WTO GMO RULING FAVORS CANADA, UNITED STATES & ARGENTINA

(September 29, 2006) The Final WTO-GMO Report of the World Trade Organization Panel in EC – Measures Affecting the Approval and Marketing of Biotech Products was issued to all members of the WTO and made public today. The WTO GMO ruling Final Report differed from the Interim Report on three significant points:

• First, the Panel determined that it could not rule whether the EU had abandoned its “de facto” moratorium on approvals of GMOs after August 2003. The Panel therefore withdrew the finding that it had made in its interim ruling in February, which stated that the EU’s original “de facto” moratorium had ceased to exist with the approval of the import and sale of Bt11 in 2004.
• Second, in light of this first change, the Panel ruled that the EU must bring its practices into compliance with WTO rules if and to the extent that a moratorium still exists.
• Third, the Panel removed a discussion of a hypothetical labeling measure, which was not relevant to the issues before the Panel in this dispute.

A joint statement by U.S. Trade Representative Susan Schwab and U.S. Agriculture Secretary Mike Johanns noted:

“Although the EU approved a handful of biotech applications following the initiation of the case in 2003, the EU has yet to lift the moratorium in its entirety. Some biotech product applications have been pending for 10 years or more, and applications for many commercially important products continue to face unjustified, politically-motivated delays.”

Trade Representative Schwab specifically added:

"I urge the EU to fully comply with its WTO obligations, and consider all outstanding biotech product applications, and evaluate their scientific merits in accordance with the EU’s own laws, without undue delay.”

The full US Statement can be found at: http://www.ustr.gov/Document_Library/Press_Releases/2006/September/US_Trade_Representative_Susan_Schwab_US_Agriculture_Secretary_Mike_Johanns_Announce_Favorable_Ruling_in_WTO_Case_on_Agri.html

A Summary of the Findings

The following summarizes the Final Report of the WTO Panel in the GMO approvals dispute that was circulated in Geneva today. It had been issued to the three complaining parties – Canada, Argentina and the United States -- and the European Union in May, but the official circulation of the Final Report was delayed until Spanish and French versions of the Report were available. The Panel’s conclusions are subject to appeal. They become binding on the parties only after an appeal (if either side chooses to initiate one) and then upon adoption by the full WTO membership.

• The Panel found that the Member State measures are not justified by the precautionary principle, which under WTO rules permits Members to impose measures so long as relevant scientific evidence is insufficient. “The Complainants have established . . . that [the] safeguard measure[s were] imposed in respect of a situation where relevant scientific evidence [about the safety of GMO products] was not insufficient.” As the EU's own scientific committees reviewed and gave the green light for these applications, there is nothing “insufficient” about the scientific evidence.
• The Final Report of the WTO Panel in the GMO approvals case demonstrates that international trade rules fully support trade in products of biotechnology for planting, processing and marketing subject to science-based regulation.
• In particular, the Panel unequivocally showed that an informal, de facto ban on approvals imposed by the European Union, or any other WTO Member, would not escape scrutiny under WTO rules.
• Significantly, the Panel found that the Convention on Biological Diversity and the Biosafety Protocol are “not relevant” to the interpretation of the WTO agreements at issue in the case, and therefore did not find it necessary or appropriate to rely on those provisions, which were cited by the EU in its defense.

Other key findings include:

• The Panel’s findings make clear that a politically-motivated ban on GMO approvals, whether in the EU or elsewhere, cannot be maintained consistent with WTO obligations.
• Current WTO rules, principally the SPS Agreement, cover restrictions on trade in biotech products, including pre-marketing approval regulatory regimes like that maintained by the EU.
  • This critical point was clearly stated, as some have argued in the past that biotech products are not “covered” by the WTO agreements, and that new rules would need to be negotiated to address them.
  • The EU maintained since 1998 a general ban on approvals of new biotech products, and that ban violated the SPS Agreement.
  • The Panel also looked at the application of the EU’s ban to specific products in the regulatory pipeline during the period reviewed by the panel, and found evidence in 24 cases that these product-specific bans also violated the EU’s obligations under the SPS Agreement.
• The Panel also found that the nine Member State marketing and import bans on products already approved for sale in the EU violated the EU’s obligations under the SPS Agreement.

REFERENCES

The Panel has found that the EU procedures for the approval of GMOs set out in Directives 90/220 and 2001/18 are SPS measures covered by the SPS Agreement. Regulation 258/97 is also, in part, an SPS measure. (Paragraph 8.4)

General Moratorium (Paragraphs 8.13-8.16, 8.33-8.36, 8.49-8.51)

The Panel found that the EU applied a general de facto moratorium on approvals of biotech products between June 1999 and August 2003, when the Panel was established. (Paragraph 8.6)

With respect to Directives 90/220 and 2001/18, the Panel concluded that the general de facto moratorium resulted in a failure to complete individual approval procedures without undue delay, and therefore violated the EU’s obligations under Article 8 and Annex C of the SPS Agreement. The Panel reached the same conclusion with respect to Regulation 258/97 to the extent the approval procedure addressed safety aspects. (Paragraph 8.6)

The Panel recommended that the EU bring itself into compliance with its obligations, if and to the extent it continues to maintain a general moratorium. (Paragraph 8.16)

Product-Specific Measures (Paragraphs 8.17-8.20, 8.37-8.40, 8.52-8.55)

In addition to the general moratorium, the Panel found that the EU failed to consider for final approval applications concerning 24 of 27 biotech products identified by the Complaining Parties for which the EU had commenced approval procedures, thus violating the EU’s obligations under Article 8 and Annex C of the SPS Agreement regarding undue delay. (Paragraph 8.7) To the extent that these applications are still pending, the Panel recommended that the EU bring itself into compliance with its obligations. (Paragraph 8.32)

Member State Marketing and Import Bans (Paragraphs 8.21-8.32, 8.41-8.48, 8.56-8.64)

The Panel found that the nine marketing and import bans imposed by six Member States on GMOs already approved by the European Commission were covered by the SPS Agreement, violated the Member States’ obligations under Article 5.1 (not based on a risk assessment) and not justified by the precautionary principle embodied in Article 5.7 of the SPS Agreement because the Panel found sufficient scientific evidence was available to permit a risk assessment. (Para 8.9) Accordingly, the Panel found that the nine Member State measures are inconsistent with Article 2.2 of the SPS Agreement. (Paragraph 8.10). The Panel recommended that the EU bring the Member State measures into compliance with its WTO obligations. (Paragraphs 8.32, 8.48, 8.64)