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                                  PART I
-------------------------------- GENET-news --------------------------------

TITLE:  The WTO complaint -- why now?
SOURCE: Nature Biotechnology 21(7): 735-736
        Commentary by Julian Kinderlerer
DATE:   Jul 2003

------------------ archive: http://www.gene.ch/genet.html ------------------


The WTO complaint--why now? 

The author is at the Sheffield Institute of Biotechnological Law and
Ethics, Department of Law, Conduit Road, University of Sheffield,
Sheffield S10 1FL, UK. e-mail: j.kinderlerer@sheffield.ac.uk

After years of frustration at an inability to sell genetically modified
(GM) foods and crops in the European Union, and because of concerns about
the impact of the de facto moratorium on the import by developing
countries of these products, the United States, with Canada, Argentina
and initially Egypt, has recently decided to instigate an action at the
World Trade Organization (WTO; Geneva, Switzerland), citing article 4 of
the Disputes Procedure and articles in the Sanitary and Phytosanitary
(SPS) Agreement, the Agreement on Agriculture, the Technical Barriers to
Trade (TBT) Agreement and the General Agreement on Tariffs and Trade
(GATT) 1994 agreement. Although the EU bureaucracy has been sluggish in
tackling politically troubling GM products, I argue here that the WTO
complaint is poorly timed and ultimately likely to be counterproductive.

According to a report of the EU-US Biotechnology Consultative Forum1,
"Regulation is a means by which governments seek to gain the benefits and
ameliorate the potential negative consequences of a market economy. The
United States and the European Union differ in the particulars of how
they approach regulation for agricultural biotechnology products" but
share the same goals in assuring safety. There is a need to recognize
that science cannot provide all the results needed to ensure
environmental and health 'safety'; in many instances, further
experimentation will not provide answers that enable us to make decisions
because of the inherent variability of biological systems.

The first EU directives on GM technology were agreed on in 1990.
Directive 90/220 (ref. 2) addressed the release into the environment and
the marketing of GM organisms. European governments were required to
bring the directive into force through national legislation. Directive
90/219 on the contained use of GM microorganisms was passed at the same
time3. This directive differs from that for release in that permission to
use organisms in containment is a national decision and contained use has
not been affected by the moratorium. Trials involving field release of GM
organisms are governed through legislation derived from 90/220; field
trials have continued throughout the time when approvals for marketing of
transgenic materials have dried up in most of the EU countries.

Much has been done to change the EU legislative framework since 1990. In
1998, two directives were introduced that were intended to have a major
impact on the use of modern biotechnology in Europe. Directive 98/81
(ref. 4) significantly amended Directive 90/219, and Directive 98/44
(ref. 5) required modification of the patent law in EU countries to
ensure that inventions involving modern biotechnology are protected. In
2001, Directive 90/220 was modified substantially, providing much clearer
time limits for the decision-making processes so as to (attempt to)
ensure that those applying for permission to market transgenic products
would know the timescale for decision. This directive should have been
incorporated into national law during October 2002, but many European
nations have failed to do so. It provides for principles for the
environmental risk assessment that "should be carried out in a
scientifically sound and transparent manner based on available scientific
and technical data," including, as stated in Annex II: "The objective of
an e.r.a. [environmental risk assessment] is, on a case-by-case basis, to
identify and evaluate potential adverse effects of the GMO [GM organism],
either direct and indirect, immediate or delayed, on human health and the
environment which the deliberate release or the placing on the market of
GMOs may have. The e.r.a. should be conducted with a view to identifying
if there is a need for risk management and if so, the most appropriate
methods to be used."

In 2002, the European Commission (EC; Brussels, Belgium) published their
strategy for using modern biotechnology for the benefit of the citizens
of member countries. It recognized that biotechnology offers
"opportunities to address many of the global needs relating to health,
aging, food and the environment and to sustainable developments" but
"[B]road public support is essential and ethical and societal
implications and concerns must be addressed." It went on to state,
"Science-based regulatory oversight should enhance public confidence" as
long as the technology is developed in a responsible way that is "in
harmony with ethical values and societal goals6."

In 2002, The UK Royal Society (London) published an update on their
report on GM plants in which they stated that "scientific assessments
must inform policy decisions but cannot preempt them, and that public
opinion must be taken into account throughout. We believe that the public
debate about GM food must take account of wider issues than the science
alone. We also wish to stress the importance of informing debate with
sound science"6. There is consensus in Europe that risk assessment must
be science-based, but that risk management, including the decisions as to
whether or not to permit a particular use must take wider considerations
into account.

It has long been recognized in the European Union that consumers have
been reluctant to purchase foods derived from GM organisms, and many of
the major food producers and retailers have chosen (since 1998) to use
the absence of these from their own brand products as a marketing tool.
Many commercial organizations have chosen to remove GM products because
of consumer concerns, rather than because of government edict. This
consumer reluctance has had an effect on policy initiated by governments
and by the EC. Since 1997, foods that consist of or contain GM organisms
have not been approved for use in the European Union, and it is feared
that the new labeling system that is likely to be implemented within
Europe will effectively extend this 'moratorium.' In March of this year,
J. Dennis Hastert, the Speaker of the US House of Representatives,
suggested that the moratorium was based on fear rather than sound
science. The impression given was that it was the authorities that were
fearful and that consumers would gladly buy the products if they were
available, which is patently not the case. Codex Alimentarius (Rome,
Italy) has not yet finalized its guidance on GM foods, but draft
recommendations permit labeling to indicate derivation from GM organisms8.

A Regulation on Novel Foods and Novel Food Ingredients (258/97) had been
introduced in 1997 to provide for risk assessment and labeling of GM
foods9. This has never worked, for GM foods have not been approved for
sale in the European Union since the regulation came into force. Labeling
requirements have been strict. Initially, Council Regulation 1139/98 laid
down provisions for the labeling of foods and food ingredients derived
from maize and soybean that had already been approved10. In 2000,
Regulation 50/2000 was adopted to ensure that additives and flavorings
would have to be labeled if either DNA or protein resulting from the
modification is present in the final product11. Regulation 49/2000 was
also introduced in 2000, aimed at ensuring that foods be labeled if there
is >1% GM material in the foods (adventitiously)12.

Several other legislative initiatives have attempted to address the over-
elaboration of legislation, including the setting up of the European Food
Safety Authority (Brussels, Belguim; http://www.efsa.eu.int/) and several
new regulations or directives proceeding slowly through the labyrinthine
parliamentary approval system of the European Union. These include a new
food and feed regulation13 and regulations for the labeling of GM foods
and feeds14. Labeling will be required for food and feed produced on the
basis of GM material, even if GM organisms cannot be identified in the
final product, for example, in soybean oil. The labeling requirement will
not apply for adventitious presence of GM organisms below a 0.9%
threshold. Products that have not received permission to be marketed in
Europe, but for which a scientific assessment is positive, will have to
be labeled if the GM content exceeds 0.5% adventitiously.

Another layer of regulatory complexity has been added by the Cartagena
Protocol to the Convention on Biological Diversity, which was agreed on
in 2000 and obtained its fiftieth ratification in June, thus coming into
force; 50 countries and the European Union has ratified the treaty (the
United States cannot without ratifying the Convention on Biological
Diversity). Many of the member states of the European Union have not as
yet ratified the treaty, but a decision of the European Parliament on
June 4, 2003 to agree to a Regulation on the Transboundary Movement of GM
Organisms means that ratification by the remaining members should happen
shortly and therefore the protocol will soon come into force. This places
many obligations on parties to the protocol, which may be different from
those under the terms of the GATT agreements.

The protocol outlines a risk assessment system based on science and is
intended to establish procedures that can assure the safety of products
that can be imported. The protocol is a trade-related treaty in that it
governs trans-boundary movements of 'living modified organisms' but sits
firmly within the Convention on Biological Diversity, an environmental
treaty. The agreement setting up the WTO (http://www.wto.org/english/
docs_e/legal_e/04-wto.doc) states in the preamble that while allowing the
optimal use of the world's resources in accordance with the objective of
sustainable development, there is a need both to protect and preserve the
environment and to enhance the means for doing so.

The European Union thus aims to set up a science-based assessment and
regulatory procedure. It has taken account of consumer reluctance to buy
these goods, and respects the concerns of consumers by providing for
labeling. The systems in place have been ineffective, in that they have
not allowed (so far) for the approval of products, but the many
publications of the commission and of member states show an appreciation
of the need to develop and use this technology and of the importance of
modern biotechnology for developing countries. It may be that the
decision to proceed to the WTO will harm the process of instituting
effective legislation and of building up public confidence that GM
organisms already approved for use in the United States and Canada pose
no harm to human health or the environment.

The differences between those nations taking this action and Europe is
that the European public have shown a strong resistance to using GM
products and this has been expressed in the reluctance of politicians to
override the strongly held views of their constituents. It is unlikely
that legal action would have a positive effect on consumer choice. The
EU-US Biotechnology Consultancy Forum recommended in 2000 "that once the
basic threshold of human safety has been met it is also appropriate to
consider, on a case-by-case basis, the potential risks and benefits of
each new product given the health and nutritional status of the people
and the ecological and agricultural systems in a particular region of
use." They went further, recommending that there be monitoring and that
"Governments should undertake to develop and implement processes and
mechanisms that will make it possible to trace all foods, derived from GM
organisms, containing novel ingredients or claiming novel benefits.
Before such new products are approved for marketing or when there are
significant environmental questions, a detailed plan for mandatory
monitoring should be established on a case-by-case basis." These are
processes that Europe has welcomed.

If politics should be avoided, and if the needs and wishes of
stakeholders on either side of the Atlantic should be ignored if they are
not science-based, then I ask "why now?"


REFERENCES

1. The EU-US Biotechnology Consultative Forum. Final Report (EU,
Brussels, Belgium) http://europa.eu.int/comm/external_relations/us/
biotech/report.pdf and http://europa.eu.int/comm/external_relations/us/
biotech/biotech.htm (December 2000)

2. The European Council. Official Journal L117 08/05/1990, 0015-0027 (1990).

3. The European Council. Official Journal L117 08/05/1990, 0001-0014 (1990).

4. The European Council. Official Journal L330 05/12/1998, 0013-0031 (1998).

5. The European Parliament and Council. Official Journal L213 30/7/1998,
0013-0021 (1998).

6. European Commission. Life Sciences and Biotechnology--A Strategy for
Europe. Communication from the Commission to the European Parliament, the
Council, the Economic and Social Committee and the Committee of the
Regions. COM(2002)27 (EC, Brussels, Belgium, 2002).

7. The UK Royal Society. Genetically Modified Plants for Food Use and
Human Health--an Update. Policy document 4/02 February 2002 (UK Royal
Society, London, UK, 2002).

8. Codex Alimentarius. Report of the Thirtieth Session of the Codex
Committee on Food Labeling, Halifax, Canada, 6-10 May 2002. Proposed
Draft Guidelines for the Labelling of Food and Food Ingredients Obtained
through Certain Techniques of Genetic Modification/Genetic Engineering
(Codex, Rome, Italy, 2002).

9. European Parliament and Council. Official Journal L043 14/02/1997,
0001-0007 (1997). 10. European Council. Official Journal L159 03/06/1998,
0004-0007 (1998). 11. European Commission. Official Journal L6 11/1/2000,
0015-0017 (2000). 12. European Commission. Official Journal L6 11/1/2000,
0013-0014 (2000). 13. European Parliament and Council. Proposal for a
Regulation of the European Parliament and of the Council on Genetically
Modified Food and Feed (25.7.2001) COM(2001) 425 final 2001/0173 (COD)
http://www.europa.eu.int/comm/food/fs/biotech/biotech08_en.pdf (25 July
2001). 14. European Parliament and Council. Proposal for a Regulation of
the European Parliament and of the Council Concerning Traceability and
Labelling of Genetically Modified Organisms and Traceability of Food and
Feed Products Produced from Genetically Modified Organisms and Amending
Directive 2001/18/EC (25.7.2001) COM(2001) 182 final. 2001/0180(COD).
http://www.europa.eu.int/comm/food/fs/biotech/biotech09_en.pdf (25 July 2001).


                                  PART II
-------------------------------- GENET-news --------------------------------

TITLE:  First salvo in transatlantic food fight is far from last word
SOURCE: Nature Biotechnology 21(7): 737-738, Commentary by Henry I Miller
DATE:   Jul 2003

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First salvo in transatlantic food fight is far from last word 

The author is a fellow at the Hoover Institution, Stanford University,
Stanford, CA 94305-6010, USA. He is an adviser to the US delegation to
the Codex Alimentarius Commission task force on biotech foods. He was
director of the FDA's Office of Biotechnology from 1989-1993. e-mail:
miller@hoover.stanford.edu

The United States, Canada, Argentina and Egypt, supported by nine other
countries, will file a World Trade Organization (WTO; Geneva,
Switzerland) complaint in hopes of getting the European Union to lift its
five-year moratorium on new recombinant-DNA-modified, or genetically
modified (GM), products, US officials announced in May.

Robert Zoellick, the US trade representative, complained that the
European ban was stifling biotechnology around the world and fueling
"fabricated fears stoked by irresponsible rhetoric about food safety." He
added, "We've waited patiently for five years for the European Union to
follow the WTO rules and the recommendations of the European Commission,"
which would permit the European Union to resume approval of new products.

Science and common sense favor the US position on the EU's moratorium.
Even the European Union acknowledges that the ban is insupportable
legally and scientifically. Three years ago, Environment Commissioner
Margot Wallstrom called it "illegal and not justified," and Health
Commissioner David Byrne has concurred. In response to fear-mongering in
the late 1990s by countries like France, Germany and Italy, the
Commission performed an exhaustive, six-year study of almost a hundred
experiments testing the safety of GM plants, and concluded that they are
actually safer and more environmentally friendly than traditional crops.

But even if the United States and its allies prevail at the WTO on the
issue of the ban on new approvals, it is unlikely that the European Union
would revise the unscientific and discriminatory regulatory policies that
underlie the moratorium; they are too entrenched, and have fomented too
much public fear and antagonism toward foods from GM organisms.

The best-case scenario is probably that the WTO would find in favor of
the United States, and the EU would agree to lift the moratorium on
approvals. But even that outcome would be of only marginal benefit
because it would leave in place the EU's unnecessary, unscientific and
excessive regulatory requirements for GM crops and foods. Plant breeders
and farmers in exporting countries, including the United States, would
still be reluctant to commercialize any new variety not approved in the
European Union, fearing that the presence of such a variety would
'contaminate' exports.

Underscoring this point, in March the American Soybean Association (ASA;
St. Louis, MO, USA), which represents the nation's soybean farmers,
called in testimony before the House Committee on Agriculture for the
administration to file WTO complaints against the EU's regulations. The
ASA noted that although the European Union did approve Roundup Ready
soybeans in 1996, the EU's mandatory 'labeling' law requires food
manufacturers to attach a stigmatizing 'GMO GM organisms label' on any
food products containing more than one percent of Roundup Ready soybeans.
This has caused a large number of food manufacturers who market their
products in the European Union to abandon US-origin commodity soy protein
as an ingredient, or to reformulate their products to exclude all soy
ingredients. This state of affairs permits the most risk-averse and
protectionist player in the game to set the rules on international trade.

The most likely outcome of the filing by the United States and its allies
is that the European Union would simply ignore a WTO ruling that the EU's
moratorium on approvals of new recombinant-DNA-modified plants is
illegal. The WTO has no real enforcement power, but relies on member
nations to accept its decisions voluntarily. The WTO could, however,
authorize the United States and the other complainants to establish
countervailing import tariffs on goods from the transgressor nations in
an amount equal to the potential sales revenue lost by the exporters. For
example, following an adverse ruling from the WTO on a case that involved
the importation of American and Canadian beef from cattle given certain
hormones, the European Union accepted the countervailing tariffs rather
than change its policy. A successful WTO challenge to the EU's
biotechnology policies would likely have a similar result.

No outcome that permits restriction of trade is desirable, but the
imposition of punitive compensatory tariffs would be an acceptable result
if it took into account both the direct and indirect losses to American
seed producers, farmers and food processors, which have mounted into the
billions of dollars annually. A ruling in favor of the United States and
its allies would send a message to the world that the EU's arbitrary,
scientifically indefensible and protectionist policies are an
unacceptable barrier to trade.

Even before this battle can be joined, however, Mr. Zoellick and US trade
interests are being outflanked by European and American--yes, American--
bureaucrats at the deliberations of the Codex Alimentarius Commission
(Rome, Italy), the food standards program of the United Nations, whose
ongoing task force on GM foods is nearing the completion of process-based
unscientific regulations that will provide cover for those who wish to
regulate agricultural biotechnology into oblivion.

During three years of negotiations by the task force, the Europeans and
nongovernmental organizations (which are permitted full participation)
have led the assault on technological innovation and free trade. The
participants--including the US delegation, headed by senior FDA food
regulator Robert Lake--have willfully ignored scientific principles and
the basic axiom that the degree of regulatory scrutiny should be
proportionate to risk. They have also disregarded the scientific
consensus that recombinant DNA technology is an extension, or refinement,
of older, traditional techniques of genetic modification, and that it
does not warrant discriminatory, excessive regulation. They have
overlooked the fact that during a decade of widespread use, the
performance of recombinant-DNA-modified crops has been impressive, with
farmers enjoying higher yields, lower costs of agricultural chemicals,
and less occupational exposure to pesticides. The environmental benefits
likewise have been notable, with less chemical runoff into waterways and
greater availability of no-till farming techniques that reduce soil
erosion. (FDA Commissioner Mark McClellan, who 'talks the talk' about the
agency's commitment to science, has refused to rein in Lake and the US
delegation.)

The task force has deliberately circumscribed only GM foods for
compulsory case-by-case "pre-market safety assessment of...both intended
and unintended effects, identifying new or altered hazards and
identifying changes relevant to human health," requirements that are more
appropriate to potentially dangerous prescription drugs and pesticides
than to improved varieties of tomatoes, potatoes and strawberries. No
food modified by less precise, less predictable traditional techniques--
that is to say, virtually the entire diet of Europeans and Americans--
could (or should) meet these standards. The Codex requirements for GM
foods, which are both sweeping and Draconian, will vastly increase the
development costs of these products, drastically impair their
competitiveness in the marketplace and limit their use.

Derailing the development of GM foods is exactly the agenda of many of
those on the task force. For the Europeans, the reason is clear:
protectionism, pure and simple. As Wellesley College political scientist
Robert Paarlberg has observed, the products of agricultural biotechnology
have been "developed mostly in US laboratories, widely adopted by US
farmers, and pushed out onto the world market by US companies."

Agricultural biotechnology is an icon of American technological success
and supremacy, so naturally the United States' trading partners intend to
punish it. Less obvious is why American regulators have been complicit.
Milton Friedman explained it with the observation that you can usually
rely on individuals and institutions (including regulatory agencies) to
act in their own self-interest. And that self-interest for regulators
lies in expanded responsibilities and larger budgets and bureaucratic
empires. The FDA wishes to adopt regulations, similar to those of its
European counterparts, that focus not on risk, but only on those products
made with the most precise and predictable techniques. Science and the
public interest be damned.

The prospect of unduly burdensome Codex standards for biotech foods is
ominous--both for the prospects of the technology itself and for US hopes
of WTO relief from protectionist European policies--because members of the
WTO will, in principle, be required to abide by those standards. In other
words, the standards will provide cover for unfair trade practices,
because with these measures in place, a country that wishes to block
trade in GM foods for any reason can defend against charges of unfair
trade practices simply by remonstrating that it's deferring to Codex
standards.

These unscientific standards will harm not only international trade, but
also the natural environment and public health. The greatest threats to
the planet's environment come from the world's burgeoning population and
its demands for water and for more and more land to be brought into food
production. Yet an important answer--the development of higher-yielding,
drought-resistant plant varieties that grow with lesser amounts of
agricultural chemicals--will be blocked by illogical, discriminatory,
hugely expensive regulation.

Regulation should focus on real risks and should not be triggered by the
use of one technique or another. If the current Codex approach is
adopted, the costs of biotechnology R&D will skyrocket, and there will be
essentially irreversible constraints on innovation and trade. Even the
most favorable ruling from the WTO would be a hollow victory.

The complaint against the European Union rightly challenges an illegal
restraint of international trade, but proponents of free markets must
recognize that their enemies lie not only 'across the Pond' but also
'inside the Beltway.'




--


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