WTO Dispute DS291: The Status of Genetically Modified Foods (GMO’s) in the EU.

1. WTO Dispute DS291: The Status of Genetically Modified Foods (GMO’s) in the EU. Presentation by: Asli Bener, Jillian Ryan, and JM Saxton-Ruiz March 6, 2005

2. Agenda • History and context of the case • Main WTO issues • Specific EU legislation involved • Specific WTO agreement and provisions involved • The position of the main parties • The decisions • Recommended resolutions

3. What are GMO’s? • Genetically Modified Organisms (GMO's) are organisms in which the genetic material (DNA) has been altered in a way that does not occur naturally by mating or natural processes. Typically genes are added to a plant’s DNA, which produce proteins conferring beneficial traits, such as herbicide tolerance (Round Up Ready) or insect protection (Bt) to the crop. • There are a number of GM crops in production; namely sugar beet, corn, cotton, flax, melon, papaya, potato, rapeseed, rice, soyabean, squash and tomato.

4. Pro-GMO groups claim that GMO crops can give citizens healthier food, produced in a more efficient, environmentally-friendly way. They believe that giving the go-ahead to GMO crops will boost the global economy and encourage biotechnology companies to invest in research and development. Anti-GMO groups argue that only the multinational biotech companies will reap any reward, and say that few farmers will benefit. They believe the potential risks of GMO crops to health and the environment outweigh the risks of going ahead. GMO Debate VS

5. Agricultural Biotechnology Industry • 2005 marked the 10th anniversary of the commercialization of biotechnology crops. • Over the past 10 years, the accumulated global biotech crop areas exceeded 1.17 billion acres – equivalent to approximately half of the total land area of the US. • Over 1/3 of the acres of biotech crops planted in 2005 were in developing countries • In 2005, 60% of soybeans planted globally were biotech, 24% of corn, 11% of cotton, and 5% of rapeseed. In the US, 85% of soybeans, 46% of corn, and 76% of cotton were biotech crops. • Leading producers of biotech crops in the world include: • The US: 123 million acres currently under cultivation • Argentina: 42 million acres • Brazil: 23 million acres • Canada: 14 million acres • China: 8 million acres • The global commercial value of biotech crops in 2005 was estimated at US$50 billion.

6. US percentage of crops

7. Background • The US argues that the European Union has pursued policies that have undermined the development and use of agricultural biotechnology. • In the late 1990s, six member states banned imports of biotech corn and rapeseed approved by the European Union. • In 1998, member states began blocking EC regulatory approval for new agricultural biotech products. • This moratorium effectively prohibits most US corn and corn product exports to Europe.

8. Background • The WTO allows for member to establish approval procedures for new agricultural products to determine the safety of these products. • Decisions are to be based on scientific principles and evidence, and must be made without undue delay. • But the EU moratorium on new biotech products and the member state product bans are not based on scientific evidence. • In addition, by not allowing its approval system to operate, theEU is imposing undue delays on biotech approvals. • The United States has requested the EU apply a scientific, timely, rules-based review and approval process to agricultural biotech product applications.

9. Key Facts of Dispute DS291 Summary of Case: Complaints about the status of GMO approvals in the EC and the national restrictions on the marketing of certain GMO varieties. Complainant: United States Respondent: European Communities Third Parties: Argentina, Australia, Brazil, Canada, Chile, China, Chinese Taipei, Colombia, El Salvador, Honduras, Mexico, New Zealand, Norway, Paraguay, Peru, Thailand, Uruguay Relevant WTO Provisions: GATT (I,III,X,XI) SPS (2,5,7,8, Annexes B and C) Agriculture (4) TBT (2,5)

10. Timeline • Oct 1998: The EU Commission and member states stopped approving all agricultural biotech crops. • June 1999: EU members announced a moratorium on new approvals of agricultural biotech products. Ministers from Denmark, France, Greece, Italy and Luxembourg declared they will do whatever is necessary to ensure that new approvals are suspended until new rules are in place. • June 2000: French Environmental Minister Dominique Voynet insisted on the need for a liability scheme for biotech products. • July 2000: EU Environmental Ministers met at an informal session and supported continuing the EU moratorium at least until the Commission prepared proposals for labeling and for tracing biotech products in foods such as vegetable and corn oils.

11. Timeline • July 2001: The Commission produced its traceability and labeling proposals. The Commission assured the United States it would lift the moratorium promptly. • Oct 2001: Several EU member states again took actions to prevent approvals. At an informal meeting of the Environment Council, eight Member States – France, Austria, Finland, Luxembourg, Denmark, Italy, the Netherlands and Sweden –rejected the Commission’s plan to consider new authorization and declared that the new regulations must be in force before they would allow the approval process to operate. • Oct 2002: A new approval process (Directive 2001/18) was implementedon Oct. 17, 2002; however, the EU Environment Commissioner warned some member states opposed to GMO’s would find another obstacle. • Dec 2002: The European Council agreed to a Common Position on traceability and labeling legislation. The Danish delegation declared the moratorium should remain in place until the EU develops and implements special environmental liability legislation for biotech products.

12. Timeline • May 2003: Consultations were requested by the United States, Argentina, and Canada. • Aug 2003: At the request of the United States, Argentina and Canada, the WTO establishes a Panel to examine the EU’s moratorium on new biotechnology approvals and the Member State bans. • Mar 2004: After disputing parties are unable to reach agreement on a slate of panelists, WTO Secretary General selects the three panelists in the dispute. • 2004–2005: The European Commission approves a handful of biotech events (approved for food and feed: Bt11- sweet corn, NK603 - corn, MON863 - corn, GT73 - rapeseed; approved for animal feed only: Pioneer 1507 - corn).

13. Timeline • Feb 2006: WTO confidential report to be released in March is leaked by the press. • Mar 2006: The Final Report is scheduled for release to the disputing parties. Depending on the time needed for the parties to provide comments on the interim report, this date could be delayed. • Mid-2006: Release of final report in 3 official WTO languages – will trigger beginning of possible appeal process. • Late 2006 or Early 2007: Completion of a possible appeal to the WTO Appellate Body

14. EU Legislation Involved • EU legislation on GMOs has been in place since the early 1990s. This specific legislation has two main objectives: • to protect health and the environment and • to ensure the free movement of safe and healthy genetically modified products in the European Union. • The entire corpus of GMO legislation has recently been amended, leading to the creation of a new legal framework. Its main legal instruments are as follows: • Directive 90/219/EEC, as amended by Directive 98/81/EC, on the contained use of genetically modified microorganisms (GMMs). • Directive 2001/18/EC on the deliberate release into the environment of GMOs applies to the experimental release of GMOs into the environment and the placing on the market of GMOs. • GMOs and food products derived from GMOs which are placed on the market must also satisfy labeling and traceabilityconditions. These conditions are laid down in Regulation (EC) No 1829/2003 and Regulation (EC) No 1830/2003 concerning the traceability and labelling of genetically modified organisms and the traceability of food and feed products produced from genetically modified organisms and amending Directive2001/18/EC.

15. Relevant WTO Provisions • Sanitary and Phytosanitary (SPS) Agreement - Articles 2, 5, 7 and 8, and Annexes B and C • GATT 1994 - Articles I, III, X and XI • Agriculture Agreement - Article 4 • Technical Barriers to Trade (TBT) Agreement - Articles 2 and 5

16. GATT and Agriculture Agreement GATT • Article I – Most Favored Nation Treatment • Article III – National Treatment • Article X – Publication and Administration of Trade Regulations • Article XI – General Elimination of Quantities Restrictions Agriculture Agreement • Article 4 – Market Access to Agriculture products

17. SPS & TBT The Goal of the SPS agreement is to: • Recognize the sovereign right of Members to provide the level of health protection they deem appropriate; and • Ensure that SPS measures do not represent unnecessary, arbitrary, scientifically unjustifiable, or disguised restrictions on international trade. The Goal of the TBT agreement is to: • The Technical Barriers to Trade (TBT) Agreement seeks to ensure that product specifications, whether mandatory or voluntary (known as technical regulations and standards), as well as procedures to assess compliance with those specifications (known as conformity assessment procedures), do not create unnecessary obstacles to trade.

18. SPS & TBT Measures SPS Measures typically deal with issues such as: • toxic substances in food or drink • certification: food safety, animal or plant health • other sanitary requirements for imports (e.g. imported pallets used to transport animals) TBT measures typically deal with: • labeling of composition or quality of food, drink and drugs • quality requirements for fresh food • volume, shape and appearance of packaging

19. US Argument • The US case has two principal elements: • A challenge of the EU’s moratorium on approving biotech varieties for sale or use in the EU; and • A challenge of national bans of products the EU has already approved. • Under WTO rules, when WTO members establish approval processes, they take on obligations to operate those approval processes in a manner that is (1) based on science and (2) not subject to undue delays. • The US argues that the EU moratorium is not based on science

20. EU Response • The EU has stated there is no moratorium on “safe GM products” and is one of the largest importers of GMOs and derived food and feed. • The EU approval process may appear to be lengthy for some countries which “adopt a more lenient approach” towards food and environmental safety issues. • The WTO challenge on GMOs is “unhelpful and unfounded”. The EU remains confident that its regulatory regime over GMOs and GM food and feed is fully compatible with its international commitments. • The EU argues that a sovereign body such as the EU and its Member States has the right to enact its own regulations on the food that its citizens would eat, providing that the measures are compatible with existing international rules and based on clear scientific evidence. • The EU considers that major GMO producers such as the US should adopt a co-operative approach to the development of a sound international legal framework for these products, instead of “taking hostile steps at the WTO”.

21. EU Response to the Case is Inconsistent • The EU has stressed scientific uncertainty and precautionary principle • Contradicts studies made by EU bodies • Lift national bans and approve GMO’s • Bt 11 sweet corn, NK603/MON863 corn, GT73 rapeseed; approved for animal feed only: Pioneer 1507 corn

22. Interest Groups • Green Peace • EuroActiv • Planet Ark • Friends of Earth International • WHO, Codex Alimentarius, FAO, OECD • Media: Weekly Trade News Digest, BBC

23. Conclusion • EU has already removed moratorium on imports of GMOs (May 2004) • WTO issued 1,050 page decision in February 2006 • WTO will issue public decision at the end of March 2006 • No clear winner

24. US Response to leaked WTO report • "Today, news reports have stated the World Trade Organization (WTO) has preliminarily found the European Union has a de facto moratorium on agricultural biotechnology products that is inconsistent with WTO rules. The facts on agricultural biotechnology are clear and compelling. It is a safe and beneficial technology that is improving food security and helping to reduce poverty worldwide," said U.S. Trade Representative Rob Portman. "We believe agricultural biotechnology products should be provided a timely, transparent and scientific review by the European Union, and that is why Canada, Argentina and the United States brought the case in the first place." • "The continuing adoption of agricultural biotechnology worldwide is evidence it provides tremendous benefits to farmers and rural communities. Global biotechnology acreage has increased more than 50 fold in the first decade of commercialization, with more than one billion acres planted," said U.S. Agriculture Secretary Mike Johanns. "More than 8.5 million farmers in 21 countries, including five EU nations, are reducing pesticide use, receiving higher yields and preventing erosion by planting biotech varieties. Ninety percent of these farmers are in developing countries, adding to rural incomes, promoting development and preserving our environment."

25. Proposal • Decide between Sound Science Principle vs. Precautionary Principle • The EU must decide on an overarching policy and enforce it among member nations • EU and the US should collaboratively work toward new regulatory approaches such as positive labeling to deal with the increasing number of GM food products.

26. Sources and For More Information Visit… • USTR Website - www.ustr.gov • WTO Website – www.wto.org • European Commission Website – http://europa.eu.int/index_en.htm • Friends of the Earth Website – www.foe.org • CRS Issue Brief for Congress