WTO case on GMOs

Brussels, 18 Jun 2003

GENERAL LINE

The EU dismisses the decision to take the GMO issue to WTO dispute settlement as legally misguided, economically unfounded and politically unhelpful.

The treatment of genetically-modified material is a multi-faceted matter of high social, economic and political concern all throughout the world. Trying to depict this issue as a mere commercial matter is clearly a reduction of a complex situation to a single question.

Each WTO Member has the legitimate right to strike the right balance between the different interests at stake. The US and the other complainants must not seek to influence the sovereign decisions of other countries the way they do. The EU will decide on the approval and regulation of GMOs in a free and responsible manner. Through its actions in the GMO field, the EU will always aim at responding to the legitimate interests of its citizens, not to narrow economic interests.

There are ongoing efforts at the international level to lay down common principles on GMOs. The Cartagena Protocol on Biosafety is, at present, the most significant international response to this challenge. This Protocol establishes the international principles that will govern the transfer, handling and use of GMOs with a particular focus on transboundary movements and creates an enabling environment for the environmentally sound application of biotechnology. International co-operation is certainly more appropriate than a trade dispute as a means to build a sound international framework for addressing the GMO issue. The countries that have requested WTO consultations should rather seek to promote international co-operation, instead of taking WTO action as a means to seek to impose a certain approach to GMO regulation on the EU and other countries.

The EU is engaged in a substantial review of its legislation on GMOs in order to set up a more rigorous framework for the assessment, handling and use of those products. New rules, in place since October 2002, have enabled companies to submit revised applications for authorisations, which are currently being processed with a view to deciding on more approvals. Food containing GMOs or produced from GMOs can also be authorised and marketed pursuant to existing EU procedures.

Even though we are puzzled by the motives for requesting WTO consultations at this stage, the EU will participate constructively in the consultations with Argentina, Canada and the US. But this will not distract the EU from the implementation of its current legislation on GMOs and the completion of its regulatory framework with the adoption of new legislation on genetically-modified food, traceability and labelling of GMOs.

Main issues

1. The challenges posed by modern technologies of genetic modification require an integrated co-operative approach, not a trade dispute.

The issues raised in the public debate about the new technologies of genetic modification range across a wide spectrum of concerns:

Human and animal health (e.g. impacts resulting from allergenic substances in GM food products, from the susceptibility of GMOs to toxin-producing microbes, from the introduction of antibiotic-resistant genes in new plant varieties, etc.)

Impact on the environment (e.g. impact on agricultural soil, possible proliferation of transgenic genes in wild plants and animals, impact on genetic diversity of species and on biodiversity, etc.)

Socio-economic aspects (e.g. impact of the new technology on the survival of traditional and biological agricultural models, impact on indigenous and local communities, concerns about intellectual property and the dependency of farmers on corporations, etc.)

Ethical issues (e.g. concerns about human manipulation of the constituents of living matter, freedom of choice, etc.)

The new technologies of genetic modification are therefore a multifaceted reality. Public authorities must respond to all the challenges posed by the new technology both at the national and the international level.

There are ongoing efforts at the international level to lay down common principles on the use of GMOs. The Cartagena Protocol on Biosafety is, at present, the most significant international response to this challenge.

The EU has always tried to favour co-operative solutions whenever third countries have expressed concerns about the impact of different national approaches to GMOs on international trade on agricultural products. In particular, the EU has tried to establish a dialogue with the US on biotechnology, but the US have showed little interest in addressing the GMO issue in a co-operative manner:

At the initiative of Presidents Prodi and Clinton, an EU-US consultative forum on biotechnology was established in 2000. The Forum presented a report in December 2000 including a set of recommendations. Since the publication of the Forum's recommendation, the US has not been prepared to engage in any follow-up work with the EU. The US has also stalled any technical co-operation in the biotech group of TEP (Transatlantic Economic Partnership).

The US has expressed concerns that the different pace of GMO approvals in the EU and the US affects US corn exports. In the US, ~35% of the maize is GM maize but only 1-2% of the production is segregated. Therefore, ~98% of the US maize may contain GM maize varieties, some of which have not been approved in other countries. However, the US has consistently refused to implement any measures to segregate and control the spread of different GM maize varieties and, consequently, its exports are affected.

The EU considers the decision to take the GMO issue to the WTO as a wrong step. Trying to depict this issue as a mere WTO matter is a reduction of a complex situation to a single commercial question. The EU considers that international co-operation is certainly more appropriate than a trade dispute as a means to build a sound international framework for addressing the GMO issue. That is essential to build public confidence on GMOs and achieve the full potential of biotechnology.

2. Potential and risks of the new technologies of genetic modification. Need for a rigorous regulatory framework.

The new technologies of genetic modification have a great potential to improve the agricultural performance of plants and animal species, and eventually their value for consumers. The first GMO varieties on the market have typically been modified for two characteristics of significant value for farmers: insect resistance and herbicide resistance. However, current research and development also aims at enhancing characteristics of direct value to consumers. In the future, it may be possible to obtain food products with improved nutritional quality, such as higher vitamin content.

Notwithstanding the positive potential of the new technology, there are also issues of concern that must be appropriately addressed by public authorities (see above). The experience acquired so far through the handling and use of GMOs also shows the need for a rigorous regulatory framework based on pre-marketing approval, subsequent controls and periodic re-assessments. Two examples:

According to a 2001 report of the Royal Society of Canada, herbicide-resistant GM oil seed rape plants are beginning to develop into a major weed problem in some parts of the Prairie Provinces of Canada. Some weed scientists have predicted that volunteer GM oil seed rape could become one of Canada's most serious weed problems because of the large areas of the Prairie Provinces that are devoted to this crop. Furthermore, recent evidence indicates that crosses between different kinds of herbicide-resistant oil seed rape (each kind resistant to a different herbicide) have resulted in the unintentional origin of plants with multiple resistance to two, and in some cases three, herbicides.

In October 2000, GM corn ("StarLink") not approved for human consumption was found to have entered in large amounts the US food supply chain. More than 300 product brands had to be recalled from supermarkets by US authorities. The incident prompted a review of the potential effects on health of the gene inserted in the corn, resulting in a finding that the gene was likely to be a potential allergen. At the strong urging of US authorities, StarLink corn has been withdrawn also from non-food, agricultural uses.

The EU wants to address the challenges posed by modern technologies of genetic modification. Its regulatory system provides a reliable framework for GMOs, meeting demands for human and animal health and the environment in the EU. Under the EU system, the prospective effects of GMOs on human, animal and plant health and the environment have to be scientifically assessed before being approved for marketing. Companies intended to market GMOs in the EU must first submit an application to a Member State including a full environmental risk assessment. The assessment is sent to the European Commission who circulates it to all other Member States. In case of objections the European Commission seeks an opinion from the Scientific Committee (and the European Food Safety Authority in the future) and takes then a decision. A total of 18 GMOs have already been authorised in the EU, and more applications are currently being examined.

The EU is also finalising the adoption of rules on labelling and traceability, which aim at ensuring appropriate post-approval controls, responding to citizens' demands for more and better information on GMOs, and the need to facilitate the freedom of choice between new and more traditional agricultural products.

3. Third Countries' allegations about a so-called "moratorium" on GMO approvals

EC legislation does not provide for a "moratorium" on GMO approvals. The relevant EU legislation does not foresee a suspension of the approvals of GMOs and GM food. The EU has authorised GM varieties in the past and is currently processing applications under its new legislation on the deliberate release of GMOs into the environment (Directive 2001/18/EC ). GM food applications are also being considered for approval under the 'Novel Foods' Regulation (Regulation 258/97/EC ).

The allegations on the existence of a 'moratorium' on GMO approvals refer to the fact that from 1998, the pace of GMO approvals has been affected by the review (at the EU level and internationally) of risk assessment procedures in the light of scientific developments and the experience gained in the management of GMOs. Any statements about the existence of a 'moratorium' in the EU are no more than the reflection of individual positions and concerns on GMO approvals. At no point in time the EU has enacted a 'moratorium'. On the contrary, the EU has made a significant effort to review its regulatory framework in order to ensure that new authorisations are granted following a rigorous examination of the potential impact of specific GMO varieties on human health and the environment.

Several third countries (some of which have paradoxically declared their intention to be third parties in the WTO case against the EU) have implemented 'moratoria' within their respective territories:

For several years, New Zealand has implemented a full 'moratorium' on the commercial release of genetically modified organisms while further research on their potential impact is undertaken. The 'moratorium' is still in place (Hazardous Substances and New Organisms Act).

Some Australian states have put in place 'moratoria' on the approval and use of GMOs. Most notably, Tasmania has just extended its 'moratorium' on commercially-grown GM food crops for another five years (until 2008).

According to a letter from Peru's Ministry of Trade to the European Commission, "[under] the "Law on Transgenic Foods and Genetically Modified Organisms", it is strictly prohibited in Peru to import, by any means, produce, sell and/or market transgenic foods and genetically modified organisms (GMOs) for human or animal consumption or for sowing" (letter from Mr. Juan Carlos Gamarra, dated 30 September 2002).

4. National safeguard measures

EU legislation on GMOs has set up a single European approval system for GMO varieties. However, the legislation also foresees a 'safeguard' mechanism for cases in which new information on the health or environmental risks of approved varieties becomes available. In those cases, EU Member States may limit or ban the use and sale of GMOs on a temporary basis within their respective territories.

Some individual EU Member States have adopted 'safeguard' measures with regard to specific varieties of GMOs on health and environment grounds.

EU Member States' decisions on this issue can be reviewed through an EU examination procedure in order to ensure that the legislative requirements have been met.

5. GMOs and developing countries: the food-aid issue

The EU believes that every country has the sovereign right to make decisions on GMOs in accordance with the values prevailing in its society. This principle obviously applies to both developed and developing countries. It is the legitimate right of developing countries' governments to fix their own level of protection and to take the decision they deem appropriate to prevent unintentional dissemination of GM seeds.

A number of developing countries have chosen to use GMOs for agricultural purposes. A developing country – Argentina- is the second largest producer of agricultural GMOs in the world. It should be noted that, since GM maize seeds were introduced in Argentina, Argentinean maize exports to the EU have considerably increased.

However, GM crops of interest to most developing countries, such a drought tolerant, acid soil tolerant crops are still in laboratories. Commercially available GM crops are largely dominated by herbicide tolerant crops (75%) and insect resistant crops (17%). These varieties can be useful for big farmers in developing countries, but they are not likely to improve the situation of smaller farmers. Indeed, the use of herbicides by small farmers in the developing world is very limited while insecticides are generally used on commercial crops such as cotton but not on staple crops. In addition, biotechnology alone will not be able to address all the underlying causes of food insecurity. Low income, poor infrastructures, lack of access to credit, etc., are all aspects at the roots of food crisis and can only be addressed by long term sustainable development.

Some developing countries, including a large number African countries suffering a shortage of food, have requested main donors of food aid to avoid providing GMO food, for a combination of reasons (human health concerns, environmental consideration, the risk of spread of transgenes into their own maize production, and the repercussion such a spread could have on regional and international trade and Intellectual Property Rights concerns). The EU finds it unacceptable that the legitimate concerns of those countries are used by the US as a means of propaganda against the EU policy on GMOs.

Food aid to starving populations should be about meeting the urgent humanitarian needs of those who are in need. It should not be about trying to advance the case for GM food abroad, or planting GM crops for export, or indeed finding outlets for domestic surplus, which is a regrettable aspect of the US food aid policy. In the Southern African food crisis, the US has even refused to fund milling costs (20 to 25 US$ per ton of grain), as requested by Zimbabwe and Mozambique in order to avoid any possible concern about the spread of transgenes in those countries.

The EU policy is to source food aid for emergency situation as much as possible in the region, thus contributing to the development of local markets, providing additional incentives for producers and ensuring that products distributed closely match local consumption habits. In the Southern African crisis so far preliminary figures indicate that of the 7,000 MT that the EC has committed roughly 174,000 MT (63%) have been purchased and of these at least 97% have been purchased in the Eastern or Southern Africa region.

DG Trade
http://europa.eu.int/comm/trade/goods/ag ri/pr170603_en.htm