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9-Misc: Interim report on WTO dispute



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TITLE:  Interim report on WTO dispute
SOURCE: THIRD WORLD NETWORK BIOSAFETY INFORMATION SERVICE
DATE:   10 Feb 2006

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Dear friends and colleagues,

RE: Interim report on WTO dispute

On 7 February 2006, the interim report of the WTO Panel considering the
case "European Communities - Measures Affecting the Approval and
Marketing of Biotech Products" was made available to the parties in the
dispute (US, Canada and Argentina as complaining parties, and the
European Communities (EC) as defendant).

This is a preliminary report and parties may ask for a review, after
which a final report will be issued and made public. Unless a consensus
at the WTO's Dispute Settlement Body rejects the final report, it becomes
the Body's ruling or recommendation. Both sides can appeal the ruling,
which would be heard by members of the standing Appellate Body. The
appeal can uphold, modify or reverse the Panel's legal findings and
conclusions. The Dispute Settlement Body has to accept or reject the
appeals report, and rejection is only possible by consensus.

The losing party will then have to bring its policy into line with the
ruling or recommendations. If complying with the recommendation
immediately proves impractical, the member is given a "reasonable period
of time" to do so. If it fails to act within this period, it has to enter
into negotiations with the complaining country (or countries) to
determine mutually-acceptable compensation. If after a certain period, no
satisfactory compensation is agreed, the complaining side may ask the
Dispute Settlement Body for permission to impose limited trade sanctions
against the other side.

The 1050 page interim report is thus preliminary in nature. It is
confidential and only made available to the parties in the dispute, but
the conclusions and recommendations of the interim report have been made
public at http://www.tradeobservatory.org/library.cfm?refid=78475

Comment and analysis of the interim report and its implications is
impossible without access to the full document. We have, however, had
access to pages 1029-1050 of the interim report, which provide the
conclusions and the recommendations of the Panel. The conclusion and
recommendations are not final. We highlight the facts of some of the
conclusions and recommendations below, based only on a viewing of pages
1029-1050.

A fuller TWN analysis will be made at a later date when the complete
report is publicly available.


WHAT THE PANEL DID NOT EXAMINE

1) It is important to note that the Panel did not examine whether
products of biotechnology in general are safe or not.

2) The Panel did not examine whether the biotech products (this is the
term used by the Panel and it is understood to refer to genetically
modified organisms and the products of such organisms) at issue in the
dispute are "like" their conventional counterparts (within the notion of
"like products" under WTO rules).

3) The Panel did not examine whether the EC has a right to require the
pre-marketing approval of biotech products; this issue was not raised by
the complaining parties.

In addition, the right of the EC to consider the possible risks prior to
giving approval for the consumption or planting of biotech plants was not
questioned by any of the complainants.

4) Neither did not Panel examine whether the EC's approval procedures
under its biosafety regulations, which provide for a product-by-product
assessment requiring scientific consideration of potential risks, are
consistent with its obligations under the WTO agreements; this issue was
not raised by the complaining parties.

5) The Panel did not examine the conclusions of the relevant EC
scientific committees regarding the safety evaluation of specific biotech
products.


EC GENERAL "DE FACTO" MORATORIUM

6) The Panel found that the EC applied a general "de facto" moratorium on
approvals of biotech products between June 1999 and 29 August 2003, the
date of the establishment of the Panel. It said that while the moratorium
was not itself a sanitary and phytosanitary (SPS) measure, it affected
the operation and application of the EC approval procedures, which were
found to be SPS measures.

The complaining parties had alleged that the "de facto" moratorium had
resulted in various breaches of the EC's obligations under the Agreement
on Sanitary and Phytosanitary Measures (SPS Agreement).

However, the Panel agreed with the US and Canada that the EC had acted
inconsistently with its obligations in only ONE matter. This was to do
with obligations under Annex C(1)(a), first clause of the SPS Agreement,
under which WTO members should ensure that procedures are undertaken and
completed without undue delay.

However, the Panel refrained from making recommendations for the EC to
bring this into conformity with its obligations, as the general "de
facto" moratorium has ended, given that the EC had approved a relevant
biotech product subsequent to the Panel establishment.

All other claims by the US, Canada and Argentina that the "de facto"
moratorium resulted in various inconsistencies with obligations under the
SPS Agreement were dismissed.

The Panel concluded that it was NOT established that the EC had acted
inconsistently with its obligations to ensure that
*	the standard processing period of each procedure is published or that
the anticipated processing period is communicated to the applicant upon
request; when receiving an application, the competent body promptly
examines the completeness of the documentation and informs the applicant
in a precise and complete manner of all deficiencies; the competent body
transmits as soon as possible the results of the procedure in a precise
and complete manner to the applicant so that corrective action may be
taken if necessary; even when the application has deficiencies, the
competent body proceeds as far as practicable with the procedure if the
applicant so requests; and that upon request, the applicant is informed
of the stage of the procedure, with any delay being explained (this claim
was only made by the US);
*	any SPS measure is applied only to the extent necessary to protect
human, animal or plant life or health, is based on scientific principles
and is not maintained without sufficient scientific evidence;
*	SPS measures do not arbitrarily or unjustifiably discriminate between
Members where identical or similar conditions prevail, including between
their own territory and that of other Members, and that they are not
applied in a manner which would constitute a disguised restriction on
international trade.

The Panel also concluded that, in applying the general "de facto"
moratorium, the EC has NOT acted inconsistently, as claimed by the US,
Canada and Argentina, with its obligations to
*	notify changes in their SPS measures and provide information on them in
accordance with the relevant Annex of the SPS Agreement;
*	ensure that the SPS measures are based on an assessment, as appropriate
to the circumstances, of the risks to human, animal or plant life or
health, taking into account risk assessment techniques developed by the
relevant international organizations;
*	avoid arbitrary or unjustifiable distinctions in the levels of SPS
protection against risks to human life or health it considers to be
appropriate in different situations, if such distinctions result in
discrimination or a disguised restriction on international trade;
*	ensure that SPS measures are not more trade-restrictive than required
to achieve their appropriate level of SPS protection, taking into account
technical and economic feasibility (this claim was only made by Canada).


PRODUCT-SPECIFIC EC MEASURES

7) The complaining parties had claimed that the EC had failed to consider
for final approval, applications concerning certain specified biotech
products for which the EC had commenced approval procedures. They alleged
that these so-called product-specific measures resulted in various
breaches in the EC's obligations.

However, the Panel found that the EC had breached its obligations in only
ONE matter. The Panel considered that there was undue delay in the
completion of the approval procedures with respect to 24 of 27 specified
biotech products, and therefore the EC had breached its obligations to
ensure that procedures are undertaken and completed without undue delay,
and consequently under Article 8 (dealing with control, inspection and
approval procedures), of the SPS Agreement.

All other claims by the US, Canada and Argentina that the relevant
product-specific measures were inconsistent with the SPS Agreement were
dismissed.

The Panel concluded that it was NOT established that the EC had acted
inconsistently with its obligations to ensure that
*	procedures are undertaken and completed in no less favourable manner
for imported products than for like domestic products (this was a claim
made only by Argentina);
*	the standard processing period of each procedure is published or that
the anticipated processing period is communicated to the applicant upon
request; when receiving an application, the competent body promptly
examines the completeness of the documentation and informs the applicant
in a precise and complete manner of all deficiencies; the competent body
transmits as soon as possible the results of the procedure in a precise
and complete manner to the applicant so that corrective action may be
taken if necessary; even when the application has deficiencies, the
competent body proceeds as far as practicable with the procedure if the
applicant so requests; and that upon request, the applicant is informed
of the stage of the procedure, with any delay being explained (this was a
claim made by the US and Argentina);
*	information requirements are limited to what is necessary for
appropriate control, inspection and approval procedures (this was a claim
made only by Argentina);
*	any requirements for control, inspection and approval of individual
specimens of a product are limited to what is reasonable and necessary
(this was a claim made only by Argentina);
*	any SPS measure is applied only to the extent necessary to protect
human, animal or plant life or health, is based on scientific principles
and is not maintained without sufficient scientific evidence;
*	SPS measures do not arbitrarily or unjustifiably discriminate between
Members where identical or similar conditions prevail, including between
their own territory and that of other Members, and that they are not
applied in a manner which would constitute a disguised restriction on
international trade (this was a claim made only by Canada).

The Panel also concluded that in respect of the relevant product-specific
measures, the EC has NOT acted inconsistently, as claimed by the US,
Canada and Argentina, with its obligations to
*	notify changes in their SPS measures and provide information on them in
accordance with the relevant Annex of the SPS Agreement (this was a claim
made only by the US);
*	ensure that the SPS measures are based on an assessment, as appropriate
to the circumstances, of the risks to human, animal or plant life or
health, taking into account risk assessment techniques developed by the
relevant international organizations;
*	avoid arbitrary or unjustifiable distinctions in the levels of SPS
protection against risks to human life or health it considers to be
appropriate in different situations, if such distinctions result in
discrimination or a disguised restriction on international trade;
*	ensure that SPS measures are not more trade-restrictive than required
to achieve their appropriate level of SPS protection, taking into account
technical and economic feasibility (this was a claim made by Canada and
Argentina).

The Panel recommended that the EC be requested to bring the relevant
product-specific measures into conformity with its obligations. However,
these recommendations do not apply to those measures that were withdrawn
after the Panel was established or to that affecting the approval of Bt11
sweet maize (food), since that application was approved during the course
of the Panel's proceedings.

Presumably, this also applies to other GM events that have since been
approved in the EC. Many of the products in question have since been
withdrawn or approved.

If the recommendation is adopted, this does not mean that the EC will
have to approve the products in question, but simply that it has to
ensure that the applications procedure for the relevant products are
undertaken and completed without "undue delay".


EC MEMBER STATE SAFEGUARD MEASURES

8) The safeguard measures (in the form of prohibitions on a particular
biotech product that has been formally approved for use within the EC)
taken by Austria, Belgium, France, Germany, Italy and Luxembourg, were
deemed by the Panel as failing to meet the obligations of the EC under
the SPS Agreement.

The Panel considered that there was sufficient scientific evidence for a
risk assessment to be conducted. As such, it said that the safeguard
measures were inconsistent with the clause in the SPS Agreement that
allows provisional measures to be maintained only where "relevant
scientific evidence is insufficient".

The Panel also considered that none of the EC member States provided any
"risk assessment" that would reasonably support their product-specific
bans. Although some of the EC member States did provide some scientific
studies to support their national product-specific bans, the Panel
considered that this was not a "risk assessment" that meets the
requirements of the SPS Agreement.

Thus the Panel concluded that the safeguard measures are not based on a
"risk assessment" as required under the SPS Agreement.

(Under the SPS Agreement, "risk assessment" is defined as "The evaluation
of the likelihood of entry, establishment or spread of a pest or disease
within the territory of an importing Member according to the sanitary or
phytosanitary measures which might be applied, and of the associated
potential biological and economic consequences; or the evaluation of the
potential for adverse effects on human or animal health arising from the
presence of additives, contaminants, toxins or disease-causing organisms
in food, beverages or feedstuffs".)

As such, by implication the EC was deemed to have acted inconsistently
with the requirements that any SPS measure is based on scientific
principles and is not maintained without sufficient scientific evidence.

The Panel recommended that the Dispute Settlement Body request the EC to
bring the relevant member State safeguard measures into conformity with
its obligations under the SPS Agreement.

This means that the relevant member States will have to ensure that if
they apply safeguard measures, such as product-specific bans, as afforded
under the EC law (and this law has not been challenged by the complaining
parties), they must provide a risk assessment of such products that meets
the requirements of the SPS Agreement.

This part of the Panel's interim report will need to be examined fully
when the entire report is publicly available. The gaps and lack of
consensus in scientific knowledge, and the application of the
precautionary principle/approach are fundamental issues in ensuring
biosafety. Any interpretation by the Panel would need close analysis.



With best wishes,

Lim Li Ching and Lim Li Lin
Third World Network
121-S Jalan Utama
10450 Penang
Malaysia
Email: twnet@po.jaring.my
Website: www.biosafety-info.net and www.twnside.org.sg

--


GENET
European NGO Network on Genetic Engineering

Hartmut MEYER (Mr)
In den Steinäckern 13
D - 38116 Braunschweig
Germany

P: +49-531-5168746
F: +49-531-5168747
M: +49-162-1054755
E: coordination(*)genet-info.org
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