WTO Cases • Volume 12 • Number 2 • 23rd January 2008

WTO biotech ruling: eu misses compliance deadline

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The EU has missed a 11 January deadline to comply with a WTO ruling against its practices for the approval and marketing of biotech products.

The US, Canada and Argentina, the victors in the case, have temporarily suspended their right to impose retaliatory trade sanctions against EU exports in an effort to give EU countries more time to demonstrate "meaningful progress on the approval of biotech products" in order to "normalize trade" in such commodities.

For the EU, however, achieving compliance will remain a challenge due to national policies in different member states. Austria, for example, has a ban on genetically modified food products. And France on 11 January further aroused the US’ ire by banning imports of genetically modified maize - a genetically modified food product grown in France. Washington expressed particular disappointment with France’s announcement because the crop has long been produced in both the US and the EU.

The US was not alone in criticising EU member states’ moves to restrict the importation of genetically modified agricultural and food products. EU Trade Commissioner Peter Mandelson has argued that EU member states should approve genetically imports when "science is on their side," arguing that with the EU’s rigorous biotech approval system already in place, health and safety priorities can be maintained. He also argued that because genetically modified foods will continue to play an important role in agricultural productivity, "it [would be] an economic risk for Europe to fall behind the global economy in approving safe biotechnology."

Piet Bukman, chair of the International Food and Agricultural Trade Policy Council (IPC) and former Dutch minister of agriculture, trade and development stated, "Europe really needs to consider the broader implications of its position," suggesting that member states ignoring the EU-wide biotech approval regime may cause the regime to lose its credibility, and complicate effective EU decision-making on the issue. Bukman also argued that slower authorisations for biotech food and animal feed products will lead to increased prices for EU member states.

Background

The case dates back to 2003, when the US, Canada and Argentina initiated WTO dispute proceedings with the EU in regard to its policies on genetically modified agricultural and food imports. They alleged that the EU applied a moratorium on the approval of biotech products, which restricted agricultural imports. It was also alleged that member states imposed bans on the marketing and imports of biotech products already approved at the EU level (see BRIDGES Trade BioRes, 6 October 2006). The US, Canada and Argentina claimed that these measures were inconsistent with provisions of the Agreement on Sanitary and Phytosanitary (SPS) Measures, GATT 1994, the Agreement on Agriculture, and the Agreement on Technical Barriers to Trade (TBT).

A dispute panel was convened after initial consultations failed to resolve the dispute. In 2006, the panel ruled in favour of the complainants, finding individual EU member state bans on the "marketing and import of EU-approved biotech products" to be inconsistent with Annex C and Article 8 of the SPS Agreement also because of "undue delays in the completion of the approval procedures" and with Articles 5.1 and 2.2 of the SPS Agreement because the "measures were not based on risk assessments satisfying the definition of the SPS Agreement." It found that the EU’s policy amounted to an undue "de facto moratorium on approvals of biotech products."

The European Commission decided not to appeal this ruling. Some have speculated that the Commission did not want to expose itself to a less favorable ruling on appeal, or that the ruling "would be helpful in its efforts to persuade some of the EU member states to lift their GM bans." This decision drew criticism from various groups concerned with the implications of the ruling for future environmental disputes, stressing the WTO panel’s non-use of the UN’s Biosafety Protocol, an agreement that allows nations to use the precautionary approach to ban GM products. The EU is a signatory to that treaty, but none of the complainants were. Groups such as Greenpeace said that the ruling highlighted the need for a different forum to deal with environmental trade disputes.

In November 2006, the EU was given twelve months to comply with the report (see BRIDGES Trade BioRes, 6 July 2007). This deadline was later modified and extended to 11 January 2008.

ICTSD reporting; "US holds fire on sanctions against EU in biotech food dispute," AGENCE FRANCE PRESSE, 15 January 2008; "IPC urges Europe to look at broader implications of biotech stance," IPC News Release, 14 January 2008; "US Holds Fire on EU GM Ban," BBC NEWS, 14 January 2008; "World Trade Panel Sides with Biotech Food Producing Countries," ENVIRONMENT NEWS SERVICE, 9 February 2006; "U.S. to Evaluate EU Progress on Biotech Approvals, Temporarily Suspends WTO Sanctions Process," US MISSION TO THE EUROPEAN UNION, 14 January 2008; "Biotechnology and the EU," SPEECH BY PETER MANDELSON, AT THE EUROPEAN BIOTECHNOLOGY INFO DAY, 14 June 2007; "EU Accepts Trade Ruling on GMOs," EURACTIV.COM, 22 November 2006; "WTO Dispute," GENEWATCHUK.COM.