EC-Biotech: Overview and Analysis of the Panel’s Interim Reports

Executive Summary

On February 7, 2006, a Dispute Settlement Panel at the World Trade Organization (WTO) issued the interim report in the European Communities – Measures affecting the Approval and Marketing of Biotech Products (EC-Biotech) case. Interim reports in the WTO contain all of the elements of a final report, but are released only to the parties to the dispute. This tendency towards secrecy and a closed-door approach is endemic to dispute settlement in the trade sector and has permitted the misrepresentation of the findings of the WTO Panel. The lack of transparency is particularly worrisome in cases where public health and the environment are at stake. As of this writing, the EC-Biotech report is still officially interim and secret, but has been made available to the public by Friends of the Earth Europe, which obtained a leaked report.

The objective of the present note is to provide an overview of the main findings and reasoning in the Panel’s Interim Report. In its report, the Panel addressed the various categories of European Communities (EC) and EC Member State measures challenged by the United States, Canada, and Argentina, and found each type of measures was – at least in certain respects – inconsistent with WTO rules. The measures in question were categorized into three types: an alleged EC moratorium on approvals of biotech products, product-specific EC measures related to the approval of biotech products, and measures related to the import and/or marketing of specific biotech products. The Panel found most of the challenged measures to fall under the scope of the Agreement on Sanitary and Phytosanitary Measures (SPS Agreement), an agreement with much more stringent risk assessment and science requirements than other agreements under the WTO such as the General Agreement on Tariffs and Trade (GATT) or the Agreement on Technical
Barriers to Trade (TBT Agreement) that could also have been found applicable.

First, the Panel concluded that the general de facto moratorium and product-specific measures affecting product approval had resulted in a failure to complete individual approval procedures without undue delay, and hence gave rise to an inconsistency with Article 8 and Annex C of the SPS Agreement. The Panel did not find the general moratorium to be substantive SPS measures subject to the science and risk assessment provisions of the SPS Agreement. Rather, the Panel regarded these measures collectively to be a procedural decision to avoid making final decisions about product approvals, and thus subject only to the SPS procedural requirement not to cause “undue delay” in the approval procedure for biotech products. Although the Panel found there were no legitimate reason or justification for the delay in the present case, it also considered that
the decision to delay the completion of approval procedures by imposing a general
moratorium on final approvals of biotech products might be justifiable in other cases.

Second, the Panel found that the measures taken by some EC Member States restricting the import, use, and marketing of certain biotech products – safeguard measures taken in relation to products already approved at the EC level – failed to meet the requirements of the SPS Agreement. In particular, the safeguard measures were found to be inconsistent with the obligation for SPS measures to be based on a risk assessment. The Panel found that the safeguard measures fell outside the scope of Article 5.7 of the SPS Agreement, Center for International Environmental Law (CIEL) March 2006 which allows members to adopt provisional SPS measures where relevant scientific evidence is insufficient. The scientific evaluation of the products at issue at the European level, which all Parties agreed constituted risk assessments under the SPS Agreement, had, in the view of the Panel, proved that scientific evidence was “sufficient.” Moreover, because this scientific evaluation had resulted in the approval of the products – it could not justify measures to restrict them. Other scientific evidence presented by EC Member States was considered not to meet the characteristics of a risk assessment under the SPS Agreement. As a result, the safeguard measures were found not based on a risk assessment as required by Article 5.1 and thus were found inconsistent with the SPS Agreement.

Finally, the Panel rejected the EC’s argument that the Panel should take the 1992 Convention on Biological Diversity (CBD) and the 2000 Cartagena Protocol on Biosafety (Biosafety Protocol) into account when interpreting the relevant WTO rules in this specific case. The Panel found that according to the Vienna Convention on the Law of Treaties it did not have the obligation to take these treaties into account when interpreting WTO rules since not all parties to the dispute were parties to the CBD and the Biosafety Protocol. Moreover, the Panel indicated, without taking a definitive position, that the Vienna Convention’s obligation to take other agreements into account when interpreting WTO rules might only come into play in situations where all WTO Members are parties to the other agreement. The Panel also noted, however, that while there was no obligation to take into account other agreements, panels were nevertheless free to take into account other relevant agreements when wishing to do so. In this case, however, the Panel, without much explanation, concluded that it was not useful to take the CBD or the Biosafety Protocol into account.


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