GENET archive


9-Misc: Reactions on WTO decision on EU GMO moratorium

                                 PART I
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TITLE:  Will WTO Decision On European Biotech Crop Regulatory Approval
        Open Up European Market?
SOURCE: Blake, Cassels & Graydon LLP, Canada, by Cliff Sosnow
        Originally published in Blakes Bulletin on International Trade,
March 2006
DATE:   23 Mar 2006

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Canada: Will WTO Decision On European Biotech Crop Regulatory Approval
Open Up European Market?

When the lens used by many to view this WTO dispute is shorn of the dark
emotions of fear and hostility to biotech crops, the actual issues
examined by the panel are relatively straightforward.

Over the last decade, the accumulated global biotech crop area has grown
in size to an amount that is 20 times the total land area of the United
Kingdom or, to put it another way, to almost half the total land area in

The recognized mega-producers - the leaders - of biotech crop production
in the world are the United States, followed by Argentina, Brazil, Canada
and China. While farmers in these countries and in other countries have
consistently increased their plantings of biotech crops by double-digit
growth rates every year since biotech crops were first commercialized in
1996, farmers in the leading producer countries have looked at the
European Union (EU) as a walled fortress with very few and, for all
intents and purposes, closed or heavily-guarded gates preventing biotech
crop access to, or production in, countries in the EU. For example, in
1998, what was once an average CAD 185 million a year in trade for Canola
in the EU had dwindled by 2003 to a mere CAD 1.5 million.

The key to growing a currently estimated USD 44 billion biotech crop
industry to a projected USD 210 billion behemoth in the coming years is
developing country approval to permit their farmers to grow biotech crops
currently in use and in development. And the key to that approval may
reside deep in the bowels of a just-released, confidential, interim-WTO
panel report on the EU's biotech crops approval process and whether that
process complies with the WTO's Sanitary and Phytosanitary (SPS) Agreement.

The WTO Issues A Ruling

In a 1,000 plus page decision of dense legal reasoning, a WTO panel
looked at the failure of the EU, as alleged by the United States, Canada
and Argentina, to make final decisions on the approval of biotech
products from October 1998 to the time of the establishment of the WTO
panel in August 2003; and the WTO-consistency of prohibitions imposed by
certain EU member states regarding specific biotech products even after
these products had been approved by the EU for European-wide marketing.
The EU has had legislation since 1990 on the regulatory approval of
biotech products (commonly referred to as genetically modified organisms
or GMOs) and up until about 1998 had authorized the commercial release of
nine biotech crops. That changed in the late 1990s when Austria, France,
Germany, Greece, Italy and Luxembourg banned imports of biotech crops
into, and the marketing of the products in, these countries even though
the EU had given previous regulatory approval for such products. When
coupled with allegations by the complaining countries that the EU
regulatory authorities have been effectively "sitting on" applications
for regulatory approval of 27 new biotech crops, it is not difficult to
appreciate the complexity of the dispute and why it has taken almost
three years for a panel to issue its interim ruling. Understandable, too,
are the enormous political pressures impinging on this dispute.

The Ruling Has Been A Source Of Deep Anxiety

After all, it wasn't that long ago that Europeans suffered one shock
after another to their food safety regulatory systems. Everything from
mad cow disease to the outbreak of foot and mouth disease to scientific
musings about the carcinogenic effects of consuming beef from cows
treated with growth hormones and antibiotics have left Europeans
extremely concerned about their food safety and mistrustful of government
regulatory systems. And politicians in Europe, like politicians
elsewhere, have tried to be responsive to those concerns. Yet when the
lens used by many to view this WTO dispute is shorn of the dark emotions
of fear and hostility to biotech crops, the actual issues examined by the
panel are relatively straightforward.

In its ruling, the panel did not examine whether biotech products in
general are safe or not (although the panel noted that both the evidence
provided by the EU and the advice provided by a panel of scientific
experts advising the panel indicates that many of the identified concerns
"are highly unlikely to occur in practice"). The panel did not examine
whether the EU has a right to demand the pre-marketing approval of
biotech products. The EU approval procedures that provide for a product-
by-product scientific assessment of various potential risks were not
raised by any of the complaining parties. Nor, in fact, were the
conclusions of the relevant European scientific committees regarding the
safety evaluation of specific biotech products; although they did
challenge the scientific basis for some of the objections made by the
various European member states that have refused to give marketing
approval of biotech products in their market.

What The WTO Panel Found

Two fundamental questions have girded this entire dispute. First, did EU
officials apply a general moratorium in practice on approval of biotech
products between October 1998, when European officials no longer gave
authorizations or approvals on biotech products, and August 2003, the
date of the establishment of the WTO panel? And, as a corollary to that,
did EU officials fail to consider applications for final approval
concerning 27 biotech products for which the EU had already commenced
approval procedures? Second, were the prohibitions (called "safeguard
measures") by Austria, France, Germany, Greece, Italy and Luxembourg
applied without regard to the legal obligation under the SPS Agreement to
conduct a science-based risk assessment of the risks to human health or
the environment of the biotech products sought to be introduced into
these markets by the complaining parties?

The panel found that indeed EU officials operated as if there was no
regulatory system for the approval of biotech products. The panel
concluded that EU officials, in practice, ignored their own legal system
of biotech product approvals between 1999 and 2003, not only as a general
means of operation but also respecting 24 of 27 products for which EU
officials had already commenced approval procedures. In so doing, the
panel concluded that the EU violated its SPS obligation to the
complaining parties to complete individual approval procedures "without
undue delay" as required by Article 8, Annex C of the SPS Agreement. The
panel also concluded that the member states that prohibited the marketing
of biotech products did not perform a proper, science-based risk
assessment to support the prohibition, although some of the member states
did conduct scientific studies. The panel examined whether risk
assessments undertaken by EU scientific committees could provide
"reasonable support" for the prohibitions but concluded that this, too,
was not the case. In light of these assessments, the panel had no choice
but to conclude that each of the safeguard measures violated Articles 5.1
and 2.2 of the SPS Agreement that require a risk assessment of the health
and environmental risks of biotech products based on sufficient
scientific evidence.

The Ruling May Not Yield Better Market Access

The long term implications of the interim panel report are difficult to
assess simply because so much depends on how the EU, its member states
and other countries, including developing countries that are considering
increasing acreage planted with biotech crops, react to the decision. If
vigorously pursued, the decision clears the path to significantly
increased biotech crop development and commerce for a number of reasons.
First, the decision authorizes and empowers the EU to get the identified
member states to lift their bans on the pre-marketing approval of biotech
product introductions into their markets. Second, the decision sends a
message to the EU that it is under a clear obligation to use the
regulatory tools at its disposal to process biotech product applications
in a timely way based on a scientific rules-based review system. Third,
the decision sends a message to developing countries that have been
holding back on increasing acres planted with biotech products out of
concern that crop yields will be shut out of lucrative European markets,
that Europe can be a robust market for their product.

Yet even now there are complaints that EU officials are still operating
an approval process at a snail's pace. Added to this are new EU labelling
rules that require all foods derived from biotech products, whether or
not the genetic alteration is detectable in the final product, to bear a
label saying that they have been produced from biotech crops. Coupled
with EU regulations that impose extensive documentation requirements
tracing the usage of biotech crops from the farm to further processing to
the distribution chain, producers and suppliers of biotech products
continue to view the European market as one walled off by a dense thicket
of regulations and regulatory approvals despite this forceful WTO ruling.

The content of this article is intended to provide a general guide to the
subject matter. Specialist advice should be sought about your specific

                                 PART II
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TITLE:  World Treaty on GMO Trade Set to Spark New Tensions
SOURCE: Reuters, by Jeremy Smith
DATE:   13 Mar 2006

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ANALYSIS - World Treaty on GMO Trade Set to Spark New Tensions

BRUSSELS - Europe may be on a collision course with its major trading
partners as debate heats up over a treaty to regulate the global flow of
genetically modified (GMO) foods, largely rejected by Europeans.

The European Union's sceptical stance on GMO's has long poisoned
relations with biotech-friendly countries like the United States, Canada
and Argentina, where many consumers shrug off claims the products pose
health or environmental risks.

And the EU may have lost moral ground after its GMO import policy was
criticised last month at the World Trade Organization (WTO) in a case
filed against it by the three major GMO growers.

But that has not changed the view of most Europeans who shun GMO maize,
soybeans and other crops as "Frankenstein Foods", leading retailers to
keep them off shelves.

From the WTO, the biotech battleground now shifts to a UN treaty, the
Cartagena Protocol, which came into force in 2003 and aims for
transparency and control in world GMO trade.

The protocol obliges exporters to provide more information about GMO
products like maize and soybeans to recipient countries to help them
decide whether to accept them.

Under its provisions, a nation may reject GMO imports or donations - even
without scientific proof - if it fears they pose a danger to traditional
crops, undermine local cultures or cut the value of biodiversity to
indigenous communities.

As of early March, 132 countries had signed the protocol.

But the United States, where companies like Monsanto are large producers
of GMO seed, has not signed and looks unlikely to do so anytime soon.

Along with major GMO exporters Canada, Australia and Argentina, the
United States says GMO crops are safe, can increase yields and resist
destructive pests.

Europe, more cautious on biotechnology, thinks differently and has
introduced tough rules on GMO traceability and labelling in food and
animal feed that go beyond the Cartagena provisions.

Diplomats say developing nations, mostly those in Asia and Africa that
need food aid, are caught between the two powers.

Although many African nations are prone to food shortages, countries like
Zimbabwe, Zambia and Mozambique have voiced concerns about accepting
biotech maize donations.


Negotiations on the treaty's implementation and enforcement have moved
very slowly, with the next meetings set for Curitiba in southern Brazil
starting next week. Key issues to be debated will be economic liability
and documentation of GMO shipments.

Little progress is expected on liability, where discussions have focused
recently on areas like handling and transport of GMO cargoes, defining
"damages", and how far any responsibility should lie with the exporting
or importing country.

"We are not saying 'no' to liability, but are concerned that there still
appears to be a push for an all-encompassing, unworkable and unmanageable
regime under the protocol," said Michael Leader at CropLife
International, a Brussels-based federation representing the global plant
science industry.

"A lot still needs to be spelled out," said Leader, CropLife's
international regulatory policy manager for agricultural biotechnology.

The Brazil meeting instead should focus on paperwork and labelling
requirements. These are a big concern for biotech companies, which
complain they would face hefty extra costs for testing export cargoes for
the presence of gene-altered grains. "Documentation is the big issue, the
key thing to trigger the whole protocol, for whether it works or not -
and whether countries have the right to know what's being imported," said
Adrian Bebb, GMO campaigner at Friends of the Earth Europe.

So far, shipments of GMO's destined for use in industrial processing,
food and animal feed, must be labelled as "may contain GMO's". Green
groups are very keen to tighten this requirement, as are some Third World
importers in Africa.

Biotech companies do not agree, saying the wording is already tough
enough and anything more might hamper trade.

Other unresolved areas are the threshold for the percentage content of
GMO material that may exist by chance in a non-GMO cargo and compliance,
where the EU is believed to want legal and financial penalties for anyone
flouting the treaty's provisions.

                                 PART III
------------------------------- GENET-news -------------------------------

TITLE:  Biotech's European Victory
SOURCE: Red Herring, USA
DATE:   13 Mar 2006

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Biotech's European Victory

The WTO's pro-GM ruling in Europe is good news for biotechs, but no one's
celebrating yet.

It took the World Trade Organization (WTO) more than a year to decide
that the European Union's ban on some biotech crops violated
international trade law. But companies with products stalled in the
E.U.'s approval process still aren't sure if it was worth the wait.

The WTO's decision, detailed in a private interim report sent only to the
countries involved, is the first step toward opening up the E.U. to
literally tons of genetically engineered crops produced by the United
States, Canada, and other countries.

The Biotechnology Industry Association (BIO) claims that the E.U. has
effectively blocked as much as $300 million in U.S. agricultural exports
annually. About 20 products are currently stalled in the E.U.'s approval
process, including at least one by Germany's Bayer CropScience and
several by Switzerland's Syngenta. Both companies declined to name the
products in question.

The WTO has dealt with the case since May 2003, after a formal protest
from the U.S., Canada, and Argentina. Their chief complaint was that six
European nations--Austria, France, Italy, Germany, Luxembourg, and Belgium
--have outright bans on all biotech crops. Without scientific evidence to
back up these bans, they are illegal under international trade law.

But the ruling doesn't mean Germans will be eating genetically modified
strudel anytime soon. The E.U. will appeal, which is a lengthy process in
itself, made even lengthier because of the complex science involved.

Even if the WTO decision stands after the appeal, the E.U. might defy a
final ruling anyway, says Mark Nguyen, senior policy advisor on
international trade at St. Louis, Missouri-based law firm Bryan Cave. In
the case of hormone-treated cattle, the E.U. also failed to prove that
the beef was dangerous to a WTO panel, but chose to take economic
retaliation against the U.S.--about $117 million annually--rather than let
the food through.

European consumers still largely oppose the idea of biotech crops, and
labeling products as GM--another issue the E.U. needs to resolve--may be
the kiss of death for any potential revenues, even if the products do
make it to the shelves. Pro-biotech countries may have won this round,
but the fight is far from over.

European NGO Network on Genetic Engineering

Hartmut MEYER (Mr)
news & information

phone....... +49-531-5168746
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email....... news(*)
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