WTO Sides with U.S. on GM Crops

April 11, 2006
What the World Trade Organization decided on biotech foods in the European Union, and what it means to American producers.

In February, a dispute resolution panel of the World Trade Organization (WTO) issued a confidential draft ruling on the longstanding trade dispute between the U.S. and the European Union (EU) over biotech crops. Although the 1,050-page draft ruling was issued only to the parties as confidential, it was widely reported in the media to have favored the U.S. Within a few weeks, a leaked text of the draft ruling was freely available on the Internet.

For those who have not followed this closely or may not have time to study the ruling, here is a brief run-down.

The parties to the dispute included Canada and Argentina, who joined the U.S. in challenging an EU moratorium against the approval of new genetically modified (GM) crops. Very little planting of GM crops currently takes place in Europe. At issue was the importation of harvested GM crops and food ingredients derived from them.

The WTO agreements include an Agreement on Sanitary and Phytosanitary (SPS) Measures. The SPS agreement requires that regulatory decisions aimed at protecting human, animal, or plant life or health be grounded in good science. The point of this, of course, is to guard against protectionist trade barriers disguised as health and safety measures.

The moratorium against new GM agricultural imports was not written into EU law, and the EU disputed the U.S. claim that a moratorium existed. The panel concluded that at least between June 1999 and August 2003, when the panel was convened, a general de facto moratorium did exist, and it resulted in a failure on the part of the EU to complete individual approval procedures without undue delay.

The panel examined in detail the EU's handling of 27 applications for GM crop approvals identified by the complaining parties. It concluded that 24 of the 27 applications suffered from undue delay in the approval procedures. In many cases, a favorable scientific conclusion was reached, but a group of member states opposed to GM crops blocked final approvals.

In addition to examining the general moratorium, the panel examined complaints that Austria, Belgium, France, Germany, Italy and Luxembourg all had prohibited the marketing of certain EU-authorized GM crops in their territory. Thus, even in those rare instances where a GM crop was approved for marketing in the EU, several countries did not cooperate with the approval. They did this with reference to a legal mechanism referred to as a safeguard measure in the EU. While not disagreeing with the general concept of safeguard measures, the WTO panel concluded that in all nine instances examined, these particular safeguard measures violated the SPS agreement for lack of a real scientific basis.

The EU is entitled to appeal the panel's decision. At the time of this writing, there has been no formal announcement regarding an appeal.

Reaction from anti-GM activists has been predictably distorting and cacophonous. Despite what you may have heard, the U.S. did not challenge the EU's ability to require pre-market review and authorization of GM crops. The U.S. did not even challenge the EU's onerous labeling and traceability requirements. Further, the U.S. is not trying to force-feed anything to European consumers. The complaining parties were only trying to enforce an agreement whereby their products are permitted in European markets and vice-versa.

There is no question European consumers remain skeptical about GM crops. This feeling has been encouraged by their governments and involves more than pure questions of food safety. Because anti-GM sentiment is strong in Europe, the WTO decision may not have any impact on the rate at which the EU approves new GM crops in the future. The EU may very well take WTO sanctions over GM soybeans.

Regardless of any steps the EU takes to comply with the WTO decision, many supermarket chains in the EU will continue to refuse to carry any products containing ingredients derived from GM crops. On top of this, the EU's traceability and labeling requirements will assure that food processors avoid GM-derived ingredients in foods intended for Europe. All of this strongly indicates there will be no immediate change in transatlantic trade in GM foods.

Recognizing these realities and the limitations of the WTO dispute resolution process, this ruling is nevertheless important as an affirmation that the EU's precautionary principle does not trump the SPS agreement, and the safety concerns put forward categorically against GM foods do not survive serious scientific scrutiny.

About the Author

David Joy is a partner at the Washington, D.C. law firm of Keller and Heckman LLP. He specializes in food and drug law with emphasis on the domestic and international regulation of food, food additives, food labeling, antimicrobial pesticides, and medical devices. He is a member of the District of Columbia Bar and holds a bachelor's degree in chemistry. For more information about Keller and Heckman, visit the firm's web site at www.khlaw.com.

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