August 18, 2003

Argentina, Canada and the U.S. have requested today the establishment of a WTO Panel on the
EU´s approach to genetically modified organisms (GMOs).

EU Trade Commissioner Pascal Lamy said: "We have been in what we found a rather constructive dialogue with Argentina, Canada and the U.S. on this issue. We regret this move to an unnecessary litigation. The EU's regulatory system for GMOs is clear, transparent, reasonable and non-discriminatory. We are confident that the WTO will confirm that the EU fully respects its obligations."

David Byrne, EU Commissioner for Health and Consumer Protection stated: "Only a month ago we updated our regulatory system on GMOs in line with the latest scientific and international developments. Clear labelling and traceability rules are essential to help restore consumer confidence in GMO's in Europe.” David Byrne recalled that it is the lack of consumer demand for GM-products that accounts for the low sales of GMOs in the EU market. “Unless consumers see that the authorisation process is up to date and takes into account all legitimate concerns, consumers will continue to remain sceptical of GM products."

EU Commissioner for the Environment Margot Wallström added: "There should be no doubt that it is not our intention to create trade barriers. But my concern is that this request will muddy the waters of the debate in Europe. We have to create confidence among citizens for GMOs and allow them to choose - and this is what our new legislative framework is designed to do. The EU stance on GMOs is in line with WTO rules."

The European Union has a clear and transparent framework (Directive 2001/18/EC, repealing Directive 90/220/EC, and Regulation 258/97) to approve and market GMOs and GM-foods in Europe. This involves an independent scientific assessment in respect of impact on human, animal and plant health and the environment before being approved for marketing. Companies intending to market GMOs or foods derived from GMOs in the EU must first submit an application to a Member State including a full environmental risk assessment in the case of GMOs or a safety assessment in the case of GM foods. 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 relevant Scientific Committee (the European Food Safety Authority in the future) and takes then a decision. A total of 18 GMOs(1) and a total of 15 GM foods(2) are marketed in the EU.

Canada and the U.S. on May 13 and Argentina on May 14 this year requested WTO consultations on the EU´s authorisation system for GMOs and GM foods. They were notably alleging that the EU had suspended the consideration of the applications and approval and was maintaining a de-facto “moratorium” on new GM varieties. This relates to the fact that since October 1998, no new GMOs had been authorised for release into the environment under Directive 90/220/EC as the EU's regulatory regime was being updated to better address the challenges posed by modern biotechnology. The new regulatory framework was adopted in March 2001 and entered into force in October 2002.

A better labelling and traceability framework for GM-food and GM-feed was also adopted in July 2003. It aims to respond to citizens' demands for more and better information on GMOs, and the need to facilitate the freedom of choice between new and more traditional agri-food products. Therefore, the EU system is and will continue to be driven by the concern to ensure a high level of human health protection and appropriate protection for the environment.

A number of new applications for marketing of GMOs are at an advanced stage of examination and may therefore be granted over the coming months in line with EU legislation.
Development of consultations

The EU held the requested consultations with the U.S. and Argentina on 19 June 2003 and with Canada on 25 June 2003. Consultations are the first step in a WTO dispute settlement. They open a dialogue process between the disputing parties and aim at finding a positive solution to the issue at stake. In this spirit, the EU offered to continue the process and used the opportunity to provide further details on the regulatory framework and the situation of all pending applications so that any misunderstanding could be dispelled. To the EU's dismay, upon conclusion of the consultations, the U.S. immediately announced that the consultations had failed and that they would request a Panel in the very short run. Further exchanges of information took place with Canada and Argentina and it was the EU understanding that these two countries were interested in pursuing the consultations.

The EU remains convinced that an open dialogue in a constructive spirit would lead to a positive solution and therefore regrets the move to requesting a Panel.

The EU (like any WTO Member) has a legitimate right to ensure that GMOs are only put on the market on the basis of a careful assessment of risks and proper information to consumers. Several WTO agreements such as the GATT 1994, the Agreement on Sanitary and Phytosanitary Measures (SPS) and the Agreement on Technical Barriers to Trade (TBT), and agreed standards such as the recently adopted Codex Alimentarius Principles for the Risk Analysis of Foods Derived from Biotechnology all recognise the right for WTO members to take the measures at the level they consider appropriate to protect human or animal health or the environment. Furthermore, the Cartagena Biosafety Protocol to the Convention on Biological Diversity recognises the specificity of trade in biotechnology and thus the right to treat GMOs in a cautious way.

Many countries around the world have adopted a case by case authorisation process for GMOs and GM-foods; some are even maintaining moratoria on growing GM-crops.

The allegation that the EU is hindering the great cause of ending hunger in Africa is not founded. A large number of countries suffering a shortage of food have requested main donors of food aid to avoid GM food. As all countries, they have the legitimate right to decide which level of protection they need to prevent unintentional dissemination of GM seeds.

The EU policy in food emergency situation is to source food aid to the greatest extent possible in the region to contribute to the development of local markets and match the local consumption habits. Food aid should be about meeting the urgent humanitarian needs, not about promoting economic interests.

In the US itself, in a study of February 2002, the American National Academy of Sciences also concluded that there are a number of inadequacies in the U.S. regulation of GM plants.

Americans, by a huge margin, want genetically engineered foods to be labelled. According to a July 2003 ABC News telephone poll of 1,024 adults, in fact, a whopping 92 percent of Americans support labelling.

The EU authorisation system is clear, transparent, non-discriminatory and has already proven that it provides access to the EU market. Many countries are looking at the EU regulatory framework to develop their own policy.

Background

WTO consultation and dispute settlement procedures

The first step in a WTO dispute settlement is a request for consultation from the complaining member. The defendant has 10 days to reply to the request and shall enter into consultation within a period of no more than 30 days (unless otherwise agreed by the 2 parties). The consultation should aim at finding a positive solution to the issue at stake. If the consultations fail to settle the dispute within 60 days after the date of receipt of the consultation request, the complaining party may request the Dispute Settlement Body (DSB) to establish of a Panel (however, the complaining party may request a panel during the 60 day period if the 2 parties considers that the consultations have failed to settle the dispute).

Once the panellist are nominated, the complaining party has normally between 3 and 6 weeks to file its first written submission and the party complained against another 2/3 weeks to respond. Two oral hearings and a second written submission follow. On average a panel procedure lasts 12 months. This can be followed by an appeal that should not last longer than 90 days. In a case such as the one at stake here, the necessity of hearing scientific experts may prolong the timetable.

For more information go to:
http://trade-info.cec.eu.int/europa/index_en.php 
http://europa.eu.int/comm/food/fs/gmo/gmo_index_en.html 
http://europa.eu.int/comm/environment/biotechnology/index_en.htm 

(1)Authorised under Directive 90/220/EC
(2)Approved under Regulation 258/97 for placing on the market