Put Down the Genetically Modified Tomatoes -- It's no time to pick a trade fight over biotech foods.

                                                                                    Dr. Stuart S. Malawer

 

                                               Legal Times  (09-01-2003)


Food fights are in poor taste among fraternity brothers or infant siblings. Among trading nations, they make even less sense. Before an unnecessary dispute over genetically modified foods spirals out of control, the United States should drop a World Trade Organization action recently initiated against the European Union.

Instead, the United States should negotiate its trade concerns in a diplomatic setting. Friendly transatlantic relations are more important now than ever before. Besides, the United States will probably lose this case.

The point of contention is this: Since 1998, the EU has observed a de facto moratorium on approvals to import biotech products — basically, agricultural and foodstuffs. In addition, the United States contends, several individual European states have banned the marketing and importation of biotech products (though some products have been approved).

In May, the United States filed a formal complaint with the WTO over the EU moratorium. A 60-day consultation period followed. In August, with no resolution in sight, the United States asked the WTO to establish a dispute settlement panel.

SAFETY STANDARDS

The United States argues that three EU actions violate WTO law: the suspension of consideration of applications and granting of approvals for biotech imports; the failure to consider specific enumerated products; and the individual national bans on marketing and importation of biotech products.

The United States relies on the Sanitary and Phytosanitary Agreement, one of the Uruguay Round of Multilateral Agreements. Article 2 provides that WTO members can take measures to protect human life or health, provided they have a basis in scientific principles and do not arbitrarily discriminate between members. Article 3 requires such measures to be based upon international standards, where those standards exist. It specifically cites the Codex Alimentarius Commission as an international organization responsible for developing acceptable standards. Article 5(1) requires a risk assessment that takes into account techniques developed by relevant international organizations. Article 5(7) provides that when the scientific evidence is insufficient, members may apply restrictive measures provisionally.

The United States also argues that the EU moratorium is inconsistent with the Uruguay Round's Technical Barriers to Trade Agreement, which mainly concerns product labeling. Article 2(2) requires that technical regulations not create unnecessary obstacles to trade. Article 2(4) provides that states base such regulations on relevant international standards.

This legal structure governing the international food trade came into existence in 1995 along with the WTO. What makes it unusual is that international standards developed outside the WTO framework are explicitly incorporated into the WTO system to determine the legality of members' actions. Before the explosion of biotech research over the last decade — and before consumers and governments worldwide became apprehensive about genetically modified foods — there was little understanding of how these standards might affect international trade.

The incorporation of the Codex Commission into the Sanitary and Phytosanitary Agreement thrust an obscure body into the center of global trade disputes. The Rome-based commission was created in 1963 by two specialized United Nations agencies, the Food and Agricultural Organization and the World Health Organization. Before 1995, its standards were mainly voluntary food safety measures that states might take into account.

Now the Codex standards have become benchmarks against which national trade measures concerning food imports and labeling are assessed for compliance with WTO obligations. A national law unsupported by these standards may be deemed an illegal trade barrier.

Thus, the U.S. case against the EU depends primarily on whether regulations adopted by the EU are consistent with standards promulgated by the Codex Commission. Can the United States persuade a WTO panel that the EU's risk assessments did not conform with Codex standards and, thus, that there is no scientific evidence to support the measures of the EU or its member states — and that where the EU relies on the precautionary principle, there was scientific evidence that it overlooked?

A WEAKER CASE

Codex Commission actions since May have produced serious problems for the U.S. case. Recent actions by the European Parliament raise additional questions. The EU's July suit against 11 member states in the European Court of Justice makes significant complications for the U.S. proceedings in the WTO. Perhaps more importantly, issues of foreign policy and national security — namely, the U.S. desire to rebuild transatlantic ties in light of the war on terrorism and peace efforts in the Middle East and Iraq — call into question the wisdom of continuing this fight.

The United States argues that it simply wants the EU to apply a scientific, rules-based process to the review and approval of genetically modified food imports developed through agricultural biotechnology. The EU contends that a new regulatory framework that entered into force in 2002 does just that.

This summer, the European Parliament also approved legislation setting strict labeling and tracing requirements for food or feed made with genetically altered organisms. These laws are expected to receive final EU approval in the fall, prior to any WTO panel decision. They would permit genetically modified foods to be imported if they comply with the new requirements — which would, very likely, render the U.S. action moot.

Further clouding matters is the Codex Commission's recent adoption of the first international guidelines for risk assessment studies of genetically modified foods. The guidelines require safety evaluations before food products are placed on the market. They also require that food products be traceable back to their origins. The U.S. Food and Drug Administration, by contrast, does not require a premarket safety assessment or an assessment of unintended consequences due to gene modification.

All these emerging standards appear to support stronger, not weaker, regulation of genetically modified foods. Thus, the EU's position seems more justifiable today than yesterday: It is relying on scientific evidence or, where there is not enough, it is taking precautions while seeking more information.

In July, the EU brought suit in the European Court of Justice against 11 member states contending that they (and implicitly not the EU) are maintaining illegal moratoriums against biotech foods. Although international law imposes liability on a country when a political subdivision violates an international obligation, this rule does not apply to the EU. It is merely a regional grouping, not liable for its members' actions. Thus the Court of Justice filing foreshadows a strong defense in any WTO action concerning EU responsibility for its members' biotech moratoriums.

ABUSE OF PROCESS

Add up the evidence, and it seems that the U.S. case is more about politics than science. It responds to the special pleas of agricultural firms, and it has been brought in anger (and as part of a defensive legal strategy) over recent U.S. losses in the WTO on other trade issues — anti-dumping duties, export tax subsidies, and steel tariffs. It evidences a growing U.S. tendency to rely upon power politics and unilateral intimidation at the expense of diplomatic and multilateral efforts.

But this approach is shortsighted. If there is anything truly multilateral in the world, it is trade relations. The United States was the primary architect of the WTO's dispute resolution system and is a most aggressive user today. Within the last few weeks alone, the United States has prevailed in actions brought by India (rules of origin and textile imports), by Japan (sunset review of anti-dumping duties), and against Japan (testing of agricultural imports). It is in the U.S. national interest not to abuse this system.

Litigation, especially in a losing case designed to appease unwarranted congressional angst, is not good public policy. While U.S. agricultural firms may have real grievances, they should not be settled by a WTO suit — at least not now. Negotiating labeling requirements with the EU makes a lot more sense: Agree to disclose the information, and let the buyer and market decide.

The United States must beware that litigation is never viewed as a friendly act. And these days the United States needs friends to face much graver problems of terrorism and peace. We need to make the world a safer place not for genetically modified organisms, but for all of us. In short, drop this food fight now and get on with building a safer international community.

Stuart S. Malawer is the Distinguished Service Professor of Law & International Trade at George Mason University's School of Public Policy. He can be reached at stuartmalawer@msn.com.