Bridges Trade BioRes • Volume 2 • Number 6 • 4th April 2002

Biotech Labelling Contentious at the WTO and ICCP

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Biotech labelling contentious at the WTO and ICCP

Delegates at the third meeting of the Intergovernmental Committee on the Cartagena Protocol on Biosafety (ICCP-3) on 22-26 April in The Hague, The Netherlands, will further elaborate rules for ensuring biosafety when trading living modified organisms (LMOs), including possible modalities for standards with regard to labelling shipments of LMOs for food, feed and processing (LMO-FFPs). These discussions come at a time when China’s and the EU’s national biotechnology regulations on labelling, traceability and import requirements for LMOs are increasingly coming under attack at the World Trade Organization (WTO).

Labelling of LMO shipments on the agenda of ICCP-3

ICCP-3 will continue discussions on the contentious issues of liability and compliance, which had been postponed from ICCP-2 for further discussion at the first Meeting of the Parties (MOP-1) which will be held once the Protocol has been ratified by 50 Parties and thereby enters into force. MOP-1 had originally been scheduled to take place in April 2002, but only 14 Parties have so far ratified or acceded to the Protocol. Of particular interest in the trade context will be discussions on handling, transport, packaging and identification practices for which Parties are required to consider the need for and modalities of developing standards (Article 18). Under this agenda item, ICCP-2 saw similar debates over labelling of shipments of LMO-FFPs as had taken place in the negotiations of the Protocol, with some supporting the general system of identifying shipments that “may contain” LMO-FFPs as currently stated in the Protocol, while others — in particular countries representing centres of origin and diversity — favoured a more specialised system involving “unique identification” of genetic material contained in LMO-FFPs.

EU labelling and traceability rules not workable, says US

Argentina, Canada, Australia, the US and others (including Israel, Jordan, Singapore and Egypt) expressed concern regarding the draft EU labelling and traceability requirements for genetically modified (GM) foods — proposed by the European Commission and currently under discussion in the European Council (see BRIDGES Weekly, 31 July 2001) — at both the WTO Committees on Technical Barriers to Trade (TBT) on 15 March and the WTO Committee for Sanitary and Phytosanitary Measures (SPS) on 19-21 March. The proposed EU regulations would require all GM foods to be labelled, including foods derived from but no longer containing GMOs, such as highly refined products (e.g. maize or soy oil) where the original GMO content is removed during the production process. The labelling threshold for accidental presence of GMOs would be set at 1 percent.

The US reiterated its position that the proposed rules were not workable, not enforceable, costly and more trade-restrictive than necessary (and therefore not compatible with WTO rules; see also BRIDGES Trade BioRes, 24 January 2002). They also pointed out that the aim of the proposed rules appeared to be confused, mixing up the protection of the environment, the protection of health, and consumer protection against deception. In addition, the US questioned the need for tracing and labelling GM foods produced from what they referred to as “biotechnology events”, but not containing traces of GM ingredients (eg oil made with GM soy). The latter point was also picked up by Canada which said that the proposed regulations could be discriminatory as they would only apply to foods derived ‘from’ GMOs (eg GM soy oil), but not to foods made ‘with’ GMOs (eg certain wines and cheeses made with GM enzymes).

The EC stressed that the proposed rules aimed to ensure consumer safety and social acceptance of GM foods, to allow consumers to make an informed choice, and to monitor potential environmental effects. Also, the EC argued that labelling and traceability were not restricted to GM foods, but were required for all food products (as set out in new EU food safety law, see BRIDGES Trade BioRes, 7 March 2002), and that the proposed rules simply specified in more detail the labels required for GM products. Norway supported the EC’s proposed rules, arguing that they followed the Codex Alimentarius Commission (see BRIDGES Trade BioRes, 21 March 2002), the Biosafety Protocol and OECD guidelines.

China’s GM regulations criticised for lack of transparency

At the meeting of the TBT and SPS Committees, Argentina, Canada and the US also addressed China’s recent biotechnology regulations, which require importers of agricultural biotechnology products to apply for official safety verification approval from China’s Ministry of Agriculture, a process that could take up to 270 days complete. The regulations where originally scheduled to enter into force on 20 March, but have been temporarily waived mainly in response to US concerns. Instead, preliminary safety approvals will be issued to foreign firms during a transition period of nine months (20 March - 20 December 2002). While welcoming the interim arrangement, Canada and the US used the Chinese regulations as an example for the importance of transparency and notification. In particular, they argued that the Chinese rules, whose details were announced on 7 January, did not leave a reasonable time for compliance, and that China had not developed the regulations in a transparent way. In response, China contested that the new regulations had been developed prior to its WTO accession when China had not been under transparency obligations.

Labelling in the Biosafety Protocol and at the WTO

The Cartagena Protocol on Biosafety — also sometimes referred to as a ‘Biotrade’ Protocol as it mainly focuses on the transboundary movement of LMOs — regulates the safe transfer, use and handling of LMOs that may have adverse effects on biodiversity, taking into account risks to human health. The Protocol deals with two types of LMOs. First, LMOs for “intentional introduction into the environment of the Party of import” (eg seeds intended for planting) are subject to an Advanced Informed Agreement (AIA) procedure, which requires the importing country to give its consent prior to the first intentional transboundary movement of the LMO. The AIA procedure does not apply to the second category of LMOs, ie those “intended for direct use as food or feed, or for processing” (eg soybeans for use in food). Instead, exporting countries are required to send information on any new LMO to the Biosafety Clearing House (BCH) where it can be accessed by potential importers who then decide on the import under their domestic policy. Shipments of these LMOs have to be labelled as “may contain” LMOs and as not intended for intentional introduction into the environment

At the WTO, labelling requirements for GMOs are covered by the TBT Agreement, which recognises that countries have the right to establish protection, at levels they consider appropriate, for example for human, animal or plant life or health or the environment. In addition, the SPS Agreement covers packaging and labelling requirements directly related to food safety. The Agreement allows WTO Members “in cases where relevant scientific evidence is insufficient” to provisionally adopt measures under SPS regulations. In such cases, Members are instructed to seek to obtain additional information necessary for a more objective risk assessment “within a reasonable period of time”. Both Agreements stipulate that any measures should not be more trade-restrictive than necessary. Some argue that labelling requirements for GMOs are unnecessarily trade-restrictive (and therefore not admissible under WTO rules) due to the high cost of segregating GMOs from non-modified products. Others also believe that there is not enough evidence of threats of GMOs to human health and the environment to justify labelling requirements.

The Biosafety Protocol’s relationship to the WTO remains unresolved. The Preamble includes a so-called “savings clause” stating that the Protocol does not change the rights and obligations of a Party under any existing international agreements, but also says that this clause is not intended to subordinate the Protocol to other international agreements. Thus, it is unclear which agreement would prevail should a conflict between their provisions arise. The relationship between WTO rules and multilateral environmental agreements (MEAs) is currently being discussed in the Committee on Trade and Environment as part of the new round of trade negotiations launched at the WTO Ministerial Conference in November 2001 (see related story, this issue).

Additional Resources

Documents of ICCP-3 are available at http://www.biodiv.org/doc/meeting.asp?wg=ICCP-03. Daily coverage will be provided by IISD Linkages. For daily coverage and an analysis of ICCP-2, see http://www.iisd.ca/biodiv/iccp2/.

ENB, Vol. 09, No. 203, 8 October 2001; “China drags feet on GMO certificates, markets fret,” REUTERS, 21 March 2002; ICTSD Internal Files.