European Communities –
Measures Affecting the Approval and Marketing of Biotech Products
Lim Li Ching
Third World Network
The Case
Three countries – the US, Canada and Argentina – have submitted a complaint to the World Trade Organization (WTO) over the European Union’s (EU, or European Communities, EC, as they are known in the WTO) authorisation system for genetically modified organisms (GMOs). The complaint is with respect to EC measures affecting the approval and marketing of GMOs and products derived from GMOs.
Third party interests have been expressed by Uruguay, Peru, Chile, Australia, Norway, Thailand, Taiwan, Honduras, El Salvador, Colombia, China and New Zealand. These countries have an interest in the outcome of the case.
The Process
A dispute (such as the complaint against the EC) arises when one country adopts a trade policy measure or takes some action that one or more fellow-WTO members consider 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. First-time requests for consultations in this case were submitted on 13 May 2003. A WTO dispute settlement panel was automatically established on 29 August 2003 after second-time requests (i.e. after the consultations failed).
A WTO dispute settlement panel usually consists of trade experts, who are agreed upon by all parties. In this case, a three-member panel was established, chaired by Christian Haberli, Head of International Affairs at the Swiss Federal Office for Agriculture. He is assisted by Mohan Kumar, former Indian diplomat in Geneva, and Akio Shimizu.
Written submissions were submitted, and hearings held, where oral arguments were made and rebutted. The EC subsequently requested for an expert panel to seek advice on technical and scientific issues raised in the dispute. This is because the EC’s defence focused on the scientific uncertainty surrounding GMOs, and their possible risks to human health and the environment.
On the other hand, the US stressed that GMOs pose no additional risks as compared to non-GM crops. It thus argued that appointing scientists and technical experts to provide testimony is unnecessary because the crux of the matter – that the EC refuses to apply its own approval mechanisms for biotech products – is not a scientific issue.
The request for an establishment of an expert panel to advice on technical and scientific issues was granted, which is seen as positive for the EC, in light of its arguments.
The Allegations
In the complaints brought by the US, Canada and Argentina to the WTO’s Dispute Settlement Body over the EC measures affecting the approval and marketing of GMOs and products derived from GMOs, the complainants allege that the EU had a de facto moratorium that resulted in “undue delay” in the regulatory structure dealing with GMO authorizations in the EC. The national bans put in place by some EU Member States on specific products have also been challenged.
The Myths and Facts
The case has attracted a lot of interest, but several myths have surrounded it, including that GM crops are banned in the EU, that the complaints are about the EU labelling rules for GM products, and that they question the WTO-compatibility of the whole EU biosafety system.
In actual fact, GM crops are not banned in the EU – 18 GMOs, including GM crops, were authorized before the stop in approvals (1998), for various uses, and since the case was brought, two GMOs have been further authorized in 2004.
The case does not deal with the EU traceability and labelling rules, but is about the authorization procedure and national bans. The case therefore does not touch on whether labelling of GM products is justifiable.
Finally, the complaints do not question the WTO-compatibility of the EU biosafety legislation or if biosafety legislation is legitimate under the WTO.
The Key Issues
The two main issues that are being questioned are whether the EC measures, i.e., the national bans on seven specific GMOs, are based on risk assessments, and whether the EC has unduly delayed its approval procedures regarding GMOs that are pending approval.
Are the EC measures (i.e. the national bans on seven specific GMOs) based on risks assessments?
There is a safeguard clause within EU legislation, which allows Member States, as a result of new or additional information or reassessment of existing information, to provisionally restrict or prohibit the use and/or sale of an authorized GMO or its product, if it constitutes a risk to human health or the environment
The EC argues that these measures are consistent with the SPS Agreement’s provisions on risk assessment, i.e. they are provisional, temporary and based on the precautionary principle, pending a full assessment at the EC level.
The measures are also said to be maintained by the Member States on the basis of available scientific information and in light of insufficient scientific evidence. In past experience, WTO dispute settlement panels have ruled that minority opinions/scientific uncertainty can be considered.
Yet, at the same time, the European Commission has internally argued that the national bans on the specific GMOs are not based on scientific risk assessments, and that the Member States concerned should lift these bans.
Has the EC unduly delayed its approval procedures regarding GMOs that are pending approval?
The EC argues that although it did have previous biosafety legislation, because there was no traceability law in place at the time, the legislative work for biosafety was not concluded. It argues that the delays were provisional and justified on the basis of the insufficiency of scientific evidence and the adaptation of its Directives in light of the evolving science, political and social debate.
The EC also says that its approval process was slow because requests for additional information had been put to the applicants at different stages, which are justified on the basis of risk assessment, risk management and risk communication
Will developing countries with no biosafety system or legislation be able to defend the argument that it is not ready to take a decision on an application? The panel, in considering this case, may cast some light as to what constitutes “undue delay”.
The Right Forum?
The EC argues that GMOs are too complex to be covered by the WTO’s Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) alone, although it concedes that some aspects of its GMO approach fall within the scope of the SPS Agreement. Other aspects of its GMO policies, according to the EC, fall within the purview of the Agreement on Technical Barriers to Trade (TBT), and the General Agreement on Tariffs and Trade (GATT) 1994.
The EC argues that the environmental risks, certain health risks and the conservation of biodiversity – all of which its legislation seeks to address – are not covered by the SPS Agreement, and should instead be properly regulated by the Biosafety Protocol.
It thus urges the Panel to interpret and apply the relevant WTO agreements against the background of relevant norms in international law outside the WTO context.
Other International Fora
There are other international fora where rules and standards relating to biosafety and GMOs have been or are being developed. These include:
Codex Alimentarius Commission, which adopted in 2003 the Codex Principles for the Risk Analysis of Foods Derived from Modern Biotechnology; Codex Guideline for the Conduct of Food Safety Assessment of Foods Derived from r-DNA Plants; and Codex Guideline for the Conduct of Food Safety Assessment of Foods Produced using r-DNA Microorganisms. These recognized that they may be uncertainties and unintended/ indirect/ unanticipated effects of GM foods that have to be taken into account and that safety assessments should be conducted on all GM foods prior to market approval
International Plant Protection Convention, which adopted a standard in April 2004 – Pest Risk Analysis for quarantine pests including analysis of environmental risks and living modified organisms. All GMOs considered potential phytosanitary risk/quarantine pest, until decided otherwise.
World Organisation for Animal Health (OIE), which met recently in May 2005. At that meeting, Members asked the Director General to create an Ad hoc Group on Biotechnology, and for OIE to develop and adopt standards and guidelines for: research and use of vaccines for animals produced through biotechnology; animal health risks linked to cloning; exclusion of unapproved animals and products from livestock population and segregation from feed and food supply; and animals that have been genetically engineered to produce medicines or chemicals.
The above three organizations are recognized as standard-setting bodies by the SPS Agreement, hence presumed WTO-compatible. Countries operationalizing these standards will be shielded from WTO challenges.
Cartagena Protocol on Biosafety, which came into force on 11 September 2003 and has 124 Parties as of July 2005. Its Compliance Committee was established in 2004 and will be important in overseeing the implementation of the objectives and principles of the Protocol.
Which forum?
This case raises several questions that arise in the trade-environment relationship.
• Is the WTO the competent forum to deal with biosafety (and environmental) issues?
• If it is the Biosafety Protocol that should be the international authority dealing with biosafety, how will it deal with non-Parties which are the main GMO exporters? The three complainants in the case – the US, Canada and Argentina – are not Parties to the Biosafety Protocol.
• Given the different international agreements existing that govern trade and environment issues, will there be forum shifting, depending on which forum suits which and whose agenda? The outcomes may depend on where disputes are heard.
• The international regulatory framework and landscape governing biosafety is dynamic and evolving as scientific, political and social debate develops. Can existing trade and environment agreements deal with this?
• 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 substantive 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.
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.
The Current Timeline
Originally, the WTO dispute settlement panel report was due in September 2004. This date was then postponed to March 2005. Then, WTO members were told in November 2004 that the final ruling was meant to be delivered by the end of June 2005. The preliminary ruling of the panel was then postponed to 5 August 2005, and the final report was expected to be available in November 2005. At the end of July 2005, it was announced that the interim report was again delayed given the complexity of the issue and the length of the documents submitted by the parties and the scientific advisory panel to the WTO panel. The interim report is now expected to be available in early October 2005. The final English report will likely be issued only after the Ministerial Conference in December. The translated final report is then expected to be issued to all WTO members and posted on the website in January/February 2006.
What Happens After?
After the final ruling from the dispute settlement panel, both sides may appeal. Each appeal is heard by three members of a permanent seven-member (usually comprising lawyers) Appellate Body. Appeals have to be made on points of law and cannot re-examine existing evidence or examine new issues. Decisions of the Appellate Body become law, unless the whole WTO membership decides to reject the case and refuses to adopt the decision.