The Cartagena Biosafety Protocol and the WTO agreements
The relationship between the Cartagena Protocol on Biosafety and the WTO
agreements has yet to be settled. The following article examines how the WTO agreements impact on biosafety and the Cartagena Protocol.
THE Cartagena Protocol on Biosafety was negotiated amidst strong threats from major exporting countries that it would violate trade rules at the World Trade Organisation (WTO). While the relationship between the Protocol and other international agreements is not definitively addressed in the Protocol, its substantive provisions are consistent with WTO obligations.
Many developing countries are now in the process of developing their national biosafety frameworks. As they do so, the politics and controversies surrounding genetic engineering continue. Numerous developing countries are facing intense pressure to formulate national biosafety frameworks that facilitate biotechnology development and acceptance, without the necessary biosafety considerations in place. Developing countries are also concerned to ensure that their biosafety regulations are trade consistent, so that they would not face the threat of a World Trade Organisation (WTO) complaint, as has happened to the EU.
The complaint against the EU at the WTO
The US, Canada and Argentina have submitted a complaint to the WTO over the EU’s authorisation system for GMOs. On 29 August 2003, a WTO panel was automatically established after second-time requests from the three countries. This followed earlier ‘consultations’ and a first-time request for consultations by the US. Uruguay, Peru, Chile, Australia, Norway, Thailand, Taiwan, Honduras, El Salvador, Colombia, China and New Zealand have expressed their third-party interest in this case.
Specifically, the complaint is related to the alleged failure by the EU to consider for approval pending applications for specific biotech products; and the national marketing and import bans maintained by some EU member states, despite the Community approval of these products already in the EU. Thus they are not complaining about the EU biosafety standards per se (no application has yet been rejected by the EU), but that the EU seems not to comply with its own approvals procedure.
The EU has reiterated that the approval of GMOs is perfectly possible in the EU, that a number of applications are presently being examined, and that decisions on pending applications will be taken within a reasonable timeframe in accordance with relevant procedures. It will try to show that all application procedures are on track, that it has played by its own rules and that any delays were due to the companies not giving the data required (as one can always ask for new or additional information to ‘stop the clock’ as is the case with the Cartagena Protocol, too).
While the complaint against the EU, and its wider implications for global biosafety regulation have yet to fully play out, it is instructive to examine in more detail how the WTO and its relevant agreements impact on biosafety and the Cartagena Protocol.
Dispute settlement at the WTO
A dispute (such as the complaint against the EU) arises when one country adopts a trade policy measure or takes some action that one or more fellow-WTO members considers to be breaking the WTO agreements, or to be a failure to live up to WTO obligations.
Dispute settlement among the WTO’s 146 members (comprising countries and custom territories) is one of the roles of the WTO. The WTO has a compulsory, binding, effective dispute settlement mechanism, which also allows members to impose, under certain circumstances, trade sanctions.
When a complaint is first received the parties concerned hold consultations. If these fail, the complainant may request the composition of a panel, normally comprised of trade experts. Parties have to agree on three (possibly five) members. Written submissions are required before a first hearing, in which oral arguments are made and rebutted. If one side raises scientific or technical matters, the panel may consult experts or appoint an expert review group for advice. The panel’s report becomes the ruling or recommendation of the WTO’s Dispute Settlement Body (DSB) unless a consensus rejects it.
Both sides may appeal the ruling. Each appeal is heard by three members of a permanent seven-member (usually comprising lawyers) Appellate Body. Appeals have to be based on points of law such as legal interpretation and cannot re-examine existing evidence or examine new issues. The decisions of the Appellate Body become law, unless the whole WTO membership decides to reject the case and refuses to adopt the decision.
What do the WTO agreements allow?
Trade-related measures related to biosafety fall under three WTO agreements – the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS), the Agreement on Technical Barriers to Trade (TBT) and the General Agreement on Tariffs and Trade (GATT) 1994.
The WTO agreements do allow some measures to be taken that are supportive of biosafety, so long as certain criteria are met (see below). These measures may be in the form of an import ban; risk assessment and risk management requirements, i.e. use restrictions; and identification and labelling requirements. Before putting into place new domestic rules, a member is obliged to notify the WTO, which will circulate the new rules to other members for comments.
The SPS Agreement regulates sanitary and phytosanitary measures that will affect trade, provided it is with respect to protecting plant, animal and human health. It sets out the basic rules on food safety and animal and plant health standards, allowing measures that will protect from pests, diseases, disease-causing and disease-carrying organisms, toxins, additives, contaminants, etc.
The SPS Agreement allows countries to set their own standards, so long as the regulations are based on science, are applied only to the extent necessary to protect human, animal or plant life or health, and do not arbitrarily or unjustifiably discriminate between countries where identical or similar conditions prevail. WTO members are encouraged to use international standards, guidelines and recommendations where they exist, although they may use measures that result in higher standards, if there is scientific justification. They can also set higher standards based on appropriate risk assessment as long as the approach is not arbitrary.
The TBT Agreement regulates measures affecting trade which are technical and industrial standards (including packaging, marking and labelling requirements), and that do not fall under the SPS Agreement, i.e. are not sanitary or phytosanitary measures. The TBT Agreement allows for national regulations, which should not be more trade-restrictive than necessary, to fulfil a legitimate objective. Such legitimate objectives are, inter alia: national security requirements; the prevention of deceptive practices; protection of human health or safety, animal or plant life or health, or the environment.
While recognising countries’ rights to adopt the standards they consider appropriate, the TBT Agreement tries to ensure that the regulations, standards, testing and certification procedures (which vary from country to country) do not create unnecessary obstacles. WTO members are not prevented from taking measures necessary to ensure their standards are met. In order to prevent too much diversity, the agreement encourages countries to use international standards where these are appropriate, but does not require them to change their levels of protection as a result.
Which agreement applies?
There is a hierarchy to the agreements, with GATT 1994 being the more general and overarching, the TBT Agreement less so, and the SPS Agreement the most specific. So which agreement would apply to a trade-related measure for biosafety would depend on the objective of that measure. For example, in the case of labelling genetically modified foods, if the policy objective is to protect human health, the measure would fall under the purview of the SPS Agreement, which is the most specific agreement and deals with plant, animal and human health protection.
If a measure’s objective is to inform the consumer, as in the case of the EU labelling law, it would fall under the TBT Agreement. (The EU’s labelling laws deal with information to consumers and have nothing to do with risk, as this is already addressed by other components of its biosafety regime.) Next we have to ask if the regulation serves the purposes of what the TBT Agreement allows.
If a measure does not fall specifically under the TBT Agreement, it would still have to comply with GATT 1994, which provides for similar exceptions as for the SPS and TBT Agreement, i.e. Article XX of GATT 1994 allows Member governments to act on trade in order to protect human, animal or plant life or health, provided they do not discriminate or use this as disguised protectionism.
Non-discrimination, ‘like’ products and least restrictive trade measures
Any trade-related measure on biosafety thus has to comply with both specific and general trade law standards. The measure has to be justified by a rational policy purpose, e.g. to protect human life or health, or to prevent deceptive practices. GATT 1994 also has a provision on biodiversity conservation. But any measure needs to meet the non-discrimination provision and must not be more trade restrictive than necessary.
A key trade principle that operates in the WTO is that of non-discrimination. For example, members should not apply a measure that would constitute a means of arbitrary or unjustifiable discrimination between countries. So biosafety laws that have trade-related measures should not distinguish between different member countries, i.e. an importing country concerned about GMO imports cannot ban products from, for example, the US but allow for the import of the same products from, for example, the EU.
Members should also not discriminate indirectly – products should not be accorded less favourable treatment than ‘like’ products. There is considerable case law as regards the issue of ‘like’ products. The question here is whether one may differentiate between GMOs and conventional products, between, for example, GM soybean oil where the GM DNA is not detectable (but may have higher toxicity levels because of genetic modification) and non-GM soybean oil.
The WTO has thus developed tests to determine if a product is ‘like’ to another. The criteria considered are physical properties; the extent to which the product is able to serve the same or similar end uses; and the international classification of products for tariff purposes. These criteria applied to some of the GM products would imply that they are alike to conventional products (e.g. GM soybean oil could be considered as being ‘like’ conventional soybean oil).
But WTO panels have insisted on a fourth criterion for the test which determines whether a product is like another product or not – the extent to which consumers perceive the product as different. This implies that consumer perception is of considerable importance when it comes to deciding whether a product is different from or alike another product. If the product is alike to another, with no physical difference, but if consumers perceive it as different, then under WTO law members may treat it as different. This implies that members can treat GM soybean oil differently from conventional soybean oil. This could be demonstrated by data showing that consumers do view the products differently, for example, through opinion polls and surveys.
With regard to bans on GMOs, if the case is brought to the WTO, a question that will be asked is if it is the least trade restrictive measure. If one can argue that a ban is necessary because there is, for example, a serious risk to human health, and back that up with scientific evidence, then that should be WTO consistent. However, if the objective is to protect consumers’ right to know, the WTO may conclude that labelling is a less strict measure than a ban.
Precautionary Principle
To what extent are the WTO agreements and the Cartagena Protocol different when it comes to the application of the Precautionary Principle? Both sets of rules require some scientific evidence as it is impossible to claim a risk if there is not the slightest scientific hint of such risk. However, in order to ban a GMO, it is not necessary to prove a causal link between the GMO and specific damage.
The SPS Agreement allows members to apply to some extent the Precautionary Principle in the case of scientific uncertainty, as Article 5.7 allows temporary precautionary measures:
‘In cases where relevant scientific evidence is insufficient, a Member may provisionally adopt sanitary or phytosanitary measures on the basis of available pertinent information, including that from the relevant international organisations as well as from sanitary or phytosanitary measures applied by other Members. In such circumstances, Members shall seek to obtain the additional information necessary for a more objective assessment of risk and review the sanitary or phytosanitary measure accordingly within a reasonable period of time.’
The SPS Agreement does not say that a Member needs a specific safety standard – every Member is free to set its own level of food safety – but this has to be based on a scientific risk assessment. If it is found that there is uncertainty, a Member may take a decision to ban this product. However, the decision has to have a rational basis and it has to be non-discriminatory.
The differences between the WTO agreements and the Protocol on the Precautionary Principle are of a rather formal nature. Under the WTO if a Member bans a GMO, because of suspicion of risk, it has to continually review this decision. The Cartagena Protocol, however, does not postulate such automatic review but requires its State Parties to review their decision in the light of new data at the request of the notifier.
WTO and Biosafety Protocol: which predominates?
The WTO agreements were adopted before the Cartagena Protocol was adopted and entered into force. Under the usual rules of treaty interpretations, one could argue that the Protocol as a more specific agreement, and a more recent law, overrules the WTO agreements.
However, due to the compromises made during the Protocol’s negotiations, the language in relation to the Protocol’s relationship with other international agreements is contradictory. While the Protocol does not address this issue in its substantial provisions, the Preamble of the Protocol emphasises on the one hand that the Protocol shall not be interpreted as implying a change in the rights and obligations of a Party under existing international agreements and on the other, states that this is not intended to subordinate the Protocol to other international agreements. The Protocol also states that trade and multilateral environmental agreements should be mutually supportive. The concessions mean that the ‘special law rule’ does not apply in this case, nor the rule that a more recent law takes precedence.
Thus, the relationship between the Protocol and other international agreements is not really addressed. It is therefore an open question as to the extent to which the WTO will take into account the Cartagena Protocol. At the same time, the Compliance Committee that will be set up at the first Meeting of the Parties to the Protocol in February will be important in overseeing the implementation of the objectives and principles of the Protocol.
The above is the text of a Working Paper by Third World Network coordinated by Lim Li Ching.