Transcript Click to add title - International trade

U.S.-EU Trade Dispute over
Genetically Modified Crops
Presenters: Julia Perez Melendez
David Nelson
David Olave-Delgado
October 15, 2007
Dr. Malawer ITRN 630
Key Points
1. The Issue
2. U.S. Perspective
3. E.U Perspective
4. Panel findings and challenges ahead
The Issue
• In May 2003, the United States (US), Canada
and Argentina initiated a WTO dispute
settlement process against the European Union
(EU), citing an alleged de facto moratorium on
approvals of biotechnology products, as well as
the existence of individual Member State
(Austria, Luxembourg and Italy) marketing and
import prohibitions on previously approved
biotechnology products. According to these
countries these prohibitions were not
scientifically justified and thus contrary to WTO
rules.
US Perspective
Outline of U.S. legal argument-3 parts: The EC instituted a:
1) General Moratorium-violates the SPS Agreement-Core
of the dispute
2) Product-Specific Moratoria-violates the SPS
Agreement
3) EC Member State Measures- violate the SPS
Agreement
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U.S. claims the same violations of the SPS Agreement
in each of the three parts. US only challenges the
provisions in the SPS
The Institute for Agriculture and Trade Policy
US Perspective
• The European Community (EC) has a
moratorium on the import of genetically modified
organisms (GMO’s) which is inconsistent with
the EC’s obligations under the WTO Agreement
• US believes the objective of the EC measures is
the protection of human health, not
environmental protection, and therefore they
violate the Agreement on the Application of
Sanitary and Phytosanitary Measures (SPS).
US Perspective
Sanitary and Phytosanitary Agreement (SPS)
• Must have a scientific justification. When existing
scientific evidence is insufficient, members may adopt
measures on the basis of available information, but must
obtain additional information to objectively ground their
assessment of risk within a reasonable period of time.
• The SPS Agreement permits countries to protect public
health within their borders so long as they do so in a
manner that restricts trade as little as possible.
• The US does not object to the EC maintaining an
approval system for biotech products –but the procedures
under that system must be undertaken and completed
“without undue delay.”
Source: Center for International Development, Harvard University
US Perspective—Economic Impact
• Why Important?-- Impact on American
Agriculture
– 68 percent of total global acreage planted are
biotechnology crops.
• 167 million acres world-wide
– US-world's largest producer of biotechnology
crops-accounts for nearly 2/3’s of all
biotechnology crops
– European Union is the fourth largest market
for U.S. agricultural products
Heritage Foundation
Pew Initiative on Food and Biotechnology
US Perspective—Economic Impact
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US soybean and soy meal exports have
steadily declined over the last ten years
because of a decline of competitiveness of US
agriculture on the global market.
The trends in EU maize imports show that US
farmers are no longer low-cost producers and
are less and less able to compete with
emerging countries such as Brazil or Argentina
on global commodity markets.
Legal Issues-Overview
1) The existence of a moratorium is a violation of the SPS rules against
“undue delay” in SPS agreement approval procedures.
2) Failure to notify the moratorium as an SPS “measure” is a violation of SPS
agreement rules on transparency of rule-making and notification of domestic
SPS measures to the WTO SPS committee.
3) The EC failed to publish risk assessments on the likelihood of harm
resulting from biotech products, as required by article 5.1.
4) The alleged moratoria are maintained without “sufficient scientific
evidence” in violation of article 2.2.
5) By regulating biotech products, such as genetically engineered seeds, more
strictly than biotech processing agents, such as enzymes used in food
manufacturing, the EC violates article 5.5, which seeks to ensure that WTO
members apply SPS measures indiscriminately to domestic and imported
products “in comparable situations.”
The Institute for Agriculture and Trade Policy
Violations of SPS
• Products effected by the EC moratorium have
been positively assessed by the EC’s own
scientific committees-No scientific basis for its
moratorium on approvals
• If the EC has scientific questions about
biotechnology, those questions should be
addressed within the context of the EC’s own
approval system, and in a manner consistent
with its WTO obligations, just like they did before
prior to October 1998.
USTR Oral Statement to WTO DSU Panel
Evidence of a Moratorium
• Up to October 1998, the EC approved more than
ten biotech products.
• After October 1998, the EC suspended approval
procedures. In particular, the EC suspended
consideration of applications for, or granting of,
approval of biotech products under the EC
approval system.
• No biotech product moved to final approval
stage from October 1998 through August 2003.
USTR Oral Statement to WTO DSU Panel
Evidence of a Moratorium
• Moratorium was not in a transparent
manner. Not published in any official
journal or otherwise officially documented.
• Nonetheless, the moratorium is widelyrecognized, including numerous
references to it by leading EC officials.
USTR Oral Statement to WTO DSU Panel
Evidence of a MoratoriumCasual Statements?
• High-Level, EC Officials referencing moratorium:
• 06/99,Council Meeting of EC- Environment Ministers of Denmark,
Greece, France, Italy and Luxembourg issued a Declaration stating:
“regarding the growing and placing on the market of genetically
modified organisms… they will take steps to have any new
authorisations for growing and placing on the market suspended.”
• 07/00, European Environment Commissioner Margot Wallströmpublicly admitted the existence of a “moratorium,” calling it “illegal
and not justified.”
• 06/00 European Commissioner for Health and Consumer Protection,
David Byrne stated that the reluctance of member States to approve
GMO products “has resulted in a complete standstill in the current
authorisations and a de facto moratorium on the commercial release
of GMOs.”
USTR Oral Statement to WTO DSU Panel
Evidence of a MoratoriumCasual Statements?
• High-Level, EC Officials referencing moratorium:
• 11/00- A EC Commission Working Document states “the current
authorization procedure for commercial release of GMOs…has
ground to a standstill.”
• 07/01- EC Commission Press Release states that the adoption of
new legislative proposals “will contribute towards the lifting of the de
facto moratorium on the commercial release of GMOs.”
• 10/01- EC Commission internal working paper states that “[t]his
reluctance to go forward with authorizations of GMOs has resulted in
a de facto moratorium on the marketing of new GMOs”
• 02/03 David Byrne “we must lift the moratorium.”
USTR Oral Statement to WTO DSU Panel
US Perspective
1. Even if there is a moratorium, it is not a
“measure” under the SPS Agreement
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Paragraph 1 of Annex A states:
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Measures include all relevant laws, decrees,
regulations, requirements and procedures. The
use of the word “include” indicates that the
Agreement covers more than just the identified
types of measures, and should be read to include
other measures that may not fit squarely within
the illustrative list.
USTR Oral Statement to WTO DSU Panel
US’s Concerns w/ EU Process
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The US appears not to like the EU authorization
process, which feels is too rigid, because it takes
longer to approve a GMO in Europe than in the US.
The US believes that GMOs that are considered to be
safe in the US should be de facto deemed to be safe
for the rest of the world.
US opposes GMO traceability rules because it
considers that they constitute an obstacle to US
commodity exports, despite the fact that US traders
can in fact meet those requirements without difficulties.
US is opposed to labeling rules for food products
produced from GMOs, even though these rules are
designed to help ensure that customers are wellinformed about what they are buying.
European Community Defense
• Precautionary Principle- A ‘better-safe-thansorry’ philosophy of regulation that has assumed
the status of regional law within the EC.
• Cartagena Protocol- to protect biological diversity
from the potential risks posed by GMO’s. EC contends
should be applicable because it has a more ‘specific’
scope. EC wants to use the Cartagena Protocol to
interpret WTO provisions.
• US-Not a party to Protocol-Only WTO regulations apply.
• EC duties under other international treaties do not
negate EC obligations to the WTO.
*Washington Legal Foundation
European Community Defense
• The European Union stands by their belief that
delays are not “undue,” but provisional, and are
the result of incomplete information pertaining to
risk assessments.
• They claim that no moratorium exists, citing that
no official communication to this effect has ever
been made.
European Community Defense
• The European Union stands by their belief that
delays are not “undue,” but provisional, and are
the result of incomplete information pertaining to
risk assessments.
• They claim that no moratorium exists, citing that
no official communication to this effect has ever
been made.
European Community Defense
• The EU believes that every country has the sovereign right to make
its own decisions on GMOs in accordance with the values of its
society.
• It is the legitimate right of developing countries’ governments to fix
their own level of protection and to take the decisions they deem
appropriate to prevent unintentional dissemination of GM seeds.
• This right is fully recognized in international agreements such as the
Cartagena Protocol on Biosafety which the EU considers to be the
key international agreement governing the transboundary
movements of GMOs.
• The Cartagena Protocol on Biosafety provides an international
forum for the international governance of GMOs.
• Over 130 countries actively participate in the Cartagena Protocol on
Biosafety. The US, Canada and Argentina have refused to ratify it.
• The EU considers that major GMO producers such as the US should
adopt a co-operative approach to the development of a sound
international legal framework for these products.
European Community Defense-Regulatory Framework
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Provides strict monitoring of GM products after their
initial release to market through the implementation of
mandatory labeling and traceability rules.
EU feels this form of regulatory oversight is crucial in
addressing any potential failure of the regulatory
system, such as those that have been experienced in
the US in the recent past when non-approved GMOs
such as Starlink GM maize, or Bt 10 GM maize
entered the US food chain.
EU & GMOs
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The EU has no ban on safe GMOs.
GMOs can only be placed on the market after having
undergone a stringent science-based risk assessment
on a case by case basis.
This procedure is in compliance with international
standards, especially with the Cartagena Protocol on
Biosafety as well as with the relevant Guidelines
adopted by the Codex Alimentarius Commission in
2003 and by the International Conventional on Plant
Protection.
EU & GMOs
• Over 30 GMOs or derived food and feed products have
been approved for marketing in the EU.
• In January 2006, the EU granted approvals to three new
GM maize products after a rigorous safety assessment.
• The EU is one of the largest importers of GMOs and
derived food and feed.
• The EU is the largest soybean and soy meal importer
and the fact is that soy imports consist largely of
Monsanto “Round-Up Ready” soybean, which is
cultivated in all the main soybean global producers, i.e.
the US, Brazil and Argentina.
• The claim that the there is a moratorium on approval of
GM products in Europe is self-evidently untrue.
EU Approval Process
• EU approval process may appear to be lengthy for some
countries which adopt a more relaxed attitude towards
food and environmental safety issues.
• The longer times to assess the safety of GMOs in the EU
are due to the complexity of the science involved as well
as to delays incurred by biotech companies to provide
suitable data demonstrating the safety of the products.
Need for Regulatory Oversight
of GM Technology
• Scientists around the world are in general
agreement that GMOs are not entirely unsafe,
but that they need to be tested/assessed on a
case by case basis before marketing to ensure
the safety of the environment, & human/animal
health needs.
• This methodology is supported by World Health
Organization, the Codex Alimentarius, the FAO
or the OECD.
DISPUTE SETTLEMENT BODY FINDINGS
AND CHALLENGES AHEAD
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Request for Consultations: 13 May 2003
Request for the establishment of a Panel: 7 August 2003
DSB establishes single panel: 29 August 2003
Director General composes Panel: March 4, 2004
Chairman of the Panel informs the DSB that it would not be able to
complete its work in six months
Chairman of the Panel informs the DSB that its final report would
come by the end of March, 2005. Delay was due to the parties’
common request for additional time to prepare rebuttals and
Panel’s decision to seek scientific and technical advise.
Panel delays its final report to June 2005, October 2005, December
2005 and March 2006
Panel Report: 29 September 2006*
DSB adopts panel reports: 21 November 2006
*= Interim report announced to the media in February, 2006
DSB—The Case
• Some of the issues which the panel DID
NOT examine:
– Whether biotech products are safe or not
– Whether biotech products in the dispute are
“like” their conventional counterparts
– The conclusions of the relevant EC scientific
committees regarding the safety evaluation of
specific biotech products…the panel sought
advice from a number of scientific experts
DSB—The Case
• Issues which the panel DID examine
– Whether the EC approval legislation under which the
EC allegedly did not reach final decision is properly
assessed under the SPS Agreement
• FOUND:
– EC procedures set out for the approval of GMOs are
SPS measures within the meaning of the SPS
Agreement.
– The potential risks to be examined are the types of
risks covered by the SPS agreement.
– The procedures for the approval are, in part, SPS
measures within the Agreement
DSB—The Case
• However…
– Many of the identified concerns are highly unlikely to
occur in practice…(We) reiterate, the right to use the
measure is NOT in question
• Moratorium between Oct. 1998 and Aug. 2003
– The Panel determined that the moratorium was not itself
an SPS measure within the meaning of the
SPS Agreement, but rather affected the operation and
application of the EC approval procedures, which are
set out in the relevant EC approval legislation and which
we had found to be SPS measures. (This) resulted in a
failure to complete individual procedures without
undue delay and hence gave rise to an inconsistency
with Article 8 and Annex C of the SPS Agreement
DSB—The Case
• The panel found that there was undue delay in
the completion of the approval procedure with
respect to 24 of the 27 relevant products…the
European Communities has breached its
obligations under Article 8 and Annex C of the
SPS Agreement.
• EC Member States:
– the Panel has concluded that each of the safeguard
measures taken by the relevant member States
(Austria, Belgium, France, Germany, Italy and
Luxembourg) fails to meet the obligations of the
European Communities under the
SPS Agreement.
DSB—The Settlement
• At the DSB meeting on 19 December 2006, the
European Communities announced its intention to
implement the recommendations and rulings of the
DSB in a manner consistent with its WTO obligations.
However, due to the complexity and sensitivity of the
issues involved, the European Communities would
need a reasonable period of time for implementation.
• On 21 June 2007, the (parts) notified the DSB that they
had agreed that the reasonable period of time for the
European Communities to implement the
recommendations and rulings of the DSB shall be twelve
months from the date of the adoption of the panel
reports. Accordingly, the reasonable period of time
expires on 21 November 2007.
GMOs in the EU—Challenges ahead
• EU states block 'safe' GM crops
– “Resistance to genetically modified crops in Europe
was underlined yesterday when European Union
governments rejected an attempt to force
Hungary to lift a ban on them. Last year, ministers
permitted Austria to maintain a ban on the same
product, MON810…The EU claims it has ended the
moratorium that was deemed illegal by Geneva, but in
practice no new crops have been approved for
cultivation since. Only a handful can be grown and
not many more imported for animal feed and
processing, amid continuing suspicion among the
public. (February 21, 2007—Financial Times)
GMOs in the EU
Challenges ahead
• You say 'potato,' but I say 'no way‘
– (AMFLORA) ''You would think that this approval would have
been easy since this potato has no seeds, no wild relatives to
cross with in Europe, and only industrial use,'' said Ralf-Michael
Schmidt, vice president of BASF. ''But it didn't turn out that
way.'‘…If the approval process for industrial Amflora has proved
a challenge…the road will certainly be far more arduous for other
planned genetically modified crops, since they do involve plants
intended for food or animal feed. ''That will be a much tougher
sell”
– Polls by the European Commission have shown that 80 percent
to 90 percent of Europeans distrust genetically modified
plants. ''We can authorize as many crops as we want but the
bigger problem is to convince people they are safe,''
spokeswoman for the European Commission's Environment
Directorate. (July 21, 2007--The International Herald Tribune)
GMOs in the EU
Challenges ahead
• In EU, front lines in a global war over
food
– ''All political parties are opposed to GMOs, which is
odd because we disagree on everything else,'' said
Theodore Koliopanos, a legislator and former deputy
environment minister (of Greece).
– ''We think we have a good policy, but we have
discovered extreme reluctance among consumers
and many member states to move forward with
GMOs,'' said Barbara Helfferich, spokeswoman for
the EU's Environment Directorate. (The International
Herald Tribune, May 25, 2006)
GMOs in the EU
Challenges ahead
• EU warned GM ban could hit food costs
– "Concerning soya beans and soya meal, the EU
imports vast volumes of these feed products, which
could be difficult to replace by alternative protein-rich
feed. Only 10-20 per cent of imports could be
replaced by substitutes.”
– "My view is that sooner or later the whole issue of GM
will have to be considered, hopefully in a nonhysterical atmosphere. Erecting more regulatory
hurdles is the last thing we need." Kevin Hawkins, the
director of the British Retail Consortium
(The Scotsman--July 10, 2007 )
GMOs in the EU
Challenges ahead
NGOs
– Greenpeace
• “"Ministers took a bold decision today in defence of the environment and in line with European public opinion," (refering to Hungary
Ban)
• “approving Amflora would make ''a mockery of EU law,''
– Friends of the Earth
• ''The EU policy of just pushing forward with the technology is utter
blindness…Genetic contamination is unavoidable and irreversible
and will only increase over time.” "The World Trade Organisation
with its secretive decision-making processes is unfit to decide what
we should eat or what farmers should grow...a new global trading
system is needed that protects people and the environment from the
worst excesses of industry.”
GMOs in the EU
Challenges ahead
• BIOTECH COMPANIES:
– Europabio
• ''The EU has put systems in place to deal with
GMOs and now the market has to be allowed to
operate…If member states are breaking EU law,
we expect the commission to take action.'‘
• Industry groups argue that products should not
even be labeled as GMO or GMO-free, as the EU
proposes, because such labels are an unfair trade
barrier
GMOs in the EU
Challenges ahead
• CONSUMERS
– 54 percent of people in the 25-nation EU see
food biotechnology as a safety concern. A
series of high-profile food scares has spooked
Europeans, and they don't particularly trust
their relatively new Europe-wide food safety
authority. (Consumer choice and
'Frankenstein foods‘, Christian Science
Monitor, February 13, 2006)
SUMMARY
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In May 2003, the US, supported by Canada and Argentina,
launched a WTO case against the EU concerning the EU
authorization process for GMOs.
Three complainants publicly argue that the WTO case is
straightforward and clear, the panel spent a number of years to
reach final conclusions on the dispute.
Against the arguments of all three complainants, the WTO panel
agreed with the EU that it would be unwise to rule on such a
complex topic without hearing the views of scientists.
The panel eventually decided to gather the views of independent
and highly reputable scientists from different parts of the world,
including Europe and America.
That consultation process confirmed the legitimacy of the health
and environmental issues addressed in EU regulations and
procedures.
It also acknowledge the illegitimacy of the “moratorium” and ruled
for it to be lifted.
CONCLUSIONS
• GMOs approval in the EU will take many more years to
develop, despite of the WTO ruling
• As time passes and studies on biotech food become
more available, it is likely that the perceptions of the
consumers in the EU will change. Economics will also
play an important role in helping shape the opinion of EU
consumers
• Both NGOs and Biotech industries need to develop
responsible approaches to find workable solutions
• There is room for modernization in the WTO DSB
References
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Center For International Development, Harvard University. Global Trade
Negotiations Home Page. Sanitary and Phytosanitary Measures and
Technical Barriers to Trade Summary. Accessed at
http://www.cid.harvard.edu/cidtrade/issues/spstbt.html. Accessed on
10/3/2007.
Fitzgerald, Sara. Putting the EU in Its Place: Why Filing a GMO Case with
the WTO Is Crucial. 1/21/2003. The Heritage Foundation.
IATP. U.S. vs. EC Biotech Products Case, WTO Dispute Backgrounder.
2005. Institute for Agriculture and Trade Policy, Trade and Global
Governance Program.
Kogan, Lawrence. WTO Ruling on Biotech Foods Addresses Precautionary
Principle. 12/08/2006. Washington Legal Foundation.
Oral Statement of the United States to the WTO DSU Panel, First Panel
Meeting. 6/02/2004.
Sindico, Francesco. The GMO Dispute before the WTO: Legal Implications
for the Trade and Environment Debate. 11/2005. Social Science Research
Network Electronic Paper Collection: http://ssrn.com/abstract=655061