Officials at the World Trade Organisation (WTO) received a joint letter from Canadian and EU trade representatives in Geneva agreeing to extend the deadline for Brussels to make its member states conform to regulations.
A WTO panel decided in November 2005 that some European countries were breaking international trade rules by stopping the import of GM foods and crops, following a case brought by leading GMO producers Argentina, Canada and the US under claims that their farmers were losing millions because of the EU.
Member states ban GM
Austria enforced a ban on the import and processing of Monsanto's MON810 and Bayer's T25 maize in June 1999.
The Commission has been debating whether to force the country to lift its restrictions since 2005, as Austria has never produced the necessary scientific evidence to contest the positive assessment of the products by Europe's food safety authorities.
Last week, France complicated the matter when it chose to extend its temporary ban on the cultivation of MON810, applying the same EU measure by arguing the costs to health posed by GM crops.
The temporary ban had been put in place by President Sarkozy last October as part of plans to make France greener.
Deadline extended again
The Commission has indicated it needs more time to work with the member states to bring their national regulations in line with global trade laws.
The new deadline suggested by Canada is February 11. Meanwhile, Argentina will further extend the deadline to June 11 before considering action against Europe.
US officials have not yet said if it will also accept an extended deadline, or push for immediate sanctions.
Peter Power, Commission spokesperson for Trade, told FoodNavigator.com: "We are making progress as we continue to illustrate how our EU Regulatory Framework is working. However, it is clear that some difficulties remain."
The Commission biotech steering group will now meet on 24 January to further discuss the issues.
Bans affect US agriculture
"The EU moratorium has significantly reduced US exports of bulk commodities such as corn and soybeans into Europe," said Russel Williams, expert on biotechnology for the American Farm Bureau Federation.
"Europe has an obligation to comply with its trade obligations under the WTO and US producers remain frustrated that the EU has not yet done so. The US will remain adamant that Europe complies with its trade obligations regardless of these bans. What that means for Austria, France, Greece and others will be up to the Commission to decide."
Current GM cultivation in Europe
At the moment, the only type of GM crop grown in the EU is maize, which was approved in 1998. It is not cultivated for human consumption but for animal feed.
The maize contains a gene that defends the crop against the European corn borer, an insect pest that eats the stem, present primarily in southern and middle Europe but moving northwards.
One of the main concerns regarding GM crops is that pollination could cross-contaminate non-GM crops grown in the vicinity - and that ultimately the long-term health effects of GM on humans are not known.
Last year, over 110,000 hectares of biotech crops were harvested in seven EU member states, compared to 62,000 hectares in 2006. This represents a 77 per cent increase.
French GM crop cultivation experienced the greatest increase in Europe, quadrupling in size from 5,000 hectares in 1996 to over 21,000 hectares last year.