America's farm lobbyists have long been pressing their government to launch a formal trade dispute against the European Union's ban on genetically modified crops. This week they got their way, as the US and more than a dozen allies started proceedings within the World Trade Organisation.

For US farmers - the world's top planters of GM crops - the case is a welcome chance to crack open a lucrative market. But the case may ultimately do their country more harm than good.

Now is a particularly bad time to embark on a dispute that will inflame anti-Americanism in Europe. In the broader, already deteriorating relationship with continental Europe, the US has much more important issues at stake, notably reviving the Doha round on trade and mending diplomatic relationships strained by the Iraq war. Moreover, a close look at the options reveals that each of the plausible outcomes from a dispute would leave the US worse off than before.

First, the US could pay the political costs of launching an inflammatory dispute and then lose. Most press accounts compare this case with one of the first disputes ever handled by the WTO: the EU's ban on beef that had been produced using hormones. The EU lost because its ban had no basis in science and in "comparable" areas of food policy it had adopted much less strict rules - a telltale sign that the ban was a protectionist gambit.

On the surface, the cases appear similar. Although the science on the health risks of GM food is contested, essentially all the credible evidence shows that these foods are safe, which would seem to indict the EU ban. But in critical ways the cases differ. Across the board, the EU is tightening food safety regulations in ways that seem irrational by standard cost/benefit tests but, crucially, are broadly non-discriminatory and consistent - the key tests for whether a trade ban is legitimate. Moreover, the GM ban is a temporary measure - unlike the permanent ban on beef hormones - and trade rules allow more flexibility for countries that implement temporary measures when they can claim the science is uncertain.

Second, the EU could change its rules in the middle of the dispute. For several years, EU bureaucrats have been designing a new set of standards that would "reopen" Europe's markets to GM foods if traders complied with onerous tracing and labelling requirements. This shift would make it harder for the US to win because trade laws are tolerant of labels that allow consumers to make the final choice. While the US might respond by dropping the suit, it would be more likely to redirect the dispute against the tracing and labelling rules. In the past, hotly contested trade disputes have usually taken on a myopic life of their own. Each side digs in and the political damage spreads.

Third is the most likely (and worst) outcome: the US could win. The victory would be Pyrrhic because the issues are fundamentally ones of morality and technology - they must be settled in the courts of consumer opinion. On this score, the beef hormones case is instructive. Even today, hormone-treated beef is no more able to find European consumers than it was before the US won its case; and the years of legal wrangling have led to counter-sanctions that have harmed a wide variety of unrelated products and industries. The antagonism over GM foods appears to be unfolding in much the same way.

A better strategy would have been to stay the course that US policy has followed ever since the controversy over GM crops broke out in the late 1990s. Time is on America's side because the technology is already proving itself in the marketplace and European opponents will find themselves increasingly isolated.

But now that Washington has pulled the trigger, what can be done? The greatest danger is that both sides of the Atlantic slide into a tit-for-tat retaliation. But a trade war will cause untold harm to an alliance already in stress and make it harder to rejuvenate the soggy world economy. Cooler heads must prevail.

In Europe, the critical need is to reform the moratorium on GM foods. Frustration over its inability to get the import ban lifted is what pushed Washington to this desperate act. In the US, serious movement in Europe must be seized as pretence to rescind the WTO case before the antagonisms of hearings, judgment, appeal and retaliation unfold.

STANFORD, California - The Bush administration wisely backed away this month from formally challenging Europe's ban on genetically modified foods. It made no sense to antagonize Europeans over the food they eat when they are pivotal to more weighty matters, such as a new resolution on Iraq.

Still, Washington's threat that it would file a case against the European Union at the World Trade Organization had palpable benefits. Even the countries with the most hostile policies on engineered food - France and Germany among them - took steps toward allowing the European Union to work on replacing the blanket ban with a new system for tracing and labeling engineered food.

But the decision to back off also means that American farmers are still denied access to the lucrative European market. European consumers still pay more for food than they should. And developing countries that could most benefit from engineered crops are still frightened that losing their "engineering-free" status will make it impossible to export food to Europe.

Yet the science on food safety is as certain as it ever gets: There is no known danger from eating engineered food.

Having backed down, the Bush administration will find it hard to make the threat of going to the trade organization credible again and to continue the momentum toward removing Europe's ban. But even harder for the administration will be keeping domestic politics at bay.

The biggest threat to the success of the U.S. strategy on engineered foods is in the American heartland, which is angling for a fight with Europe over the ban as the 2004 elections approach. Senator Charles Grassley of Iowa called the decision to defer a trade dispute "the usual snobbery" of a State Department "more concerned about international sensitivities than the American farmer." Two tactics should guide the effort to open Europe's markets. One is to let the Europeans lead their own reform.

The engineered foods available to consumers today mainly benefit farmers who can grow them at lower cost. These foods look and taste the same as their traditional counterparts. For rich consumers in Europe willing to pay a bit more, it is easy to focus on hypothetical risks and shun these products. But the next generation of engineered foods, already nearing the marketplace, will have healthful benefits for consumers - fruits that contain cancer-fighting lycopene, for instance - and this will make it harder for European countries to bar all these foods.

During the furor last summer over Zambia's rejection of genetically modified corn, prominent European politicians were forced to declare that these foods were safe - a blatant contradiction of Europe's own policies.

The other tactic is outreach to the developing world. In the poorest nations, agriculture provides the livelihood of most of the population, and agricultural research proves that genetic engineering can make crops that poor farmers grow both healthier and more productive.

Yet research on engineered crops and support for farmers who grow them lack money, not only in U.S. agricultural development and extension programs but also at the international agricultural research centers that were the engine of the first green revolution. In the last decade American support for international agricultural research has declined considerably.

An American program that would finance agricultural research on novel uses for genetically modified crops in developing countries would help those countries and could eventually help open European markets.

An American-led effort to pry open those markets would backfire. But one led by a developing country could succeed, as Europe considers the moral issues posed by barring food from a country which needs to sell its crops to survive. So far, few developing countries (South Africa is one exception) allow commercial planting of engineered crops. The United States needs to overcome the fears of the developing nations by growing such crops there and demonstrating how they could transform agriculture.

Since the Iron Curtain came crashing down, American and Russian diplomats have been searching for a special relationship between their countries to replace Cold War animosity.

Security matters have not yielded much. On issues such as the expansion of Nato, stabilising Yugoslavia and the war in Chechnya, the two have sought each other's tolerance more than co-operation. Nor have the two nations developed much economic interaction, as a result of Russia's weak institutions and faltering economy. Thus, by default, "energy" has become the new special topic in Russian-American relations.

This enthusiasm is misplaced, however. A collapse of oil prices in the aftermath of an invasion of Iraq may soon lay bare the countries' divergent interests. Russia needs high oil prices to keep its economy afloat, whereas US policy would be largely unaffected by falling energy costs. Moreover, cheerleaders of a new Russian-American oil partnership fail to understand that there is not much the two can do to influence the global energy market or even investment in Russia's oil sector. The focus on oil has also eclipsed another area in which US and Russian common interests could run deeper: nuclear power. Joint efforts to develop new technologies for generating nuclear power and managing nuclear waste could result in a huge payoff for both countries. These issues, which are the keys to keeping nuclear power viable, are formally on the Russian-American political agenda, but little has been done to tap the potential for co -operation. Given Russia's scientific talent and the urgent need to reinvigorate nuclear non-proliferation programmes, a relatively minor commitment of diplomatic and financial resources could deliver significant long-term benefits to the United States.

On the surface, energy co-operation seems a wise choice. Russia is rich in hydrocarbons and the US wants them. Oil and gas account for two-fifths of Russian exports. Last year, Russia reclaimed its status, last held in the late 1980s, as the world's top oil producer. Its oil output this year is expected to top eight million barrels per day and is on track to rise further. Russian oil firms also made their first shipments to US markets last year - some symbolically purchased as part of US efforts to augment its strategic petroleum reserve. In addition, four Russian oil companies are preparing a new, large port in Murmansk as part of a plan to supply more than 10 per cent of total US oil imports within a decade.

Meanwhile, the US remains the world's largest consumer and importer of oil. This year, it will import about 60 per cent of the oil it burns, and the US Energy Information Administration expects foreign dependence will rise to about 70 per cent by 2010, and continue inching upwards thereafter. Although the US economy is much less sensitive to fluctuations in oil prices than it was three decades ago, diversification and stability in world oil markets are a constant worry.

War jitters and political divisions cast a long shadow over the Persian Gulf, source of one-quarter of the world's oil. In Nigeria, the largest African oil exporter, sectarian violence periodically not only interrupts oil operations but also sent Miss World contestants packing last year. A scheme by Latin America's top producer, Venezuela, to pump up its share of world production helped trigger a collapse in world oil prices in the late 1990s and ushered in the leftist government of President Hugo Chavez. Last year, labour strikes aimed at unseating Mr Chavez shut Venezuela's ports and helped raise prices to more than US$ 30 (HK$ 234) a barrel. Next to these players, Russia is a paragon of stability.

The aftermath of a war in Iraq would probably provide a first test for the shallow new Russian-American partnership. Most attention on Russian interests in Iraq has focused on two issues: Iraq's lingering Soviet-era debt, variously measured at US$ 7 billion to US$ 12 billion, and the dominant position of Russian companies in controlling leases for several Iraqi oilfields. Both are red herrings. No company that has signed lease deals with Saddam Hussein's government could believe those rights are secure. Russia's top oil company, Lukoil, knew that when it met Iraqi opposition leaders in an attempt to hedge its bets for possible regime change. (Saddam's discovery of those contacts proved the point: he cancelled, then later reinstated, Lukoil's interests in the massive Western Kurna field.)

Russian officials have pressed the US to guarantee the existing contracts, but officials have wisely demurred. There would be no faster way to confirm Arab suspicions that regime change is merely a cover for taking control of Iraq's oil than by awarding the jewels before a new government is known and seated.

Of course, the impact of a war on world oil supply and price is hard to predict. A long war and a tortuous rebuilding process could deprive the market of Iraqi crude oil (about two million barrels a day, last year). Damage to nearby fields in Kuwait and Saudi Arabia could make oil even more scarce. And already tight inventories and continued troubles in Venezuela could deliver a "perfect storm" of soaring oil prices.

The most plausible scenario, however, is bad news for Russia: a brief war, quickly followed by increased Iraqi exports, along with a clear policy of releasing oil from America's reserves to deter speculators. A more lasting Russian-American energy agenda would focus on subjects beyond the current, fleeting common interest in oil. To find an area in which dialogue can truly make a difference, Russia and the US should look to the subject that occupied much of their effort in the 1990s, but that both sides neglected too quickly: nuclear power.

With the end of the Cold War, the two nations created a multi-billion-dollar programme to sequester Russia's prodigious quantities of fissile material and nuclear technology. The goal was to prevent these "loose nukes" from falling into the hands of terrorists or hostile states.

The Co-operative Threat Reduction programme also included funds to employ Russian scientists through joint research projects and academic exchanges.

Inevitably, it has failed to meet all its goals. In a country where central control has broken down and scientific salaries have evaporated, it is difficult to halt the departure of every nuclear resource. Nor is it surprising that US appropriators have failed to deliver the billions of dollars promised for the collective endeavour. Other priorities have constantly intervened, and Russia's uneven record in complying with arms control agreements has made appropriation of funds a perpetual congressional battle. Various good ideas for reinvigorating the programme have gone without funding and bureaucratic attention - even in the post-September 11 political environment, in which practically any idea for fighting terrorism can get money.

Russia has opened nuclear waste encapsulation and storage facilities near Krasnoyarsk, raising the possibility of creating an international storage site for nuclear waste. This topic has long been taboo, but it is an essential issue to raise if the global nuclear power industry is to move beyond the inefficiencies of small-scale nuclear waste management.

Russia should also be brought into worldwide efforts to design new nuclear reactors. The global nuclear research community, under US leadership, has outlined comprehensive and implementable plans for the next generation of fission reactors. The Russian nuclear programme is one of the world's leaders in handling the materials necessary for new reactor designs. Yet Russia is not currently a member of the US government-led Generation IV International Forum, one of the main vehicles for international co-operation on fission reactors and their fuel cycles. Top US priorities must include integrating Russia into that effort, endorsing Russia's relationships with other key nuclear innovators (such as Japan), and delivering on the promise made at last summer's G8 meeting of leaders of the world's biggest economies - to help Russia secure its nuclear materials.

For opponents of nuclear power, no plan will be acceptable. But the emerging recognition that global warming is a real threat demands that nations develop serious, environmentally friendly energy alternatives. Of all the major options available today, only nuclear power and hydroelectricity offer usable energy with essentially zero emissions of greenhouse gases.

Neither government should be naive about the sustainability of this endeavour. Russia is not an ideal partner because its borders have been a sieve for nuclear know-how and because its nuclear managers are suspected of abetting the outflow. Thus, plans for nuclear waste storage, for example, must ensure that they render the waste a minimal threat for proliferation. The US must also be more mindful of Russian sensitivity to co-operation on matters that, to date, have been military secrets.

Another difficult issue that both nations must confront is Russia's relationship with Iran. A perennial thorn in ties, Russia's nuclear co -operation with officials in Tehran owes much not just to Iranian money but to the complex relationship between the two countries over drilling and export routes for Caspian oil. This link to Iran cannot be wished away, as it is rooted in Russia's very geography. Any sustainable nuclear partnership between the US and Russia must develop a political strategy to handle this reality.

The world, including the US, needs the option of viable nuclear power. Yet Russia's talented scientists and nuclear resources sit idle, ready for action.