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THIRD WORLD NETWORK BIOSAFETY INFORMATION SERVICE

16 May 2003

Dear friends and colleagues,

Re: EU Commission response to US decision to file WTO case on GMOs

(Part One)

On May 13, the US announced that it will file a complaint at the World trade Organisation against the European Union’s authorisation system for GMOs. US Trade Representative Robert Zoellick has been working over the past few months to build a coalition of countries to challenge the EU’s system that is regarded by biosafety proponents as among the best in the developed countries.

The complaint will be filed by the US, Argentina, Canada, and Egypt. Other countries expressing support for this case by joining it as third parties include Australia, Chile, Colombia, El Salvador, Honduras, Mexico, New Zealand, Peru and Uruguay. The US had strongly opposed the Cartagena Protocol on Biosafety from being negotiated at all, and later led Argentina, Australia, Canada, Chile and Uruguay to dilute the Protocol’s provisions.

An immediate response was made by the European Commission in a lengthy press statement, describing the EU’s authorisation system for GMOs. The European Commission maintains that its laws are consistent with the WTO, and answers the allegations of the US. We reproduce for your information the EC press statement in 2 parts. Part One is the main statement and Part Two is the Annex that sets out the various EU laws on GMOs.

For more information on this press release, see

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

For reactions of anger and frustration to the US move, see quotes at:

http://www.euractiv.com/cgi-bin/cgint.exe?targ=1&204&OIDN=1505466&-home=home

For background on the US Complaint, see http://www.ustr.gov/new/biotech.htm

With best wishes,

Chee Yoke Ling and Lim Li Lin

Third World Network

121-S Jalan Utama

10450 Penang

Malaysia

Email: twnet@po.jaring.my

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IP/03/

REF: Doc.TWN/Biosafety/2003/F

Brussels, 13 May 2003

EUROPEAN COMMISSION REGRETS US DECISION TO FILE WTO CASE ON GMOS AS MISGUIDED AND UNNECESSARY

The US announced today their intention to request WTO consultations on the EU’s authorisation system for genetically modified organisms (GMOs). The European Commission regrets this move as legally unwarranted, economically unfounded and politically unhelpful.

EU Trade Commissioner Pascal Lamy said: “The EU’s regulatory system for GMO’s authorisation is in line with WTO rules: it is clear, transparent and non-discriminatory. There is therefore no issue that the WTO needs to examine. The US claim that there is a so-called “moratorium” but the fact is that the EU has authorised GM varieties in the past and is currently processing applications. So what is the real US motive in bringing a case? “

David Byrne, EU Commissioner for Health and Consumer protection stated: “We have been working hard in Europe to complete our regulatory system in line with the latest scientific and international developments. The finalisation process is imminent. This is essential to restore consumer confidence in GMO’s in Europe.” Mr. 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 Wallstrom added: “This US move is unhelpful. It can only make an already difficult debate in Europe more difficult. But in the meantime, the Commission strongly believes that we in Europe should move ahead with completing our legislation on traceability and labelling and on food and feed, currently before the European Parliament. We should not be deflected or distracted from pursuing the right policy for the EU.”

The EU stance on GMOs is in line with WTO rules

The EU wants to address the challenges posed by modern technologies of genetic modification. Its regulatory system provides a reliable framework for GMOs in the EU, meeting demands for human and animal health and the environment in the EU. Under the EU system, the prospective effects of GMOs on human, animal and plant health and the environment have to be scientifically assessed before being approved for marketing. Under the EU system, companies intended to market GMOs in the EU must first submit an application to a Member State including a full environmental risk assessment. 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 Scientific Committee (and the European Food Safety Authority in the future) and takes then a decision. A total of 18 GMOs have already been authorised in the EU.

Reference is often made to a so-called “moratorium” in the EU on approval of new GM varieties. This relates to the fact that since October 1998, no new GMOs have been authorised for release into the environment due to the fact that the EU’s regulatory regime was incomplete to address the challenges posed by modern technology of genetic modification. This new regulatory framework was adopted in March 2001 and entered into force in October 2002.

The entry into force of these improved rules on approval procedures has enabled biotech companies to submit revised applications for approval of their innovative products. Recently two cotton seed oils for food use have been placed on the market in the EU following authorisation. A number of new applications for marketing of GMOs are at an advanced stage of examination and may therefore be granted over the next months in line with EU legislation.

The EU is also finalising the adoption of rules on labelling and traceability, which aim at responding to citizens’ demands for more and better information on GMOs, and the need to facilitate the freedom of choice between new and more traditional agricultural products. Therefore, the EU system is and will be science-based, not driven by economic considerations.

It must be recalled that the US has so far opposed the Cartagena Protocol on Biosafety, which has been signed by over 100 countries and is intended to ensure through agreed international rules that countries, exporters and importers have the necessary information to make informed choices about GMOs.

The case for appropriate approval mechanisms and marketing regulations has been reinforced by the problems experienced in the US. The “Starlink” case is a clear example of the need for appropriate rules for authorisation and traceability of GMOs. In 2000, GM corn not approved for human consumption was found to have entered in large amounts the US food supply chain; More than 300 product brands had to be recalled from supermarkets by US authorities. In a study of February 2002, the American National Academy of Sciences concluded that there are a number of inadequacies in the way GM plants are regulated in the US.

The development argument ignores legitimate concerns of developing countries

A number of developing countries, including a large number African countries suffering a shortage of food have requested main donors of food aid to avoid providing GMO food. The European Commission finds it unacceptable that such legitimate concerns are used by the US against the EU policy on GMOs. The European Commission believes that it is the legitimate right of developing countries’ governments to fix their own level of protection and to take the decision they deem appropriate to prevent unintentional dissemination of GM seeds.

Food aid to starving populations should be about meeting the urgent humanitarian needs of those who are in need. It should not be about trying to advance the case for GM food abroad (while staying away from the international consensus such as the Cartagena Protocol), or planting GM crops for export, or indeed finding outlets for domestic surplus, which is a regrettable of the US food aid policy.

The European Commission policy is to source food aid for emergency situation as much as possible in the region, thus contributing to the development of local markets, providing additional incentives for producers and ensuring that products distributed closely match local consumption habits.

GM crops of interest to developing countries, such a drought tolerant, acid soil tolerant crops are still in laboratories. Commercially available GM crops are largely dominated by herbicide tolerant crops (75%) and insect resistant crops (17%). However, the use of herbicides on small farmers in poor countries is very limited while insecticides are generally used on commercial crops such as cotton but not on staple crops.

Some key figures related to commodities market

The US is by far the main maize producer in the world and exports ~20% of its production. However, emerging countries such as Argentina and China have started to compete with the US maize export.

Production trade flow of maize (1997 - 2001 average) in Million tonnes

Countries       **Production*    Net imports    **Net exports*    Domestic consumption

World                **591

USA                  **241                                                  **47.1*                        189.9

China                **118                                                   ** 5.6*                        116.9

EU                    **37.3                     2.1                                                         * 38.9*

Argentina        ** 16.1                                                 **10.7*                        5.4

Mexico            ** 18.3                     4.9                                                         23.3

(source USDA ERS)

The rejection of GM maize by a growing number of importing countries creates a serious threat to US maize export. In the US, ~35% of the maize is GM maize but only 1-2% of the production is segregated. Therefore, ~98% of the US maize may contain GM maize varieties, many of which have not been approved in other countries. Since the US refuses to implement measures to segregate and control the spread of different GM maize varieties, its exports are affected.

Main source of maize main import in the EU 1995-2002 (in tonnes)

Origin       **Argentina*              * US*

1995       **528 028*           * 3 325 082*

1996       **584 453*            2 045 317

1997       **918 790*           * 1 708 445*

1998       **1 433 829*        * 237 567*

1999       **2 031 431*         *  30 359*

2000       **2 238 814*         * 52 635*

2001       **1 357 138*         * 32 018*

2002       **1 347 595*          * 25 934*

Since 1997, imports of US maize in the EU have largely been replaced with Argentine maize, as some GM maize varieties cultivated in the US are not authorised for cultivation or in the EU. On the other hand, Argentine GM maize producers grow and export approved GM maize varieties and now have a competitive advantage against US producers.

Origin of soybean import in the EU 1995-2002 (tonnes)

Origin       **USA*               Argentina                    ** Brazil*

1995   **9 811 570*     * 2 081 522 *                 **3 073 057*

1996   **8 571 884*     1 288 060                   **3 121 094*

1997   **7 843 877*      350 494                     **4 637 269*

1998   **6 691 269*     1 064 751                   **5 439 613*

1999   **6 471 928*      960 502                     **6 105 756*

2000   **6 908 250*      381 482                     **6 372 400*

2001  ** 6 474 057*      670 486                     **9 729 136*

2002   **5 518 096*      1 163 840                  **8 933 295*

In the US, soybean grower cultivates only the GM soybean authorised in the EU. Therefore, they do not have problems of access to the EU market. The decrease of the share of US soybeans reflects, therefore, a lost of competitiveness of US soybean on the international markets.

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 panelists 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.

Time table (with the shortest possible deadlines taken into consideration)

Filing of request by US Mid May

Consultation 60 days Mid July

Request for establishment of Panels immediate

Establishment of Panel +/-45 days End August

Appointment of Panelists 20 days End September

US 1st written submission 3 weeks Mid October

EC first written submission 2 weeks Early November

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

END of PART ONE

 


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