GENET archive


6-Regulation: EC moves to defuse possible U.S. WTO biotech challenge

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SOURCE: Inside US Trade, USA
DATE:   Apr 18, 2003

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The European Commission last week launched a two-pronged assault aimed at 
assuring the Bush Administration that it was working to lift an informal member 
state moratorium on approvals of genetically modified organisms. Amid signs that 
the U.S. is at a minimum aggressively seeking international support for a 
potential challenge of the EU's moratorium at the World Trade Organization, the 
Commission has written to almost 200 members of Congress contending that 
approvals could start as early as the middle of the year.

In an April 11 letter to House Speaker Dennis Hastert (R-IL), European 
Commission Ambassador Guenter Burghardt said that legislation will shortly be in 
place that would provide the means to restart the approvals of pending and new 
GMO applications as early as mid-2003. The letter emphasizes that the Commission 
is "deeply concerned" about the negative climate toward GMOs in Europe and that 
the moratorium is not driven by a desire to protect the EU market.

U.S. corn exports have decreased since 1995, but the shortfall has been made up 
not with EU corn, but with Argentine exports of approved GMO varieties or GMO 
free corn, according to the letter. The Commission is also following up on the 
letter by meeting with congressional staff.

Separately, the Commission began legal proceedings against member states that 
have not yet implemented into their national laws the EU directive on the 
release of GMOs into the environment, which is the basis for the approvals.

Burghardt's letter is aimed at updating members of Congress on the EU's 
directive 2001/18, which contains a mandatory requirement for traceability and 
labeling, which will be further fleshed out in separate regulations. The 
traceability and labeling legislation was transmitted to the European Parliament 
last month for a second reading and is likely to be adopted in the summer. 
Should that happen, an EU source said the European Council of Ministers is 
likely to adopt those rules in the fall, thus clearing the way for the European 
Union's Regulatory Committee to begin approving GMO applications when it meets 
in October.

However, the EU source acknowledged that the actual adoption by the Council of 
Ministers of the new rules in the fall represents an ideal timeline as there 
exists the possibility that the European Parliament could make substantive 
changes to the traceability and labeling rules. This would require the council 
and parliament to enter into a conciliation process to resolve any differences 
over the final shape of the rules. Should such conciliation be necessary, than 
the new traceability and labeling rules may not come into effect until late 2003 
or early 2004, according to an attachment to Burghardt's letter.

Currently, a blocking minority of EU member states prevents GMO approvals from 
passing through the EU's Regulatory Committee until new rules on traceablity and 
labeling are adopted. These member states have indicated that once those rules 
are in place, they will cease blocking the approval of GMO products. The freeze 
on the approval of GMO products dates back to 1998.

The Commission's legal maneuvering affects 12 member states that have not yet 
implemented Directive 2001/18/EC that repealed an earlier law on the release of 
GMOs and is intended to improve transparency, create a more efficient 
authorization process and provide principles governing risk assessment. The 
directive came into force last October, but only the United Kingdom, Sweden and 
Denmark have adopted the legislation.

On April 10, the Commission formally called on the 12 member states that have 
not adopted the directive to do so. Should they balk at the Commission's 
request, the Commission would issue a final warning or a "Reasoned Opinion" 
which demands compliance within two months. Following that, the Commission could 
move to the European Court of Justice if member states still refuse to comply.

During his visit to Washington earlier this year, EU Agriculture Commissioner 
Franz Fischler warned that the Commission will pursue legal action through the 
European Court of Justice should countries continue to block GMO approvals once 
the traceability and labeling rules are in place (Inside U.S. Trade, Feb. 7, p. 

In his letter to Hastert, Burghardt pointed to the directive as more proof that 
the EU was working to remove the moratorium saying that since the legislation 
was introduced last October, some 19 GMO applications have been transmitted from 
member states to the Commission, two of which he said were already well into the 
approval process. Additionally, Burghardt said that the establishment of the 
European Food Safety Authority was almost complete thus representing another 
piece of the legislative framework needed to break the moratorium.

The Bush Administration has not given up on a biotech case in the WTO and a 
decision on pursuing a case appears to be a matter of when, not if, the U.S. 
will move, informed sources said. The Office of the U.S. Trade Representative is 
still seeking support among trading partners that would sign on as third parties 
or co-complainants. But at the moment, the Administration has not scheduled any 
cabinet level meetings and none are imminent, a U.S. government source said. So 
far, the U.S. has been able to secure the support of Canada and Argentina as 
co-complainants for a case with Australia and Mexico to join as a third party to 
the case, said the source.

But one private-sector source said that a senior USTR official has put out the 
word that the U.S. has decided to request WTO consultations with the EU on 
biotechnology and will likely make that request at the end of April or in early 
May. A formal request for WTO consultations is the first step in seeking the 
establishment of a dispute settlement panel, but does not automatically lead to 

The U.S. indefinitely postponed a cabinet-level meeting in February in a bid to 
win support for its invasion of Iraq. With the war in Iraq now winding down and 
the U.S. no longer in need of European support at the United Nations, the reason 
for delaying the biotechnology case has evaporated, sources said.

An informed source said the Commission sent the letter to Hastert both as an 
effort to explain the steps it is taking to lift the moratorium and as an 
attempt to ward off a potential U.S. WTO challenge.

One source said that the U.S. strategy in requesting WTO consultations with the 
EU may be to test of the sincerity of European efforts to actually remove the 
moratorium. If Europeans show that concrete steps are being taken to remove the 
ban on biotech as consultations are requested, there could be a decision not to 
proceed to a WTO case, said the source.

The Commission in the past has given assurances that the necessary steps would 
be taken to remove the biotechnology ban, he said, and little was then done. A 
European source acknowledged that in the past, "it is true we have been too 

Burghardt's letter also categorically denied charges from U.S. politicians that 
the EU counseled Zambia and Zimbabwe to reject shipments of food aid containing 
GMOs (Inside U.S. Trade, Jan. 10, p.1). In the letter, Burghardt says the 
Commission has done its best to allay fears in Southern Africa over the possible 
health risks of GMOs