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GMO CASE Approval and Marketing of Biotech Products

GMO CASE Approval and Marketing of Biotech Products. DS 291, 292, 293 ITRN 603 - INTERNATIONAL TRADE RELATIONS BY JITKA SLADKA HENNAH S. SHAMI RAMIN SEDDIQ. INTRODUCTION OF THE GMO CASE.

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GMO CASE Approval and Marketing of Biotech Products

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  1. GMO CASEApproval and Marketing of Biotech Products DS 291, 292, 293 ITRN 603 - INTERNATIONAL TRADE RELATIONS BY JITKA SLADKA HENNAH S. SHAMI RAMIN SEDDIQ

  2. INTRODUCTION OF THE GMO CASE • On May 13 2003, the US together with Canada requested consultations with the EC concerning certain measures implemented by the EC and its member states affecting imports of agricultural and food imports from the US and Canada. • On May 14 2003, Argentina followed the US and Canada and also requested consultations with the EC on the same matter. Source: www.wto.org

  3. COMPLAINANTS’ STATEMENT • Each country stated that regarding EU measures, the moratorium implemented in October 1998 on the approval on biotech products has restricted the imports of agricultural and food products. • Complainants also said that a number of EU member states maintain national marketing and import bans on biotech products even though those products have already been approved by European Union. Source: www.wto.org

  4. HISTORICAL CONTEXT • In 1998 across Europe, there was increasing public opposition to GM crops and food • A number of member states were concerned about uncertainty and had used a clause in the Deliberate Release Directive allowing a member states to ban a GMO from its territory if it has new or additional evidence of harm to the environment or human health. Source: http://www.genewatch.org/sub-531218

  5. HISTORICAL CONTEXT • The EU member states that created what became known as the moratorium called for a number issues to be addressed: • Clarity of rules in licensing of GMOs and GMO products • Due to the inability to give an assurance of safety, a facility that can immediately remove any product from the market place when hazard arise • A comprehensive labelling system to inform consumers about the GMO product. Source: http://www.genewatch.org/sub-531218

  6. WTO ISSUES Complainants claimed that the moratorium violated provisions of the WTO agricultural, technical barriers to trade (TBT) and sanitary/phytosanitary (SPS)agreements, as well as the GATT. According to the US, the measures appear to be inconsistent with the EC’s obligations under: • Articles 2, 5, 7, and 8, and Annexes B and C of the SPS Agreement • Articles I, III, X and XI of the GATT 1994 • Article 4 of the Agriculture Agreement • Articles 2 and 5 of the TBT Agreement Source: www.wto.org

  7. WTO ISSUES According to Canada, the measures appear to be inconsistent with the EC’s obligations under: • Articles 2.2, 2.3, 5.1, 5.5, 5.6, 7, and 8, and Annexes B and C of the SPS Agreement • Articles 2.1, 2.2, 2.8, 5.1, and 5.2 of the TBT Agreement • Articles I:1, III:4, X:1 and XI:1 of the GATT 1994 • Article 4.2 of the agriculture Agreement Canada also thinks that the measures at issues nullify or impair benefits accruing to Canada in the sense of Article XXIII:1(b) of the GATT 1994. Source: www.wto.org

  8. WTO ISSUES According to Argentina, the measures appear the be inconsistent with the EC’s obligations under: • Aritcles 2, 5, 7, 8 and 10, and Annexes B and C of the SPS Agreement • Articles I, III, X and XI of the GATT 1994 • Article 4 of the Agriculture Agreement • Articles 2, 5 and12 of the TBT Agreement Source: www.wto.org

  9. Sanitary and Phytosanitary Measures (SPS) Regulates measures that deal with the use of additives, contaminants, toxins, and disease-carrying organisms in food, beverages and feeds-stuffs.

  10. SPS 1) Be no more trade restrictive than required to achieve an appropriate level of protection, 2) Be applied only to the extent necessary for the protection of human and animal health 3) Be based on “scientific principles” and “sufficient scientific evidence,” 4) Be based on a risk assessment, 5) Meet the requirements of the Chapeau, and 6) Meet the obligation to at least consider adopting international, rather than unilateral, SPS standards. Source: Carlarne, 306

  11. Position of Party 1 Complaints by the United States (WT/DS291), Canada (WT/DS292) and Argentina (WT/DS293).

  12. Canada and Argentina lodged analogous complaints with regards to the de facto moratorium. Canada • Did not allege a violation of Annex C(1)(b). • Alleged a violation of Article 5.6 (requires that sanitary or phytosanitary measures be no more trade-restrictive than necessary). Argentina • Did not allege an EC violation of Annex C. • Additional claim that EC breached its obligations under Article 10.1, (requires that Members “take account of the special needs of developing country Members.”) Source: Thomison, fn 46.

  13. United States, Argentina, and Canada • Represented 96 percent of the world's acreage of genetically modified or transgenic crops in 2002. • U.S. State Department declared that by 2002 the U.S. had lost $300 million in sales of genetically modified corn and soy products alone. Source: Thomison fn. 4

  14. U.S. Complaints (1-3) • EC’s failure to approve any GMO products between October 1998 and August 2003 constituted a de facto moratorium on product approval. • With this moratorium, the EC had violated its obligations to the WTO and specifically had failed to adhere to the standards required by the SPS Agreement. • EC violation of Article 5.1 (requires that SPS measures be based on a risk assessment) thus the EC was also in violation of Article 2.2 (requires that measures be “based on scientific principles/scientific evidence” and limited to the extent necessary to protect human, animal or plant life or health. Source: Thomison, 295

  15. US Complaints (4-7) • Moratorium  violation of Article 5.5 (prohibits “arbitrary/unjustifiable distinctions if such distinctions result in discrimination or a disguised restriction on trade.”) Thus, EC was also in violation of Article 2.3 (forbids application of SPS measures “in a manner which would constitute a disguised restriction on trade.”) • Moratorium had not been enacted into law  violation of Annex B(1) and Annex C(1)(b) (require all SPS regulations to be published promptly). • Moratorium represented an outright violation of Annex C(1)(a) (no “undue delay and treatment in a no less favorable manner for imported products than for like domestic products.”) • U.S. also alleged that a number of EC product-specific measures violated WTO treaty obligations. Source: Thomison, 295

  16. European Community Position • The EC contended that the U.S. treated the international trade of GMO products, as it was exclusively a WTO legal issue barring all other international trade laws. • The EC argued that in the similar case of the U.S.-Shrimp decision, the WTO panel also relied upon other internal treaties and agreements. Source: http://www.ciel.org/Publications/BIICL_ECBiotech_7Jun07.pdf

  17. European Community Position • Treaties which the Panel referred to when deciding upon the U.S.-Shrimp case: • 1992 Convention of Biological Diversity • 2000 Cartagena Protocol on Biosafety Source: http://www.ciel.org/Publications/BIICL_ECBiotech_7Jun07.pdf

  18. European Community Position • Article 31 (3) C of the Vienna Convention states that the panel should refer to any relevant international law rulings. • However, the panel narrowly applied this article in the GMO case because it only looked at the rulings that were ratified by all WTO Members. • Many argue that this type of WTO panel ruling, leads to fragmentation for the international trading system and does not promote open dialogue. Source: http://www.ciel.org/Publications/BIICL_ECBiotech_7Jun07.pdf

  19. European Community Position • The EC also argued that the definitions and effects of toxins, additives, containments, and pests were narrowly defined by the complaining parties as described in the SPS agreements and codex standard 193. • Also, the EC argued that under Article 5.1 of the SPS agreement, it is important to note that “measures be based on assessments.” Therefore, assessments are not binding laws. Source: http://trade.ec.europa.eu/doclib/docs/2005/february/tradoc_121552.pdf

  20. European Community Position • The EC claimed in their written submissions that under the risk assessment guidelines there are three spheres: scientific, risk management, and risk communication. • The EC argued that the U.S., Argentina and Canada narrowly applied the “risk assessment” implications in the SPS agreements. Source: http://trade.ec.europa.eu/doclib/docs/2005/february/tradoc_121552.pdf

  21. Panel Decision • On July 12, 2004 the panel told the DSB that it would not be able to submit a report in six month. • Due to the scientific difficulty and the Panel was not able to complete its report until September 29, 2006 Source: www.wto.org

  22. Panel Decision • The panel found that the EC applied a general de facto moratorium on the approval of biotech products from June 1999 to August 2003. • Thus, by acting this way the European Communities were inconsistent with its obligations under Annex C(1)(a), first clause, and Article 8 of the SPS Agreement because the de facto moratorium led to unnecessary delays in the completion of EC approval procedures. Source: www.wto.org

  23. Panel Decision • In regards to safeguard measures the Panel found that the EC was inconsistent with its agreements in article 5.15.1 and 2.2 of the SPS Agreement with regard to all of the safeguard measures at issue. • The panel concluded this because, of the fact that the EC did not base their measures on risk assessment procedures outlined in the SPS Agreement and therefore lacked scientific validation. Source: www.wto.org

  24. Panel Decision • However on in regards to Article 5.1, 5.5 and 2.2 of the SPS Agreement , concerning any of the products involved, the panel found that the EC did not act inconsistently with it’s obligation. • The panel adopted its reports on November 21, 2006. Source: www.wto.org

  25. Since the Panel’s Decision • EC approval of a relevant biotech product application after the inception of the dispute brought an end to the de facto moratorium  Panel refrained from making any recommendations on the matter of the moratorium. • Panel Recommendations (request to conform) -Prod.-spec. measuresArticle 8 & Annex C(1)(a) -National safeguard measures Articles 5.1 & 5.7 Source: Thomison, 307

  26. Since the Panel’s Decision • All parties agreed that reasonable period of time for EC to implement DSB recommendations/rulings shall be 12 months from adoption of the panel reports. • November 21 deadline for the EU to implement the WTO decision. • Administration/USTR - under pressure from members of Congress to ensure that victory in the WTO case will translate into actual market access. Source: WTO

  27. INTERNATIONAL INTEREST • Expressing the support of this case by joining it as a third parties included: Australia, Brazil, China, Chile, Colombia, El Salvador, Honduras, India, Mexico, New Zealand, Norway, Peru, Thailand and Uruguay • Several WTO members registered as a third party in this dispute - including developing countries that have an interest in keeping certain flexibility in how the GM imports will be regulated. But • El Salvador and Honduras have not requested third party status • A number of countries like Peru, Australia and New Zealand maintain in their legislation restiction on GMOs and their approval. Source: http://www.genewatch.org

  28. INTERNATIONAL INTEREST • The ruling of this case will likely be considered as a precedent by future WTO panels ruling on food safety, public health and environmental health issues applied to international traded products. • Developing countries, which don’t have regulatory regimes for GMOs, will be particularly affected by the ruling. • The result of the case could also impact the regulation for other industries (chemical, etc.) Source: http://www.tradeobservatory.org/library.cfm?refid=76644

  29. Safe transfer, handling and use of LMOs (GMOs). Primary purpose: biodiversity protection. U.S. is not a party. Precautionary principle-EC defense Promotes trade liberalization/diminish impediments to free trade. Sound science and risk assessments-U.S. defense. Implications for the Global Trading SystemCartagena Protocol vs. WTO

  30. Implications for the Global Trading System • Panel decision includes wild plant and animal life within the scope of the SPS Agreement  SPS likely to appear more often on WTO scene as instrument for attacking disputed health & Envtl. protection measures. • Public opinion on GMOs in EU vs. U.S. • Cloning and the Biotechnology debate.

  31. OUR PROPOSAL • We agree with the fact that the EC was in violation of the stated WTO article, however we feel as though a nation should not be forced to import GMOs into their territory.

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