Genetically Modified Organisms

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Genetically Modified Organisms
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US-EU GMO Case Jessica Perotti Egla Taye Roberto
Valencia
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Measures Affecting the Approval and Marketing of
Biotech Products
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• DS-291,DS-292, DS-293

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History and Context
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• Background
• Beginning in October 1998, The European
  Communities (EC) applied an EU-wide moratorium on
  the approval of any new genetically engineered
  biotech products
• This moratorium restricted the imports of
  agricultural and food products from the US,
  Canada, and other countries involved with
  complaint
• The refusal by the EC to admit GMO biotech food
  and feed products into their markets has arguably
  resulted in one of the most volatile trade
  disputes

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History and Context
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• Terms
• Genetically Modified Organism(GMO)- is an
  organism whose genetic material has been altered
  using genetic engineering techniques
• Genetically Modified Foods(GM)-are foods made
  from crops that have been given specific traits
  through genetic engineering
• Typically, Genetically Modified Foods are plant
  products soybean, corn, canola, and cottonseed
  oil.

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History and Context
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• Impact
• The de facto ban has halted over 300 million in
  US corn shipments and also threatens trade in soy
• Products from livestock that are fed with GMO are
  also at risk, as well as flour and flour-based
  exports, grain-based products, vegetable oil
  derived from soybeans, and pet food.

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History and Context
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• Request for Consultations
• On 13 May 2003, US and Canada requested
  consultations with the EC concerning certain
  measures taken by the EC and its member States
  affecting imports of agricultural and food
  imports from the US and Canada
• Consultations were held on 13 June 2003
• According to the US the measures at issue
  appeared to be inconsistent with the ECs
  obligations under several articles that will be
  discussed later.
• Canada and Argentina also consider that the
  measures at issue nullify or impair benefits and
  are inconsistent with ECs obligations under
  several articles

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History and Context
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• Establishment of Panel
• On 7 August 2003, US, Canada, and Argentina each
  requested the establishment of a panel
• At a meeting on 18 August 2003, the Dispute
  Settlement Body (DSB) deferred the establishment
  of the panels
• Further, to second requests to establish a panel
  from the US, Canada, and Argentina, the DSB
  finally established a single panel at its meeting
  on 29 August 2003
• On 23 February 2004, the US, Canada, and
  Argentina requested the Director-General to
  compose the panel. On 04 March 2004,
  the Director-General composed the panel

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History and Context
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• Parties Involved
• In the first dispute (WT/DS291), with the US as a
  complainant-Australia, Argentina, Brazil, Canada,
  Chile, Colombia, India, Mexico, New Zealand and
  Peru requested to join the consultations.
• In the second dispute (WT/DS292), with Canada as
  the complainant- Australia, Argentina, Brazil,
  India, Mexico, New Zealand and the US requested
  to join the consultations
• In the third dispute(WT/DS293), with Argentina as
  the complainant- Australia, Brazil, Canada,
  India, Mexico, New Zealand and the US requested
  to join the consultations.

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History and Context
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• Delays
• On 12 July 2004, the Chairman of the Panel
  informed the DSB that it would not be able to
  complete its work in six months, due to the
  parties common request for additional time to
  prepare rebuttals
• On 18 August 2004, the Panel estimated it would
  issue its final report to the parties by the end
  of March 2005. The delay was due to the parties
  common request for additional time to prepare
  their rebuttals as well as the Panels decision
  to seek scientific and technical expert advice
• On 2 November 2004, the Panel decided it would
  not be possible to issue its final report to the
  parties until the end of June 2005.

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History and Context
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• More Delays
• On 13 June 2005, the Panel estimated it would
  issue its final report to the parties by the end
  of October 2005
• On 11 August 2005, the Panel estimated it would
  issue its final report on 21 December 2005.
• On 30 March 2006, Chairman informed the DSB that
  it would not be possible to issue its final
  reports to the parties at the end of March 2006
  as the Panel has yet to receive further comments
  from the parties on its interim reports
• Finally, on 29 September 2006, the panel reports
  were circulated to the Members.

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History and Context
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• Result of Panel
• The panel found that the EC adopted a de facto,
  across-the-board moratorium on the final approval
  of biotech products, starting in 1999 up through
  the time the panel was established in August 2003
• The Panel agreed with the US, Argentina, and
  Canada that the disputed measures of the EC, are
  inconsistent with the obligations set out in the
  SPS (Application of Sanitary and Phytosanitary
  Measures) Agreement
• The Panel found that the EC had presented no
  scientific or regulatory justification for the
  moratorium, and thus that the moratorium resulted
  in undue delays in violation of the ECs
  obligations under the SPS Agreement

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Contested Issue of EC Practice

• The EC had maintained a moratorium on the
  approval of biotech products that restricted
  imports of agricultural and food products from
  the US and Canada.
• Certain EC member states had maintained national
  import and marketing bans on biotech products
  despite approval by the EC for import and
  marketing in the EC

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Relevant WTO Obligations

• Argentina
• Articles 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)
• Articles 2, 5 and 12 of the TBT Agreement
• Article 4 of the Agriculture Agreement
• Canada
• Articles 2.2, 2.3, 5.1, 5.5, 5.6, 7 and 8, and
  Annexes B and C of the SPS Agreement
• Articles I1, III4, X1 and XI1 of the GATT
  (1994)
• Articles 2.1, 2.2, 2.8, 5.1 and 5.2 of the TBT
  Agreement
• Article 4.2 of the Agriculture Agreement
• United States
• 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)
• Articles 2 and 5 of the TBT Agreement.
• Article 4 of the Agriculture Agreement

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Agreement on the Application of Sanitary and
Phytosanitary Measures (SPS)

• Basic Rights and Obligations
• Article 2.2
• Members shall ensure that any sanitary or
  phytosanitary measure is applied only to the
  extent necessary to protect human, animal or
  plant life or health, is based on scientific
  principles and is not maintained without
  sufficient scientific evidence.
• Article 2.3
• Members shall ensure that their sanitary and
  phytosanitary measures do not arbitrarily or
  unjustifiably discriminate between Members where
  identical or similar conditions prevail and the
  measures shall not be applied in a manner which
  would constitute a disguised restriction on
  international trade.

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Agreement on the Application of SPS Contd

• Assessment of Risk and Determination of the
  Appropriate Level of Sanitary or Phytosanitary
  Protection
• Article 5.1
• Members shall ensure that their sanitary or
  phytosanitary measures are based on an
  assessment of the risks to human, animal or
  plant life or health, taking into account risk
  assessment techniques developed by the relevant
  international organizations.
• Article 5.5
• With the objective of achieving consistency in
  the application of the concept of appropriate
  level of sanitary or phytosanitary protection
  against risks to human life or health, or to
  animal and plant life or health, each Member
  shall avoid arbitrary or unjustifiable
  distinctions in the levels it considers to be
  appropriate in different situations, if such
  distinctions result in discrimination or a
  disguised restriction on international trade.
• Article 5.6
• When establishing or maintaining sanitary or
  phytosanitary measures to achieve the appropriate
  level of sanitary or phytosanitary protection,
  Members shall ensure that such measures are not
  more trade-restrictive than required to achieve
  their appropriate level of sanitary or
  phytosanitary protection, taking into account
  technical and economic feasibility.

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Agreement on the Application of SPS Contd

• Transparency
• Article 7
• Members shall notify changes in their sanitary
  or phytosanitary measures and shall provide
  information on their sanitary or phytosanitary
  measures in accordance with the provisions of
  Annex B.
• Control, Inspection and Approval Procedures
• Article 8
• Members shall observe the provisions of Annex C
  in the operation of control, inspection and
  approval procedures, including national systems
  for approving the use of additives or for
  establishing tolerances for contaminants in
  foods, beverages or feedstuffs, and otherwise
  ensure that their procedures are not inconsistent
  with the provisions of this Agreement.

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General Agreement on Tariffs and Trade (GATT)

• General Most-Favoured-Nation Treatment
• Article I1
• With respect to customs duties and charges of
  any kind imposed on or in connection with
  importation or exportation or imposed on the
  international transfer of payments for imports or
  exports, and with respect to the method of
  levying such duties and charges, and with respect
  to all rules and formalities in connection with
  importation and exportation, and with respect to
  all matters referred to in paragraphs 2 and 4 of
  Article III, any advantage, favor, privilege or
  immunity granted by any contracting party to any
  product originating in or destined for any other
  country shall be accorded immediately and
  unconditionally to the like product originating
  in or destined for the territories of all other
  contracting parties.
• National Treatment on Internal Taxation and
  Regulation
• Article III4
• The products of the territory of any contracting
  party imported into the territory of any other
  contracting party shall be accorded treatment no
  less favorable than that accorded to like
  products of national origin in respect of all
  laws, regulations and requirements affecting
  their internal sale, offering for sale, purchase,
  transportation, distribution or use. The
  provisions of this paragraph shall not prevent
  the application of differential internal
  transportation charges which are based
  exclusively on the economic operation of the
  means of transport and not on the nationality of
  the product.

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General Agreement on Tariffs and Trade (GATT)
Contd

• Publication and Administration of Trade
  Regulations
• Article X1
• Laws, regulations, judicial decisions and
  administrative rulings of general application,
  made effective by any contracting party,
  pertaining to the classification or the valuation
  of products for customs purposes, or to rates of
  duty, taxes or other charges, or to requirements,
  restrictions or prohibitions on imports or
  exports or on the transfer of payments therefor,
  or affecting their sale, distribution,
  transportation, insurance, warehousing
  inspection, exhibition, processing, mixing or
  other use, shall be published promptly in such a
  manner as to enable governments and traders to
  become acquainted with them.
• General Elimination of Quantitative Restrictions
• Article XI1
• No prohibitions or restrictions other than
  duties, taxes or other charges, whether made
  effective through quotas, import or export
  licenses or other measures, shall be instituted
  or maintained by any contracting party on the
  importation of any product of the territory of
  any other contracting party or on the exportation
  or sale for export of any product destined for
  the territory of any other contracting party.

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Agreement on Technical Barriers to Trade (TBT)

• Preparation, Adoption and Application of
  Technical Regulations by Central Government
  Bodies
• Article 2.1
• Members shall ensure that in respect of
  technical regulations, products imported from the
  territory of any Member shall be accorded
  treatment no less favourable than that accorded
  to like products of national origin and to like
  products originating in any other country.
• Article 2.2
• Members shall ensure that technical regulations
  are not prepared, adopted or applied with a view
  to or with the effect of creating unnecessary
  obstacles to international trade.  For this
  purpose, technical regulations shall not be more
  trade-restrictive than necessary to fulfill a
  legitimate objective, taking account of the risks
  non-fulfillment would create.

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Agreement on Agriculture

• Market Access
• Article 4.2
• Members shall not maintain, resort to, or revert
  to any measures of the kind which have been
  required to be converted into ordinary customs
  duties, except as otherwise provided for in
  Article 5 and Annex 5.

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Main Parties Positions

• 01 July 2003, European Parliament ended the
  moratorium on new GMO crop approvals, but
  replaced it with food traceability and labeling
  rules
• Traceability and labeling rules
• "The provisions for traceability ensure a high
  level of environmental and health protection and
  pave the way for a proper labeling system. E.U.
  Environment Commissioner Margot Wallstrom said in
  a statement. Certainly there is a cost for the
  producers and for trade, but what is at stake is
  our ability to build public confidence. The
  requirements also cover highly refined products
  such as corn oil or soybean oil, where the
  original GMO content is removed during the
  production process. These will have to be labeled
  as derived from GMOs although not actually
  containing them.
• Under the moratorium, the EU had effectively
  banned GMO foods since 1998, the US believes this
  is in violation of WTO rules
• US government initiated litigation at the WTO
  regarding EU policy

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Main Parties Positions Contd

• Framework of argument
• US-Trade Issue
• GMOs are a natural progression of the breeding
  of plant and animal species that humans have been
  engaged in for thousands of years
• EU-Public Safety Issue
• Precautionary principle- Scientific research must
  be exhaustive and prove beyond doubt that a food
  product is safe before it can be approved for
  production and sale
• In practice, research can not answer scientific
  questions about products until data has been
  collected for many years. As a result, applying
  precautionary principle can cause the approval of
  products to be delayed for years.

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Main Parties Positions Contd

• US Policy makers perspectives
• GMOs are normal product
• GMOs could potentially
• Promote health through the creation of more
  nutritious foods
• Create new vaccines that combat animal disease
  and increase animal livestock production
• Fight world hunger by creating high-yield crops
• Protect the environment by reducing the need for
  pesticides and fertilizers
• Resistance towards GMOs as an inappropriate trade
  restriction
• George W. Bush
• EU officials are allowing prejudice to obstruct
  the vital humanitarian goal of beating world
  hunger by blocking all new bio-crops because of
  unfounded, unscientific fears

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Main Parties Positions Contd

• United States
• Rejects precautionary principle
• Merely a tactic of protectionism and used to
  compensate for EUS lack of technological
  capability in the field
• Directly violates Sanitary and Phytosanitary
  (SPS) Agreement
• Countries have a right to set special controls on
  food products based on scientific principle
  however, the precautionary principle states a
  product must be proven safe before being approved
  for sale to the public

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Main Parties Positions Contd

• Dispute Continues
• EU demands US exporters keep detailed records of
  origins and movements of GMO foods and clearly
  label them as such
• EU claims this will allow them to track food
  products from the farm to the fork
• EU officials acknowledge that these rules could
  mean aa drop in sales for US producers

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Other Implications

• Not only concerned with access to EU Market but
  other countries as well
• African nations refused US food aid
• US government and corporate leaders were
  convinced at first that Europe was indulging in
  protectionist activity, but came over time to
  understand that the European reaction was mostly
  consumer-driven and derived from citizens'
  suspicion of government's ability to understand
  and regulate scientific discoveries sufficiently
  to protect public health. Still, US food
  corporations were alarmed when in 2002 Zambia
  refused to accept desperately-needed US food aid
  on the grounds that US-made GM products might
  preclude Zambia selling its own produce to
  Europe.

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Sources
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• Raymond J. Ahearan, Foreign Affairs, Defense, and
  Trade Division, US-EU Trade Relations Issues
  and Policy challenges, at p. Crs-10
• USTR, Dispute Settlement Update September 21,
  2007 http//www.ustr.gov/assets/Trade_Agreements/M
  onitoring_Enforcement/Dispute_Settlement/asset_upl
  oad_file243_5697.pdf
• Duncan EJ Currie LL.B. (Hons.) LL.M, Genetic
  Engineering and the WTO an Analysis of the
  Report in the EC-Biotech Case GreenPeace
  .http//www.wto.org/english/forums_e/ngo_e/posp66_
  greenpeace_engi_e.pdf
• National Foreign Trade Council, Inc Looking
  Behind the Curtain The Growth of Trade Barriers
  that Ignore Sound Science http//www.wto.org/engl
  ish/forums_e/ngo_e/posp47_nftc_looking_behind_exsu
  m_e.pdf
• World Trade Organization, Uruguay Round
  Agreement Agreement on the Application of
  Sanitary and Phytosanitary Measures (1995),
  http//www.wto.org/english/docs_e/legal_e/15-sps.p
  df, 70.
• World Trade Organization, Dispute 291 European
  Communities Measures Affecting the Approval and
  Marketing of Biotech Products (2008),
  http//www.wto.org/english/tratop_e/dispu_e/cases_
  e/ds291_e.htm.
• Source World Trade Organization, Uruguay Round
  Agreement Agreement on the Application of
  Sanitary and Phytosanitary Measures (1995),
  http//www.wto.org/english/docs_e/legal_e/15-sps.p
  df, 71-72.
• World Trade Organization, Uruguay Round
  Agreement Agreement on the Application of
  Sanitary and Phytosanitary Measures (1995),
  http//www.wto.org/english/docs_e/legal_e/15-sps.p
  df, 73.
• World Trade Organization, Uruguay Round Agreement
  General Agreement on Tariffs and Trade (1994)
  http//www.wto.org/english/docs_e/legal_e/gatt47_e
  .pdf, 2-6.
• World Trade Organization, Uruguay Round Agreement
  General Agreement on Tariffs and Trade (1994)
  http//www.wto.org/english/docs_e/legal_e/gatt47_e
  .pdf, 16-17.
• World Trade Organization, Uruguay Round
  Agreement Agreement on Technical Barriers to
  Trade (1995), http//www.wto.org/english/docs_e/le
  gal_e/17-tbt.pdf, 118.
• World Trade Organization, Uruguay Round
  Agreement Agreement on Agriculture (1995),
  http//www.wto. org/english/docs_e/leg88al_e/14-ag
  .pdf, 46.

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