labeling scheme puts a black mark on any biotech product," said Stephanie Childs, spokeswoman for the Grocery Manufacturers of America, which represents big food companies like Kraft and Kellogg. The grocery manufacturers and other American industry groups are urging the government to file a new W.T.O. complaint against the labeling and traceability rules. United States officials say that is under consideration.
Opponents of biotech food say that a ruling in favor of the United States need not dissuade other countries from regulating genetically modified crops, because the American complaint was not against Europe's regulations per se, but rather about delays in applying the regulations.
Still, Jean Halloran, director of food policy initiatives at the Consumers Union, based in Yonkers, said such a ruling would set a bad precedent. "Safety and health regulations should not be second-guessed by trade officials," she said.
