The Canadian government says farmers stand to make big gains from a trade ruling that opens European markets to genetically modified organisms (GMOs).

A World Trade Organization panel ruled this week that the European Union (EU) moratorium on biotechnology products between June 1999 to August 2003 was illegal under trade rules.

Canola, seen here in a field outside Winnipeg, should find new markets in the European Union after a WTO ruling cleared the way for imports of genetically modified crops.
(Gregory Bull/Associated Press)

"This ruling will enable Canadian producers to access European markets and effectively market their products," International Trade Minister David Emerson said in a release.

The government said European demand for oilseeds, such as canola, is growing because the EU is promoting green fuels such as biodiesel, which is made from methyl esters extracted from crops like canola.

While the government did not have an immediate assessment of the impact of the ruling, Emerson's press secretary, Jennifer Chiu, said exports of one modified crop provide an indication of the impact of the ban.

In 1994, before the ban, Canada exported $425 million of canola to the European Union. After the ban was imposed, exports fell to $1.5 million.

The EU said it won't appeal the decision. That may be because it wants oilseeds for biodiesel, or because it argues that it changed its policy in 2004, when it allowed modified U.S. canned corn to be sold.

"As a result, most of the findings of the panel have become theoretical," EU trade negotiator Raimund Raith told the Associated Press. "There's no basis for claiming that the [EU] is maintaining the moratorium."

The EU initially imposed the ban because of fears about the impact of GMOs on people and the environment.

Canada, the U.S. and Argentina fought the move at the WTO, arguing that there was no scientific evidence to stop GMO imports.

Biodiesel is made through a chemical process called transesterification, which separates vegetable oil into methyl esters and glycerin, itself a useful product. Biodiesel, which burns more cleanly than petroleum products, can be used as a fuel by itself, or added to petroleum products.