Transcript GMO CASE - International Trade Relations -

GMO CASE
Approval and Marketing of
Biotech Products
DS 291, 292, 293
ITRN 603 - INTERNATIONAL TRADE RELATIONS
BY JITKA SLADKA
HENNAH S. SHAMI
RAMIN SEDDIQ
INTRODUCTION OF THE GMO
CASE
• On May 13 2003, the US together with Canada
requested consultations with the EC concerning
certain measures implemented by the EC and its
member states affecting imports of agricultural
and food imports from the US and Canada.
• On May 14 2003, Argentina followed the US and
Canada and also requested consultations with the
EC on the same matter.
Source: www.wto.org
COMPLAINANTS’ STATEMENT
• Each country stated that regarding EU measures, the
moratorium implemented in October 1998 on the
approval on biotech products has restricted the
imports of agricultural and food products.
• Complainants also said that a number of EU member
states maintain national marketing and import bans
on biotech products even though those products
have already been approved by European Union.
Source: www.wto.org
HISTORICAL CONTEXT
• In 1998 across Europe, there was increasing public
opposition to GM crops and food
• A number of member states were concerned about
uncertainty and had used a clause in the Deliberate
Release Directive allowing a member states to ban a
GMO from its territory if it has new or additional
evidence of harm to the environment or human
health.
Source: http://www.genewatch.org/sub-531218
HISTORICAL CONTEXT
•
1)
2)
3)
The EU member states that created what became
known as the moratorium called for a number
issues to be addressed:
Clarity of rules in licensing of GMOs and GMO
products
Due to the inability to give an assurance of safety,
a facility that can immediately remove any
product from the market place when hazard arise
A comprehensive labelling system to inform
consumers about the GMO product.
Source: http://www.genewatch.org/sub-531218
WTO ISSUES
Complainants claimed that the moratorium violated
provisions of the WTO agricultural, technical barriers
to trade (TBT) and sanitary/phytosanitary
(SPS)agreements, as well as the GATT.
According to the US, the measures appear to be
inconsistent with the EC’s obligations under:
• Articles 2, 5, 7, and 8, and Annexes B and C of the
SPS Agreement
• Articles I, III, X and XI of the GATT 1994
• Article 4 of the Agriculture Agreement
• Articles 2 and 5 of the TBT Agreement
Source: www.wto.org
WTO ISSUES
According to Canada, the measures appear to be
inconsistent with the EC’s obligations under:
• Articles 2.2, 2.3, 5.1, 5.5, 5.6, 7, and 8, and Annexes B and C
of the SPS Agreement
• Articles 2.1, 2.2, 2.8, 5.1, and 5.2 of the TBT Agreement
• Articles I:1, III:4, X:1 and XI:1 of the GATT 1994
• Article 4.2 of the agriculture Agreement
Canada also thinks that the measures at issues nullify or
impair benefits accruing to Canada in the sense of Article
XXIII:1(b) of the GATT 1994.
Source: www.wto.org
WTO ISSUES
According to Argentina, the measures appear the be
inconsistent with the EC’s obligations under:
• Aritcles 2, 5, 7, 8 and 10, and Annexes B and C of the
SPS Agreement
• Articles I, III, X and XI of the GATT 1994
• Article 4 of the Agriculture Agreement
• Articles 2, 5 and12 of the TBT Agreement
Source: www.wto.org
Sanitary and
Phytosanitary
Measures (SPS)
Regulates measures that
deal with the use of
additives, contaminants,
toxins, and disease-carrying
organisms in food,
beverages and feeds-stuffs.
SPS
1) Be no more trade restrictive than required to
achieve an appropriate level of protection,
2) Be applied only to the extent necessary for
the protection of human and animal health
3) Be based on “scientific principles” and
“sufficient scientific evidence,”
4) Be based on a risk assessment,
5) Meet the requirements of the Chapeau, and
6) Meet the obligation to at least consider
adopting international, rather than unilateral,
SPS standards.
Source: Carlarne, 306
Position of Party 1
Complaints by the United
States (WT/DS291),
Canada (WT/DS292) and
Argentina (WT/DS293).
Canada and Argentina lodged analogous
complaints with regards to the de facto
moratorium.
Canada
• Did not allege a violation of Annex C(1)(b).
• Alleged a violation of Article 5.6 (requires that
sanitary or phytosanitary measures be no more
trade-restrictive than necessary).
Argentina
• Did not allege an EC violation of Annex C.
• Additional claim that EC breached its obligations
under Article 10.1, (requires that Members “take
account of the special needs of developing
country Members.”)
Source: Thomison, fn 46.
United States, Argentina, and
Canada
• Represented 96 percent of the
world's acreage of genetically
modified or transgenic crops in 2002.
• U.S. State Department declared that
by 2002 the U.S. had lost $300 million
in sales of genetically modified corn
and soy products alone.
Source: Thomison fn. 4
U.S. Complaints (1-3)
1.
2.
3.
EC’s failure to approve any GMO products
between October 1998 and August 2003
constituted a de facto moratorium on
product approval.
With this moratorium, the EC had violated its
obligations to the WTO and specifically had
failed to adhere to the standards required by
the SPS Agreement.
EC violation of Article 5.1 (requires that SPS
measures be based on a risk assessment)
thus the EC was also in violation of Article 2.2
(requires that measures be “based on
scientific principles/scientific evidence” and
limited to the extent necessary to protect
human, animal or plant life or health.
Source: Thomison, 295
US Complaints (4-7)
4.
5.
6.
7.
Moratorium  violation of Article 5.5 (prohibits
“arbitrary/unjustifiable distinctions if such
distinctions result in discrimination or a disguised
restriction on trade.”) Thus, EC was also in violation
of Article 2.3 (forbids application of SPS measures
“in a manner which would constitute a disguised
restriction on trade.”)
Moratorium had not been enacted into law 
violation of Annex B(1) and Annex C(1)(b) (require
all SPS regulations to be published promptly).
Moratorium represented an outright violation of
Annex C(1)(a) (no “undue delay and treatment in
a no less favorable manner for imported products
than for like domestic products.”)
U.S. also alleged that a number of EC productspecific measures violated WTO treaty obligations.
Source: Thomison, 295
European Community Position
• The EC contended that the U.S. treated
the international trade of GMO products,
as it was exclusively a WTO legal issue
barring all other international trade laws.
• The EC argued that in the similar case of
the U.S.-Shrimp decision, the WTO panel
also relied upon other internal treaties
and agreements.
Source: http://www.ciel.org/Publications/BIICL_ECBiotech_7Jun07.pdf
European Community Position
• Treaties which the Panel referred to
when deciding upon the U.S.-Shrimp
case:
– 1992 Convention of Biological Diversity
– 2000 Cartagena Protocol on Biosafety
Source: http://www.ciel.org/Publications/BIICL_ECBiotech_7Jun07.pdf
European Community Position
• Article 31 (3) C of the Vienna Convention
states that the panel should refer to any
relevant international law rulings.
• However, the panel narrowly applied this
article in the GMO case because it only
looked at the rulings that were ratified by
all WTO Members.
• Many argue that this type of WTO panel
ruling, leads to fragmentation for the
international trading system and does not
promote open dialogue.
Source: http://www.ciel.org/Publications/BIICL_ECBiotech_7Jun07.pdf
European Community Position
• The EC also argued that the definitions
and effects of toxins, additives,
containments, and pests were narrowly
defined by the complaining parties as
described in the SPS agreements and
codex standard 193.
• Also, the EC argued that under Article 5.1
of the SPS agreement, it is important to
note that “measures be based on
assessments.” Therefore, assessments are
not binding laws.
Source: http://trade.ec.europa.eu/doclib/docs/2005/february/tradoc_121552.pdf
European Community Position
• The EC claimed in their written submissions
that under the risk assessment guidelines
there are three spheres: scientific, risk
management, and risk communication.
• The EC argued that the U.S., Argentina
and Canada narrowly applied the “risk
assessment” implications in the SPS
agreements.
Source: http://trade.ec.europa.eu/doclib/docs/2005/february/tradoc_121552.pdf
Panel Decision
• On July 12, 2004 the panel told the DSB
that it would not be able to submit a
report in six month.
• Due to the scientific difficulty and the
Panel was not able to complete its
report until September 29, 2006
Source: www.wto.org
Panel Decision
• The panel found that the EC applied a
general de facto moratorium on the
approval of biotech products from June
1999 to August 2003.
• Thus, by acting this way the European
Communities were inconsistent with its
obligations under Annex C(1)(a), first
clause, and Article 8 of the SPS Agreement
because the de facto moratorium led to
unnecessary delays in the completion of
EC approval procedures.
Source: www.wto.org
Panel Decision
• In regards to safeguard measures the
Panel found that the EC was inconsistent
with its agreements in article 5.15.1 and
2.2 of the SPS Agreement with regard to
all of the safeguard measures at issue.
• The panel concluded this because, of
the fact that the EC did not base their
measures on risk assessment procedures
outlined in the SPS Agreement and
therefore lacked scientific validation.
Source: www.wto.org
Panel Decision
• However on in regards to Article 5.1,
5.5 and 2.2 of the SPS Agreement ,
concerning any of the products
involved, the panel found that the
EC did not act inconsistently with it’s
obligation.
• The panel adopted its reports on
November 21, 2006.
Source: www.wto.org
Since the Panel’s Decision
• EC approval of a relevant biotech
product application after the inception
of the dispute brought an end to the de
facto moratorium  Panel refrained
from making any recommendations on
the matter of the moratorium.
• Panel Recommendations (request to
conform)
-Prod.-spec. measures Article 8 &
Annex C(1)(a)
-National safeguard measures 
Articles 5.1 & 5.7
Source: Thomison, 307
Since the Panel’s Decision
• All parties agreed that reasonable
period of time for EC to implement
DSB recommendations/rulings shall
be 12 months from adoption of the
panel reports.
• November 21  deadline for the EU
to implement the WTO decision.
• Administration/USTR - under pressure
from members of Congress to ensure
that victory in the WTO case will
translate into actual market access.
Source: WTO
INTERNATIONAL INTEREST
• Expressing the support of this case by joining it as a third
parties included:
Australia, Brazil, China, Chile, Colombia, El Salvador,
Honduras, India, Mexico, New Zealand, Norway, Peru,
Thailand and Uruguay
• Several WTO members registered as a third party in this
dispute - including developing countries that have an
interest in keeping certain flexibility in how the GM imports
will be regulated.
But
- El Salvador and Honduras have not requested third party
status
- A number of countries like Peru, Australia and New
Zealand maintain in their legislation restiction on GMOs
and their approval.
Source: http://www.genewatch.org
INTERNATIONAL INTEREST
• The ruling of this case will likely be considered as a
precedent by future WTO panels ruling on food
safety, public health and environmental health issues
applied to international traded products.
• Developing countries, which don’t have regulatory
regimes for GMOs, will be particularly affected by the
ruling.
• The result of the case could also impact the
regulation for other industries (chemical, etc.)
Source: http://www.tradeobservatory.org/library.cfm?refid=76644
Implications for the Global Trading
System
Cartagena Protocol vs. WTO
• Safe transfer,
handling and use
of LMOs (GMOs).
• Primary purpose:
biodiversity
protection.
• U.S. is not a party.
• Precautionary
principle-EC
defense
• Promotes trade
liberalization/dimin
ish impediments to
free trade.
• Sound science
and risk
assessments-U.S.
defense.
Implications for the Global
Trading System
• Panel decision includes wild plant and
animal life within the scope of the SPS
Agreement  SPS likely to appear
more often on WTO scene as
instrument for attacking disputed
health & Envtl. protection measures.
• Public opinion on GMOs in EU vs. U.S.
• Cloning and the Biotechnology
debate.
OUR PROPOSAL
• We agree with the fact that the EC
was in violation of the stated WTO
article, however we feel as though a
nation should not be forced to
import GMOs into their territory.