London (13th
February 2006) – Last week, the WTO issued its findings on the complaint
made in 2003 by the United States, Canada and Argentina against EU restrictions
to trade with respect to GM foods.
The ruling found an absence of scientific justification for the EU failure
to allow the use of GM cotton, soybeans and maize, and that Europe and violated
international trade rules (1, 2).
The details of the decisions were not published openly. Just what happened
is not clear but obviously some organisations, perhaps governments and industrial
companies concerned, did receive the interim report. The findings were widely
expected to leak and, sure enough, they did, some of them perhaps even in
advance of whatever happened behind the scenes: Il Giorno reported
on February 7th that the “German wire service DPA has a short report:
“....well informed diplomatic circles in Geneva say that the WTO is
in favour of USA, Argentina, Canada’s complaint against EU….”
The WTO decision also found against separate national bans established by
Austria, France, Germany, Greece, Italy and Luxembourg, which have refused
to allow even those GM varieties approved by Brussels. Those national restrictions
have remained in place even after the moratorium was lifted in 2004.
While US and other farmers welcomed the decision, its immediate effect on
the EU and its Member States is unclear, at least in the short-term. The approval
of new GM varieties in the EU was blocked in 1998 but began again in a limited
fashion after the US started the WTO action. The EU, meanwhile, claims that
it now has all the appropriate regulations in place and that new approvals
are indeed taking place.
Meanwhile, rumblings offstage abound. Perhaps there would be huge compensation
claims from the American biotech industry if the EU Member States had indeed
illegally banned imports of genetically modified food (3). Some countries
felt their sovereignty had been infringed (is not surrender of some sovereignty
an important element in the EU, even for anti-GM countries?). In Austria,
government officials say they will continue to be as restrictive as possible
for the time being. "The protection of people and the environment have
absolute priority, and the most recent scientific research vindicates our
cautious approach in this matter," said Austrian Health Minister Maria
Rauch-Kallat, responsible for national GMO policy. "We will exhaust all
possibilities to keep Austria's agriculture GM-free and ensure consumers'
safety." (4).
Some deny that the EU ever had a moratorium. This present WTO report is an
interim finding; the final ruling is expected in April. Said an EU official:
"we may or may not decide to appeal" (5).
Allthough the complete 1,000-page report is not generally available, the Conclusions
and Recommendations can be downloaded from http://www.tradeobservatory.org/library.cfm?refid=78475.
OVERVIEW OF CONCLUSIONS AND RECOMMENDATIONS
Process Note: The following summarizes the “Conclusions and Recommendations”
section of the confidential draft (“interim”) report of the WTO
Panel in the GMO approvals dispute, issued February 7, 2006 which was apparently
leaked and then posted on February 8 on the Internet. For a complete understanding,
the Panel’s conclusions will need to be read in the context of the “findings”
section, which has not yet been circulated. The Panel’s interim conclusions
are subject to comment by the parties and modification by the Panel, and also
are subject to appeal, before they can be approved by the WTO and become binding
on the parties.
General Comments
The section of the draft or “interim” report issued on February
7, 2006 to the parties (US, Canada, Argentina and the European Communities)
and circulated widely on the Internet indicates that the Panel is set to find
that the international trade rules of the WTO fully support trade in products
of agricultural biotechnology for planting, processing and marketing subject
to science-based regulation.
Key findings include:
- Current WTO rules, principally the SPS Agreement, cover restrictions on
trade in products of ag biotech, including pre-marketing approval regulatory
regimes like that maintained by the EC.
- Other considerations raised by the EC in its defence, including the Biosafety
Protocol, do not alter the EC's WTO obligations to the parties to the dispute.
These two points are critical, as some have argued in the past that biotech
products are not “covered” by the WTO Agreement, and that new
rules would need to be negotiated to address them.
- Since 1998 the EC maintained a general ban on approvals of new ag biotech
products and that ban violated the SPS Agreement.
- There was undue delay as a result of product-specific bans on 24 products
in the regulatory pipeline during the period reviewed by the panel. The EC
violated its obligations under the SPS Agreement by maintaining those product-specific
bans.
- The nine Member State marketing and import bans on products already approved
for sale in the EC violated the EC’s obligations under the SPS Agreement.
- The Member State measures are not justified by the precautionary principle
– as the EC's own scientific committees reviewed and approved these
applications, there is nothing “insufficient” about the scientific
evidence.
• As in all WTO cases in which a violation is found, the EC would be
required to eliminate these trade restrictions to the extent they are still
in place. The Panel acknowledged that, although the EC has approved one or
more GMOs since the dispute began, the EC might have continued to apply an
amended general ban on GMO approvals.
• The Panel’s findings are clear that a politically-motivated
ban on GMO approvals, whether in the EC or elsewhere, cannot be maintained
consistent with WTO obligations.
Specific References and Citations
The Panel has found that the EC procedures for the approval of GMOs set out
in Directives 90/220 and 2001/18 are SPS measures covered by the SPS Agreement.
Regulation 258/97 is also, in part, an SPS measure. (Paragraph 8.4)
General Moratorium (Paragraphs 8.13-8.16, 8.33-8.36, 8.49-8.51)
The Panel found that the EC applied a general de facto moratorium on approvals
of products of agricultural biotechnology between June 1999 and August 2003,
when the Panel was established. (Paragraph 8.6)
With respect to Directives 90/220 and 2001/18, the Panel concluded that the
general de facto moratorium resulted in a failure to complete individual approval
procedures without undue delay, and therefore violated the EC’s obligations
under Article 8 and Annex C of the SPS Agreement. The Panel reached the same
conclusion with respect to Regulation 258/97 to the extent the approval procedure
addressed safety aspects. (Paragraph 8.6)
The Panel found that the approval by the EC of a relevant biotech product
after the Panel had been established ended the general moratorium, so it did
not feel the need to recommend that the EC bring the general moratorium into
compliance with its WTO obligations. (Paragraph 8.16) The Panel did acknowledge,
but did not reach, the question whether an amended general moratorium continues
to exist. (Footnote 1962)
Product-Specific Measures (Paragraphs 8.17-8.20, 8.37-8.40, 8.52-8.55)
In addition to the general moratorium, the Panel found that the EC improperly
failed to consider for final approval applications concerning 24 of 27 biotech
products identified by the Complaining Parties for which the EC had commenced
approval procedures, thus violating the EC’s obligations under Article
8 and Annex C of the SPS Agreement regarding undue delay. (Paragraph 8.7)
To the extent that these applications are still pending, the Panel recommended
that the EC bring itself into compliance with its obligations. (Paragraph
8.32)
Member State Marketing and Import Bans (Paragraphs 8.21-8.32, 8.41-8.48, 8.56-8.64)
The Panel found that the nine marketing and import bans imposed by six Member
States on GMOs already approved by the European Commission were covered by
the SPS Agreement, violated the Member States’ obligations under Article
5.1 (not based on risk assessment) and were not justified by the allowance
for temporary precautionary measures embodied in Article 5.7 of the SPS Agreement
because the Panel found sufficient scientific evidence was available to permit
a risk assessment. (Paragraph 8.9) Accordingly, the Panel found that the nine
Member State measures are inconsistent with Article 2.2 of the SPS Agreement.
(Paragraph 8.10) The Panel recommended that the EC bring the Member State
measures into compliance with its WTO obligations. (Paragraphs 8.32, 8.48,
8.64)
Sources:
(1) Edward Alden and Jeremy Grant. WTO rules against Europe in GM food
case. Financial Times (8.2.06) (http://news.ft.com/cms/s/453e4dd8-982d-11da-816b-0000779e2340,dwp_uuid=d4f2ab60-c98e-11d7-81c6-0820abe49a01,_i_rssPage=d4f2ab60-c98e-11d7-81c6-0820abe49a01.html)
(2) Sophie Walker and Richard Waddington. WTO condemns EU over GMO moratorium.
Reuters (8.2.06) (http://investing.reuters.co.uk/news/newsArticleSearch.aspx?storyID=75715+08-Feb-2006+RTRS&srch=GMO+moratorium)
(3) David Gow. EU fears huge payout for GM export 'ban'. The Guardian
(9.2.06) (http://www.guardian.co.uk/international/story/0,,1705464,00.html)
(4) Jeremy Smith. Europe bridles at WTO view on national biotech bans.
Reuters (8.2.06) (http://www.alertnet.org/thenews/newsdesk/L08210482.htm)
(5) EU denies had GMO moratorium, no appeal decision. Planet Ark
(9.6.05) (http://www.planetark.com/dailynewsstory.cfm/newsid/35000/story.htm)
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