From gaia@gaianet.org

Dear Friends and Colleagues,

It has always been suspected that the US complaint to the WTO about the EU's moratorium on GMOs was really intended to send a warning to developing countries not to try to reject GMOs themselves.

In February this year, reports emerged that the World Trade Organisation (WTO) had found in favour of the US.  The report is still not due to be published for several weeks, but the decision was confirmed last week.  This news was used by the US to suggest that GM food products were safe, and to discourage other countries from attempting to impose the similar restrictions.  

However, a closer look at the actual report, which was leaked to NGOs, reveals that the ruling should NOT have a chilling effect on other countries' GM import policy, because the criticism was in fact on a point of EU process, and did not actually judge the safety of GM foods, or criticise European GMO legislation.  Under the UN Biosafety Protocol, countries still have the right to control trade in GMOs. This ruling should not therefore influence other countries' rights to protect themselves against GMOs if they wish.  

Friends of the Earth said, "This is no victory for the United States or the biotech companies. Countries still have the right to ban or suspend genetically modified foods and crops. Europe's only failure was the way they did it and not why they did it."

The point on which the WTO criticised the EU, was that they did not comply with WTO risk assessments, and that there was undue delay in the approvals process.  The report also found against bans on GMOs held in several EU regions, but accepted that moratoria might be valid in certain situations.

The US (with Argentina and Canada, together the 3 biggest GM producers in the world), claimed that the EU was rejecting imported GM on purely political, protectionist economic grounds, and not on a scientific basis. EU citizens would strongly oppose this claim, since it was consumer doubts over GM safety that led to political pressure to delay approvals of GM and instigate bans on GM in several regions in Europe.   Although we know that scientific submissions were made to highlight the uncertainties over GM foods, the WTO report did not include any findings on safety concerns, but avoided the issue altogether.

The European Union claimed however, that the findings would not affect their policy.  A new ban on GMOs was approved in Poland this week, and a spokesman for the Austrian ministry of science said that they would keep to their reluctant stance towards GMOs, regardless of the WTO ruling.  In 2004, labelling laws were introduced to signal the end of the de facto moratorium. Due to consumer resistance, labelling requirements have still meant that few producers will use GMOs in their food products, and Europe remains largely GM-free in practice.  This continues to anger US exporters such as the American Soygrowers Association.  But many suspect that efforts to force unwanted GM on European consumers will backfire, as these actions could lead to suspicion and resentment, and even stronger anti-GM feeling.

Best wishes,

Teresa

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1. Right to Remain GE-Free Overrides WTO Ruling Press Release from Greenpeace. 
Date: 10 May 2006
http://www.greenpeace.org/international/press/releases/right-to-remain-ge-fr ee-overri

2. US Did Not Win Transatlantic GM Trade Dispute Press Release from Friends of the Earth. 
Date: 10 May 2006
http://www.foe.co.uk/resource/press_releases/us_did_not_win_transatlant_1105 2006.html

3. WTO Confirms Ruling Against EU GMO Moratorium Article from Reuters.  Date: 12 May 2006 Richard Waddington http://www.planetark.org/dailynewsstory.cfm/newsid/36326/story.htm

4. WTO Ruling Against EU Unlikely to Have any Effect Article from EU Observer, Belgium. 
Date: 11 May 2006 Helena Spongenberg http://english.pravda.ru/news/world/11-05-2006/80133-WTO-0

5. EU Backs Poland's GM Crop Ban Article from Food Navigator, France.  Date: 10 May 2006 Chris Mercer http://www.foodnavigator.com/news/ng.asp?n=67593-gm-commission-poland

6. Looking Behind the US Spin: WTO Ruling Does Not Prevent Countries from Restricting or Banning GMOs Briefing from Friends of the Earth  www.foei.org/media/2006/WTO_briefing.pdf

7. EC Biotech: Overview and Analysis of the Panel's Interim Report Briefing from the Center for International Environmental Law (CIEL). Date: March 2006 http://www.ciel.org/Publications/EC_Biotech_Mar06.pdf

8. ASA Calls EU Traceability & Labeling Review a Whitewash Press Release from American Soygrower Association, USA. 
Date: 10 May 2006  http://www.soygrowers.com/newsroom/r051006b.htm *****************************

 1. Right to Remain GE-Free Overrides WTO Ruling

Press Release from Greenpeace. 
Date: 10 May 2006 http://www.greenpeace.org/international/press/releases/right-to-remain-ge-fr ee-overri

BRUSSELS - May 10 - Greenpeace was dismissive of a World Trade Organisation (WTO) ruling, due to be released today, on a US-sponsored case which was attempting to force EU countries to accept genetically engineered (GE) organisms, in spite of overwhelming public opposition in Europe.

Greenpeace called the WTO 'unqualified' to deal with issues around GE organisms and rejected the verdict of the US-driven court case backed by Canada and Argentina which was attempting to use the WTO to force GE organisms onto the EU. (1)

"All this verdict proves is that the WTO is unqualified to deal with complex scientific and environmental issues, as it puts trade interests above all others. Its only effect has been to reinforce the determination of EU countries to resist bullying by pro-GE governments and to say no to GE crops and food," said Eric Gall, Greenpeace EU policy adviser.

Despite initial US claims of victory, the interim ruling showed that the WTO panel rejected many of the US arguments, and only gave the EU a 'slap on the wrist' for taking too much time to apply its own legislation. The panel came out against national bans on GE, but did concede that national bans are justifiable, provided a risk assessment is conducted (2).

"The US claims of victory are exaggerated, and will not deter the increasing number of countries in the EU and around the world which act to stop the release of GE organisms," said Daniel Mittler, Greenpeace International WTO expert. "While the WTO ruling fails to uphold the precautionary principle, which should be the basis of GE organism policies globally, it does affirm that governments can continue to ban GE organisms if they so wish."

"There are now 12 GE organism bans in seven EU countries, more than in 2003 when the US presented its case against the EU to the WTO. Only last week, Poland banned the cultivation of genetically engineered crops; a slap in the face to US agro-chemical giants, as Poland is the second biggest agricultural food basket in the EU" said Eric Gall Greenpeace EU policy adviser. 

Documents submitted by the EU to the WTO reveal that the Commission defended the "large areas of uncertainty" regarding the impact of GE organisms on health and the environment, and that "some issues have not yet been studied at all" (3). On 12 April, the Commission announced that it was taking steps to improve the risk assessment of GE organisms; current procedures are deemed insufficient and untransparent by most European governments (4).

Greenpeace is an independent, campaigning organisation which uses non-violent, creative confrontation to expose global environmental problems, and to drive solutions essential to a green and peaceful future.

NOTES TO EDITOR:

1. In August 2003, the US, backed by Canada and Argentina took the EU to the WTO for suspending approvals for biotech products, and for six EU member states' implementing national bans on EU-approved GE organisms.

The EU Commission tried to use the WTO case to force five European countries (Greece, France, Austria, Luxembourg and Germany) attacked by the US to lift their national bans (Italy, the sixth, lifted its ban two years ago).

When the EU Commission put its proposal to lift the bans to a vote at the EU Council of Environment Ministers on 24 June 2005, 22 countries out of 25 voted against the Commission, concluding that the bans were justified and should remain. This forced the EU Commission to withdraw its proposals.

Greenpeace briefing on national safeguard clauses ('bans'): http://eu.greenpeace.org/downloads/gmo/NationalBans0507.pdf

2. http://www.foeeurope.org/publications/2006/WTO_briefing.pdf

3. http://eu.greenpeace.org/downloads/gmo/WTOpapers060418.pdf

4. IP/06/498, Brussels, 12 April 2006, "Commission proposes practical improvements to the way the European GMO legislative framework is implemented" Additional documents Greenpeace briefing on the WTO dispute on GE organisms is available at http://eu.greenpeace.org/downloads/gmo/WTObriefing0602.pdf

CONTACT: Greenpeace Daniel Mittler, Greenpeace International WTO expert +49 171 876 5345 Suzette Jackson, Greenpeace International communications officer +31 6 4619 7324  Katharine Mill, Greenpeace EU Unit media officer, +32 496 156 229 (in Brussels) Eric Gall, Greenpeace EU policy advisor +32 496 161 582 (in Brussels)

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2. US Did Not Win Transatlantic GM Trade Dispute

Press Release from Friends of the Earth. 
Date: 10 May 2006 http://www.foe.co.uk/resource/press_releases/us_did_not_win_transatlant_1105 2006.html

WTO still wrong place to settle such rows

Brussels, 10 May 2006 - The United States has failed in its bid to prevent the European Union from using strict regulations to control genetically modified (GM) foods and crops. The World Trade Organisation (WTO) made a final judgement on this issue last night.

Adrian Bebb, Friends of the Earth Europe's GMO campaigner, commented: "This is no victory for the United States or the biotech companies. Countries still have the right to ban or suspend genetically modified foods and crops. Europe's only failure was the way they did it and not why they did it. Public opposition around the world is solid, and neither the United States or the WTO will stop countries from protecting their citizens and the environment from the risks of genetically modified crops".

The WTO last night sent its final ruling to parties involved in the dispute. And, although the decision will not be made officially public until the autumn, media reports have confirmed that it is substantially the same as the 'draft ruling', which was leaked to Friends of the Earth Europe in February [1].

The WTO's draft ruling rejected most of the US-led coalition's complaints: * It refused to rule against strict EU regulations to control the use of GM food and crops; * It refused to rule on whether GM foods are safe or different to conventional foods; * It rejected US claims that moratoria are illegal and did not question the right of countries to ban GM foods or crops.

However, the WTO did rule - on technicalities - that Europe's four year GM moratorium, which ended in 2004, broke trade rules by causing "undue delays". However, the WTO did not recommend any action against the EU and stated that moratoria were acceptable under certain circumstances. The WTO said national GM bans also broke trade rules, but only because the risk assessments did not comply with the WTO requirements;

Friends of the Earth Europe also called for a fundamental overhaul of the way that trade disputes are sorted out in future. A fairer and more transparent body should be used that also takes into account international environmental treaties such as the Permanent Court of Arbitration or the International Court of Justice.

Friends of the Earth Europe's Trade Campaigner, Sonja Meister, said: "Despite today's ruling, the WTO is the wrong body for settling trade disputes. It has a long history of putting corporate interests firmly ahead of environmental protection, public safety and democracy. It is time that environment-related disputes were taken away from the WTO."

The United States, Argentina and Canada filed a trade dispute in the WTO in May 2003 against Europe's reluctance to accept genetically modified foods or crops. Europe argued that many GM crops should not be grown because of their unknown effects on the environment and that it was not yet known whether eating GM foods would cause cancer, allergies or other health effects [2].

Friends of the Earth Europe believes that the WTO is the wrong forum for dealing with environment-related trade disputes due to its long history of bias towards industry, its pro-trade agenda and its lack of transparency.

In this particular case the WTO failed to consider other international environmental laws such as the Convention on Biodiversity and the Biosafety Protocol. In addition it refused to consider all submissions made by the public and held all meetings in secret. In sending the draft final ruling only to the dispute countries, it allowed the US to tell the media in February that it had won the dispute when the real result was quite different [3]. The environment group has called for such disputes to be dealt with away from the industry-friendly WTO.

Notes:

[1] The 1000 page interim report and a shorter analysis by Friends of the Earth can be downloaded from: http://www.foeeurope.org/biteback/WTO_decision.htm

The interim report showed:

* Europe's four-year moratorium on GM Organisms (GMOs) only broke trade rules because it caused "undue delay" in the approval of new GM foods. The WTO dismissed eight other complaints in relation to the moratorium, and did not recommend any further action, since the moratorium ended in 2004

* There was also an "undue delay" in the EU's approval procedures for over 20 specified biotech products. However, eleven other claims of the complainants related to the product-specific EU measures were dismissed by the WTO Panel.

* National bans by EU member states broke trade rules only because the risk assessments used by the countries in question did not comply with the WTO requirements;

[2] Europe's scientific case has been summarised in a report by Friends of the Earth and Greenpeace. The report, Hidden Uncertainties, can be downloaded for free from http://www.foeeurope.org/publications/2006/hidden_uncertainties.pdf

[3] FOE Europe has assessed the relative merits of a range of intergovernmental institutions, in relation to their capacity to deal equitably with trade and environment disputes. The conclusion is that the WTO is in fact the least suitable of all institutions considered, and the Permanent Court of Arbitration or the International Court of Justice would be the most appropriate venue. "Is the WTO the only way?", which can be downloaded from http://www.foeeurope.org/publications/2005/alternatives_wto.pdf

CONTACT

Adrian Bebb, Friends of the Earth Europe GMO expert: +49 1609 490 1163 Sonja Meister, Friends of the Earth Europe Trade expert: +32 4849 75107

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3. WTO Confirms Ruling Against EU GMO Moratorium

Article from Reuters. 
Date: 12 May 2006
Richard Waddington http://www.planetark.org/dailynewsstory.cfm/newsid/36326/story.htm

GENEVA - The World Trade Organisation (WTO) has confirmed in a final ruling that a European Union moratorium on genetically-modified (GMO) foods was illegal, but Brussels said on Thursday the finding would not affect policy.

The verdict, which was widely expected, also condemned six member states -- Austria, Belgium, France, Germany, Italy and Luxembourg -- for applying their own bans on a number of GMO products previously approved by the European Commission. "The substance of the ruling has not changed," said one diplomat with knowledge of the finding, which was issued late on Wednesday but not made public.

The WTO made a preliminary ruling in February.

The decision, in a case brought by the United States, Canada and Argentina, the world's biggest GMO producers, did not touch on the sensitive issue of whether GMOs are safe or whether they can be considered comparable to conventional products.

The EU, where consumers are suspicious of what are often called "Frankenfoods", said there was no need for a rule change because the six- year moratorium on approving GMOs ended in 2004.

Manufacturers have also withdrawn virtually all products covered by the individual state bans with the exception of a couple in Austria.

"The US and other complainants did not challenge the EU's regulatory framework on GMOs, which is rooted in science-based risk assessment. Nothing in this panel report will compel us to change that framework," a Commission spokesman said in Brussels.

"Europe will continue to set its own rules on the import and sale of GMO foods," spokesman Peter Power told a news briefing, adding it was not the case that the EU operated a moratorium on GM foods, noting it had approved nine products since last May.

 BULLY OTHER COUNTRIES

A spokesman for the United States Trade Representative said that he could not comment because the report was confidential.

"When the report is made public, we expect WTO members to come into compliance and honour the rules-based trading system," said spokesman Stephen Norton.

But anti-GMO activists were adamant nothing had changed.

"It is clear that the US, Canada and Argentina will not be able to use this ruling to bully other countries to accept GMOs," said Eric Gall, political adviser to environmentalist group Greenpeace in Brussels.

The 1,000-page report, which will not be officially released for some six weeks, found that by not approving GMO products between 1998 and 2004, the EU was applying an effective moratorium. This constituted "undue delay" and therefore violated trade rules.

In addition it said the six countries had given no scientific evidence to justify their banning GMO products -- mainly maize and rapeseed -- which the EU had declared safe.

GMO-making companies such as Monsanto applauded the February ruling because they said it underlined the need for decisions affecting trade to be based on science.

"We are encouraged by the international trading community's support for science-based regulatory approvals," said Christian Verschueren, director-general of CropLife International, a global federation representing manufacturers.

The United States, which said its farmers lost US$300 million a year because of the EU action, also welcomed it. Washington says it could help overcome reservations about GMO crops in other parts of the world.

Both sides can appeal and it could be six months or more before the case is settled.

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4. WTO Ruling Against EU Unlikely to Have any Effect

Article from EU Observer, Belgium. 
Date: 11 May 2006
Helena Spongenberg http://english.pravda.ru/news/world/11-05-2006/80133-WTO-0

 The European halt on the import of genetically modified products violated international rules, the world trade body WTO has ruled.

In a report leaked to the press on Thursday (11 May), the WTO argued that the EU was wrong in preventing the use of new modified varieties of corn, soybeans and cotton between 1998 and 2004 on its market without it being scientifically justified.

The Geneva-based organisation also criticised the six EU countries with bans on biotech products already approved by the European Commission.

But questions remain on what impact the ruling will actually have on the EU.

"Europe will continue to set its own rules on the import and sale of GMO foods," said Peter Power, a commission spokesman.

"It is self-evidently not the case - as the US sometimes claims - that the EU operates a moratorium on the approval of GM foods," he said, adding that the bloc has approved nine products since last May.

"Nothing in this panel report will compel us to change," Mr Power stated.

The 1,050-page report did not comment on the touchy issue of whether GMOs are safe or whether they can be considered comparable to conventional products.

"It's not a victory for the Unites States or the biotech industry," said Adrian Bebb, a biotech campaigner for the environmental group Friends of the Earth.

"It's still possible to impose tough restrictions on GMOs to protect the people and the environment from genetically modified crops," he said and added that the US through clever public relations had made it look like the EU lost the case.

 National GMO bans

The WTO ruling also criticised the member states with national bans on GMO products - Austria, Belgium, France, Germany, Italy and Luxembourg.

"We will stick by our policy of being very reluctant [towards GMOs]," said Daniel Kapp, spokesman of the Austrian ministry of science. He claimed that the WTO ruling would have no effect on Austria's biotech policy. 

Vienna has based the ban on the fact that no long term health safety tests have been done and that imports would likely lead to the accidental spillage of the seed into the environment.

The ruling was also welcomed by CropLife International - a global federation of biotech producers.

"Regardless of the outcome of this case, it is clear that biotechnology is here to stay," said head of the federation Christian Verschueren.

 The world's three biggest biotech producers

Argentina, Canada and the United States filed a trade dispute to the WTO in 2003 over the EU freeze on biotech foods, saying it was an unfair barrier to producers of GM products who wanted to export to the European Union.

They accused the EU moratorium of being about protectionism rather than science.

"The approval process and the consumer safety standards applied in the EU may be more stringent than in the US," said Mr Power.

"But GM imports to the EU are rising especially from competitive exporters like Brazil and Chile," he added.

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5. EU Backs Poland's GM Crop Ban

Article from Food Navigator, France. 
Date: 10 May 2006
Chris Mercer http://www.foodnavigator.com/news/ng.asp?n=67593-gm-commission-poland

10/05/2006 - Poland's controversial ban on the use of 16 varieties of genetically modified maize has been backed by the European Commission, despite warnings the law broke EU rules.

The Commission authorised the ban, which also prohibits the use of around 700 non-GM maize varieties in Poland, after it was given unanimous approval by EU member states. The move is the latest in the ongoing row over genetically modified (GM) crops and food, and threatens to put the EU back on a collision course with the World Trade Organisation.

Poland's government, which passed the ban in the country's parliament last week, used cultivation rules set out in a 2002 EU Directive to justify its stance.

The clause says any Member State can ban crop varieties that are not suitable for growing on its land. Poland said both the GM and non-GM maizes had a long growing cycle and, because of the country's climate, would not reach the necessary ripeness needed for harvesting.

The ban has caused considerable debate in Poland, which agreed to drop a previous ban on GM crops before joining the EU in May 2004.

Several leading Polish scientists led a public appeal against re- introducing a GM ban because it could hamper research. The US Foreign Agricultural Service also reported that the Polish Senate was split on the proposal.

The victory for those in favour, which can now only be dashed by Poland's president Lech Kaczynski, could lead to serious repercussions on the world stage.

The World Trade Organisation (WTO) ruled in February this year that the EU and six member states had broken free trade rules by imposing a moratorium on GM imports between June 1999 and August 2003.

The decision, in theory, opened up the EU market to GM food.

The issue, however, remains contentious and strong public opinion against GM food has forced major food companies and retailers to issue non-GM guarantees to customers in recent years.

Arguments over the safety of GM food have also been joined by debate on how GM and non-GM crops could co-exist, ensuring consumers continue to have a choice.

Anti-GM campaigners argue that GM crops will cause widespread contamination, leaving consumers with no GM-free choice at all. Pro-GM forces on the other hand argue that consumers must be given the choice, and that the WTO ruling backs this up.

The safety and co-existence debates have consistently split member states in the European Council over the last couple of years, despite the Commission approving several GM crop varieties for use in animal feed.

Cost may, in the end, be a crucial factor. Europe's opposition to GM food could increase costs for food firms by up to 16 per cent in some cases over the next three years as it becomes ever harder to source non- GM supplies, according to a report commissioned last year by Agricultural Biotechnology Europe.



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6. Looking Behind the US Spin: WTO Ruling Does Not Prevent Countries from Restricting or Banning GMOs

Briefing from Friends of the Earth www.foei.org/media/2006/WTO_briefing.pdf

EXECUTIVE SUMMARY

The US Government is proclaiming victory in the WTO case launched against the European Union (EU) on Genetically Modified Organisms (GMOs). On 7 February the US Government used the publication of the WTO draft ruling to threaten the rest of the world "against following the European lead in throwing up bans or partial bans against genetically modified crops." Initial analysis of the full WTO report, now leaked to Friends of the Earth, makes it clear that both the claim to victory and the threats are very misleading. The WTO interim ruling does not question the right of countries to adopt strict biosafety legislation or even bans, to protect the public and the environment from GMOs.

The interim result of the case is mixed. The report gives limited support to some of the US claims, but comes out against most and does not go nearly as far as the US hoped it would in supporting trade in the technology.

What the US lost The US tried to obtain a ruling which explicitly declared the EU's moratorium per se illegal. However, the WTO panel of trade experts did not accept the US's arguments. Moreover, they reaffirm that specific and general moratoria on GMOs could be justifiable, even under WTO parameters. The ruling says: "if new scientific evidence comes to light which conflicts with available scientific evidence and which is directly relevant to all biotech products subject to a pre-marketing approval requirement, we think that it might, depending on the circumstances, be justifiable to suspend all final approvals pending an appropriate assessment of the new evidence".

The US, together with the other complaining parties ­ Canada and Argentina, also claimed that the EC failed to consider applications to approve specific GM products by introducing "product specific marketing bans or moratoriums", resulting in various violations of the EU's WTO obligations. They argued that such specific bans and moratoria were not based on risk assessments which would constitute a violation of the WTO's SPS agreement1. But once again, the WTO Panel did not accept their arguments, concluding that the EU breached only one of its obligations: there was "undue delay" in approval procedures for over 20 specified biotech products. All other claims that the product-specific measures breached other WTO obligations were dismissed.

The Panel did find the bans on GMOs in EU Member States Austria, Belgium, France, Germany, Italy and Luxembourg to be EU failures to meet its obligations under the SPS Agreement. Critically, however, the Panel did not question the right of the EU member States to ban GMOs, which is recognized in its main Directive 2001/18, and is permitted under the SPS agreement. What the Panel examined was whether the elements that triggered such bans fulfilled WTO requirements. They concluded that the risk assessments presented by some Member States to justify their bans did not meet the requirements of "risk assessment" laid out in the SPS Agreement. (The Panel identified that most studies were missing the likelihood element, i.e. they did not assess "the probability of entry, establishment or spread of diseases and associated biological and economic consequences". In the light of such interpretation, the Panel recommended that these bans should be brought into conformity with the SPS agreement. However, this part of the Panel's interim report needs to be fully examined now that it is publicly available. The gaps and lack of consensus in scientific knowledge, and the application of the precautionary principle are fundamental issues in ensuring biosafety, thus the interpretation by the Panel needs close analysis.

Strict Biosafety rules permitted The EU has one of the strictest regulatory frameworks for GMOs in the world, including mandatory pre-market assessments for all types of GMOs and products thereof imported to its territory, clear identification and labelling provisions, and traceability and monitoring provisions. This interim ruling does not touch upon these issues. It is therefore clear that it will not change the EU regulatory and policy regime for GMOs, and does not undermine the right of countries to introduce such strict regulatory frameworks at the national level.

In fact, the EU's regulations were never being questioned, just the way in which they were applied. Furthermore, the ruling will not accelerate the formal approvals of GMOs in the EU, as only limited claims of "undue delay" regarding the application of EU approval procedures were upheld. It will not prevent the dozens of Governments around the world who are currently developing regulatory systems for GMOs from proceeding, as they retain every right to do. Faced with this, the US Government is now trying to use a selective reading of the ruling and media hype to dissuade governments worldwide from exercising their rights to restrict the entrance of GMOs into their countries.

Opposition to GMOs in Europe More importantly, European public opinion remains steadfastly hostile towards GM food. The WTO did not rule on two important questions put before it, namely whether GMOs are effectively the same as non-GM foods, or if they are safe. Such a ruling is unlikely to persuade the public or EU institutions to accept GMOs. Quite to the contrary, opposition is growing: in the past few days Hungary has declared that it is in its economic interests to remain GM-free, and Greece and Austria have affirmed their total opposition to the crops. Opposition at local government level in Europe is also increasing, with more than 3,500 elected local governments and 170 specific regions in Europe now declaring themselves GM-free. As of November 2005, even the WTO's Geneva headquarters are in a country operating a legally binding moratorium on the cultivation of GM crops. The WTO's refusal or inability to cope with this reality is now plainly on show.

The final ruling on this dispute is expected in April 2006 and may be followed by an appeal phase. This briefing provides a preliminary analysis of the leaked WTO interim report, as well as the context of the WTO decision and likely impacts.

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7. EC Biotech: Overview and Analysis of the Panel's Interim Report

Briefing from the Center for International Environmental Law (CIEL).  Date: March 2006 http://www.ciel.org/Publications/EC_Biotech_Mar06.pdf

Executive Summary

On February 7, 2006, a Dispute Settlement Panel at the World Trade Organization (WTO) issued the interim report in the European Communities ­ Measures affecting the Approval and Marketing of Biotech Products (EC-Biotech) case. Interim reports in the WTO contain all of the elements of a final report, but are released only to the parties to the dispute. This tendency towards secrecy and a closed-door approach is endemic to dispute settlement in the trade sector and has permitted the misrepresentation of the findings of the WTO Panel. The lack of transparency is particularly worrisome in cases where public health and the environment are at stake. As of this writing, the EC-Biotech report is still officially interim and secret, but has been made available to the public by Friends of the Earth Europe, which obtained a leaked report.

The objective of the present note is to provide an overview of the main findings and reasoning in the Panel's Interim Report. In its report, the Panel addressed the various categories of European Communities (EC) and EC Member State measures challenged by the United States, Canada, and Argentina, and found each type of measures was ­ at least in certain respects ­ inconsistent with WTO rules. The measures in question were categorized into three types: an alleged EC moratorium on approvals of biotech products, product-specific EC measures related to the approval of biotech products, and measures related to the import and/or marketing of specific biotech products. The Panel found most of the challenged measures to fall under the scope of the Agreement on Sanitary and Phytosanitary Measures (SPS Agreement), an agreement with much more stringent risk assessment and science requirements than other agreements under the WTO such as the General Agreement on Tariffs and Trade (GATT) or the Agreement on Technical Barriers to Trade (TBT Agreement) that could also have been found applicable.

First, the Panel concluded that the general de facto moratorium and product-specific measures affecting product approval had resulted in a failure to complete individual approval procedures without undue delay, and hence gave rise to an inconsistency with Article 8 and Annex C of the SPS Agreement. The Panel did not find the general moratorium to be substantive SPS measures subject to the science and risk assessment provisions of the SPS Agreement. Rather, the Panel regarded these measures collectively to be a procedural decision to avoid making final decisions about product approvals, and thus subject only to the SPS procedural requirement not to cause "undue delay" in the approval procedure for biotech products. Although the Panel found there were no legitimate reason or justification for the delay in the present case, it also considered that the decision to delay the completion of approval procedures by imposing a general moratorium on final approvals of biotech products might be justifiable in other cases.

Second, the Panel found that the measures taken by some EC Member States restricting the import, use, and marketing of certain biotech products - safeguard measures taken in relation to products already approved at the EC level - failed to meet the requirements of the SPS Agreement. In particular, the safeguard measures were found to be inconsistent with the obligation for SPS measures to be based on a risk assessment. The Panel found that the safeguard measures fell outside the scope of Article 5.7 of the SPS Agreement, Center for International Environmental Law (CIEL) March 2006 which allows members to adopt provisional SPS measures where relevant scientific evidence is insufficient. The scientific evaluation of the products at issue at the European level, which all Parties agreed constituted risk assessments under the SPS Agreement, had, in the view of the Panel, proved that scientific evidence was "sufficient." Moreover, because this scientific evaluation had resulted in the approval of the products - it could not justify measures to restrict them. Other scientific evidence presented by EC Member States was considered not to meet the characteristics of a risk assessment under the SPS Agreement. As a result, the safeguard measures were found not based on a risk assessment as required by Article 5.1 and thus were found inconsistent with the SPS Agreement.

Finally, the Panel rejected the EC's argument that the Panel should take the 1992 Convention on Biological Diversity (CBD) and the 2000 Cartagena Protocol on Biosafety (Biosafety Protocol) into account when interpreting the relevant WTO rules in this specific case. The Panel found that according to the Vienna Convention on the Law of Treaties it did not have the obligation to take these treaties into account when interpreting WTO rules since not all parties to the dispute were parties to the CBD and the Biosafety Protocol. Moreover, the Panel indicated, without taking a definitive position, that the Vienna Convention's obligation to take other agreements into account when interpreting WTO rules might only come into play in situations where all WTO Members are parties to the other agreement. The Panel also noted, however, that while there was no obligation to take into account other agreements, panels were nevertheless free to take into account other relevant agreements when wishing to do so. In this case, however, the Panel, without much explanation, concluded that it was not useful to take the CBD or the Biosafety Protocol into account.

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8. ASA Calls EU Traceability & Labeling Review a Whitewash

Press Release from American Soygrower Association, USA. 
Date: 10 May 2006 http://www.soygrowers.com/newsroom/r051006b.htm

Saint Louis, Missouri... May 10, 2006... On behalf of its 25,000 U.S. soybean producer-members, the American Soybean Association (ASA) is outraged by the conclusions adopted today by the European Commission on the trade impact European Union (EU) Traceability & Labeling laws for biotechnology-derived products have had on exports of U.S. agricultural products.

"The EU's biotech labeling and tracing rules have had a significant negative effect on U.S. exports of food and agricultural products to the EU," said ASA President Bob Metz, a soybean producer from West Browns Valley, S.D. "For the report to say that the rules have had a positive effect by providing relevant information, consumer choice and safety guarantees is nothing short of a whitewash and a betrayal of the very consumers the EU claims to care about. We are amazed that the Commission would write such fiction when market realities and trade numbers tell a very different story."

The EU first implemented mandatory labeling regulations in 1997, requiring foods that contain biotech ingredients to be labeled. Because EU consumers perceive biotech labels as health warnings, European food companies and dozens of major food manufacturers outside Europe who market their products in the EU, choose to reformulate their products or find new, non-U.S. sources of supply in order to avoid labeling their products as biotech.

For example, because soybean oil must be labeled, despite the fact that no detectable DNA from a biotech soybean is in the oil, EU processors moved away from U.S. soybeans. As a result, the value of U.S. exports of soybeans and soybean products fell by 65 percent between 1997, when the first biotech labeling rules for food went into effect, and 2004, from $2.5 billion to $874 million. Total U.S. exports of products falling within the scope of the EU regulations have dropped from $4.2 billion in 1996 to $1.6 billion in 2004.

"Most EU food companies have expressed their confidence in the safety of biotechnology," Metz said. "Nevertheless, they have made clear that they are doing everything possible to avoid having to put a biotech label on their products."

"The cost of complying with labeling and traceability rules drives up prices and makes U.S. producers of corn, soybeans and processed products less competitive," Metz said. "Unlike conventional trade barriers, labeling requirements rarely stop products at the border. Rather, they affect demand for imported products by causing food companies and feed compounders to reformulate their products or seek new sources of supply, and retailers to switch to food products that do not contain biotech ingredients."

The effect is even more evident when individual product categories are examined. Comparing U.S. exports to the EU between 1997 and 2004 for nine categories of processed products shows that exports of the five categories of products that are unlikely to contain biotech ingredients increased by an average of 46 percent over the period, while exports of the four categories most likely to contain biotech ingredients decreased by an average of 36 percent.

"U.S. farmers and food companies are losing hundreds of millions of dollars a year in lost sales due to the EU's trade-restrictive and non- science based biotech labeling and tracing rules," Metz concluded. "We believe the time has come for the United States Government to mount a WTO-challenge against these rules. Doing so would expose them for what they are - discriminatory trade barriers that have nothing to do with health or safety and that have actually decreased consumer choice."

For more information about the impact the EU Traceability & Labeling laws have had on exports of U.S. agricultural products, see ASA's T&L Trade Effects Paper available at: www.soygrower.com/eutl/.

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EU to Hold Firm on Modified Seeds Despite WTO

Article from Bloomberg News/ International Herald Tribune. 
Date: 11 May 2006 http://www.iht.com/articles/2006/05/11/business/wto.php

GENEVA The European Union vowed Thursday to maintain its system for approving genetically engineered seeds, after the World Trade Organization confirmed a ruling that found the previous approvals practices too slow.

In a confidential ruling, WTO arbitrators on Wednesday confirmed a February decision that said the EU's former ban on new biotech seeds from companies like Monsanto DuPont and Syngenta broke international trade laws. The ruling does not challenge the EU's food approvals system, the bloc says, because it ended a six-year moratorium in 2004.

"Nothing in this panel report will compel us to change that framework," said Peter Power, the European Commission spokesman on trade. "The EU will continue to set its own rules on the import and sale of genetically modified food," he added, saying that nine new biotech products have been approved in the past year.

The ban, led by nations like France, Austria and Italy, cost American exporters $300 million a year in the $5.5 billion global biotech market, U.S. industry groups have said. The EU, which grows less than 1 percent of the world's genetically modified crops, has 98 million hectares, or 242 million acres, of global arable land, second only to the United States.

The WTO ruling may set a precedent for countries like India, Japan or Russia that require the labeling of foods with gene-altered ingredients.

The commission, the EU's executive body, says new laws in place since 2004 allow biotech seeds to be planted, traced and labeled, pointing to more than 30 modified products approved for marketing in the 25-nation bloc. New procedures also allow the import of gene-altered foods and give the commission the final say if governments can not agree on a product.

"The EU just has to do risk assessments" to justify bans on new biotech approvals, said Adrian Bebb, a campaigner at environmental group Friends of the Earth. "The WTO doesn't recommend any action on the moratorium," that ended, he said.

Nor does the WTO ruling strike down the bloc's right to treat the technology differently from conventional crops.

When the initial ruling came out, the commission described it as "largely of historical interest" and blamed national governments for continuing to obstruct new approvals.

The United States argued that the EU approval process for imports of biotech foods led to unnecessary delays resulting in a trade barrier. The EU said popular opposition - more than half of the region's 450 million consumers consider gene-engineered foods to be dangerous, according to an EU poll last June - meant consumers already were avoiding modified foods.

Governments in countries like Germany and France, as well as activists including Greenpeace International, say the crops threaten human health and the environment. The U.S. says the seeds are as safe as conventional seeds.

"Regardless of the outcome of this case, it is clear that biotechnology is here to stay," said Christian Verschueren, head of the Brussels-based CropLife International, which represents companies like Monsanto and DuPont. "Biotech plantings are even happening in the EU," he said, citing Spain, France, Portugal, the Czech Republic and Germany, "because of the benefits they bring."