EuropaBio Q&A on the WTO trade dispute over genetically modified products (link)

February 7, 2006

Brussels, 06 Feb 2006

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What does the EU defence claim?

The EU's defence claims that delays are not "undue," but provisional, and are the result of incomplete information pertaining to risk assessments. They also deny the existence of a moratorium, citing that no official communication to this effect has ever been made.

Are the biotech products in question safe?

According to the EU's own regulatory bodies (European Commission, the European Food Safety Authority, and various EC scientific committees), yes the biotech products in question are safe. Before any GM foods (or processed food products with GM ingredients) are approved for commercialisation in the European Union, they are tested rigorously by independent expert committees. These bodies approve a new GM food only when they are completely satisfied that it is as safe as its conventional counterpart. Similar safety assessment mechanisms exist in other parts of the world.

The EU has never offered any scientific evidence to justify the moratorium or the marketing bans by the Member States.

Why did the EU's approval process for GM products really fail?

Despite extensive efforts to develop a uniform EU-wide policy for approvals and trade in GM crops and foods, negative media coverage and actions by opponents to biotechnology pushed the issue of GM foods quickly to the forefront of political debate in Europe. As such, in the late 1990s biotechnology and GMOs became politically unpopular and politicians found it difficult to approve GM crops and foods despite numerous scientific reviews that invalidated safety concerns.

The EU reacted to this by adopting the "precautionary principle" in evaluating the safety of GM products. Under the EU precautionary principle, scientific research must be exhaustive and prove categorically that a food product is safe before it can be approved for production and sale. As a result, applying the precautionary principle to GM products can cause their approval to be delayed for years or even decades.

Does the UN Biosafety Protocol not allow the use of the precautionary principle to ban the import of GMOs…?

The EU argues that its' actions were taken under both the Biosafety Protocol and the WTO SPS Agreement. The U.S. argues that Protocol should not be used in the WTO ruling because it is not mentioned in any of the SPS Agreement. Thus, the answer to this question will depend on what the panel decides on how these relate to each other, if at all.

The Protocol does not contain any specific provision to legitimizes a ban. In fact, the Preamble of the Protocol "recognizes that modern biotechnology has great potential for human well-being if developed and used with adequate safety measures for the environment and human health." It also says that "trade and environment agreements should be mutually supportive to achieve sustainable development."

The EU has approved a small number of product applications since the beginning of the case, does that not mean that the moratorium has ended?

No. The fact that the European Commission has approved a small number of product applications since this panel was established is no indication that the moratorium has ended because:

The vast majority of products remain stalled at various stages of the approval process. It cannot be determined that a moratorium has ended until the EC's approval procedures are fully operational and all applications are moving through those procedures to a final decision without undue delay.

Actions taken by the European Commission since the Panel was established are not relevant to its decision. A WTO panel is generally competent to consider measures in existence at the time of its establishment. The Panel's obligation, therefore, is to render a decision on the EC's measures as they existed on August 29, 2003.

Can individual countries put in place pre-marketing approval procedures for agricultural products?

Yes. The US, Canada and Argentina are not challenging the right of a Member to maintain pre-marketing approval procedures for agricultural products (indeed, all three Complainants have them). Nor are the complainants challenging the EC's underlying regulations. Rather, the claims are based on the EC's failure to implement those regulations and procedures in a WTO consistent manner, which has resulted in a violation of its WTO commitments.

What happens next?

Once the parties involved receive the interim report:

Both sides have one week to ask the panel for a review of the interim report.

The period of review must not exceed two weeks. During that time, the panel may hold additional meetings with the two sides.

A final report is submitted to the two sides and no longer than three weeks later, it is circulated to all WTO members. If the panel decides that the disputed trade measure does break a WTO agreement or an obligation, it recommends that the measure be made to conform with WTO rules. The panel may suggest how this could be done however these recommendations are non-binding and it will be up to the EU to decide how to apply these in practice in accordance with current EU regulations.

The report becomes the Dispute Settlement Body's ruling or recommendation within 60 days unless a consensus rejects it.

Can either side appeal the ruling?

Both sides of the dispute can appeal a panel's ruling. Appeals have to be based on points of law such as legal interpretation — they cannot re-examine existing evidence or examine new issues.

Each appeal is heard by three members of a permanent seven-member Appellate Body set up by the Dispute Settlement Body and broadly representing the range of WTO membership. Members of the Appellate Body have four-year terms. They have to be individuals with recognized standing in the field of law and international trade, not affiliated with any government.

The appeal can uphold, modify or reverse the panel's legal findings and conclusions. Normally appeals should not last more than 60 days, with an absolute maximum of 90 days.

The Dispute Settlement Body has to accept or reject the appeals report within 30 days — and rejection is only possible by consensus.

What happens if the appeal is rejected?

If the EU loses, it must follow the recommendations of the panel report or the appeals report. It must state its intention to do so at a Dispute Settlement Body meeting held within 30 days of the report's adoption. If complying with the recommendation immediately proves impractical, the EU will be given a "reasonable period of time" to do so. If it fails to act within this period, it will be subject to retaliation measures and will have to enter into negotiations with the US, Canada and Argentina in order to determine mutually-acceptable compensation — for instance, tariff reductions in areas of particular interest to the complaining side.

And if the appeal is accepted..?

If the EU's appeal is accepted by the WTO then the panel of the Dispute Settlement Body will be required to start a new procedure on the basis of these claims. Like this particular ruling, this could take several years….

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Full text

For further information, contact:

Simon Barber
Director Plant Biotech Unit
Tel: +32 2 735 03 13
Mob: +32 476 442 420
e-mail:s.barber@europabio.org

Alina Cornea
Communications Assistant
Tel: +32 2 739 1181
Mob: +32 473 660 558
Fax: +32 2 735 4960
e-mail: a.cornea@europabio.org

EuropaBio, Avenue de l'Armée 6, B-1040 Brussels, Belgium

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