WTO Rules on Transatlantic Food Fight
February 8, 2006
On one side of the controversy is the EU, which has a long aversion to genetically modified organisms (GMOs) and strict policies governing imports. On the other is the US, Canada and Argentina, who say such policies equal unfair trade barriers and are not backed up scientifically.
So it was up to the World Trade Organization (WTO) to decide. And decide they did.
In a landmark case with sweeping repercussions, the WTO on Tuesday issued a preliminary decision on the issue, ruling that the EU -- and Germany, France, Austria, Luxembourg, Italy and Greece -- essentially imposed a moratorium on GMOs for six years beginning in 1998. Such actions are forbidden under WTO rules.
The long-awaited ruling, which was delivered confidentially to the parties involved and revealed by US and WTO officials privately, is expected to take days to analyze -- it is a complicated document consisting of a 1,000 pages that detail the trade histories of certain crops. A final document is expected by the end of the year.
Most observers had expected that the WTO ruling would favor dismantling the EU's strict policies and force the EU to accept more GMOs.
The EU "has tied up most of these products without a scientific basis in a politically-motivated moratorium," said a US trade official, who asked not to be named. "We think we have a strong case."
A distaste for GMOs
GMOs have been widely used by more than 8 million farmers around the world for more than a decade, with more than half the crops being grown in the US, according to the Office of the US Trade Representative in Washington. These include soy and corn that have been modified to better resist pests, survive drought or have a higher vitamin and mineral content.
Proponents of GMOs say the fear among consumers is unfounded, since other countries, namely the US, have been growing and eating these crops for years -- most processed foods in the US contain a GMO.
Europeans have always been far more distrustful of GMOs than their counterparts abroad calling them "franken foods." So despite an official EU policy allowing the imports, individual EU governments put restrictions on imported crops, such as corn, that have been genetically modified since 1998, when it approved its last batch of GMOs.
Subsequently, France and Germany led calls for a de facto moratorium on new GM food approval and won the backing of several other EU states. They formed a minority block that has been able to block any vote on a new approval.
As a result, the US, Canada and Argentina filed a complaint with the WTO in 2003 accusing the EU of blocking approvals of new biotech varieties. They said that violated trade treaties that mandated a quick approval process based on science. As a result, the food industry was losing hundreds of millions in sales annually.
EU officials deny any moratorium. They said that examining new products for safety takes time and that approval laws are fair. And they point to the approval of sweet corn and other products since 2004 as proof that the process is working.
"The claim that there is a moratorium on approval of GM products in Europe is not true," said one EU trade official on the condition of anonymity before the ruling was released. "We expect the ruling will note that."
Instead, the EU considers that major GMO producers such as the US should "adopt a co-operative approach to the development of a sound international legal framework for these products, instead of taking hostile steps at the WTO," according to an internal EU trade commission memo.
The EU's loss won't have a huge impact on sales, because demand for GMO products is still so low in Europe that farmers and retailers are reluctant to gamble on offering them. Opponents say that the ruling will even increase the aversion.
"Opposition to genetically modified foods is likely to increase if the WTO decides that European safeguards should be sacrificed to benefit biotech corporations," Adrian Bebb, GMO campaigner for Friends of the Earth Europe, said in a statement prior to the ruling. "The WTO, the US administration and biotech firms should stop their bullying and let Europeans decide what food we eat."
Still, ruling in favor of the US-led complaint sends a signal for other countries to not take similar action.
Meanwhile, EU could now ask for more time to comply or appeal the decision -- or ignore it. Then compensatory fines and arbitration are likely.
"We hope it doesn't go that far," the US trade official said.