News and Analysis • Volume 1 • Number 1 • October 2007
Compliance is a hard nut to crack in the biotech dispute
With the 21 November deadline rapidly approaching for the implementation of WTO rulings in the biotechnology dispute, the European Union has few options for full compliance with the panel’s findings.
Difficulties arise both from the ambiguities left in the September 2006 panel reports, as well as the complex European legal structure governing the approval of genetically modified organisms (GMOs). As is well known, three groups of measures were challenged and found in violation of WTO law: (i) the EU’s so-called de facto general moratorium on GMO approvals; (ii) some ‘product-specific measures’, i.e. the EU’s failure to approve several specific GMOs; and (iii) a number of EU member states’ safeguard measures.
When it comes to implementation, the first two sets of measures do not present major problems. With respect to the part of the rulings concerning the ‘general’ moratorium, despite some doubts voiced by the US,1 it seems clear that full implementation has been achieved both because the moratorium has been judged ‘applicable to all applications for approval’ and because the EU resumed GMO approvals in May 2004. In relation to the EU-wide product-specific measures, it suffices to note that by the beginning of 2007, most of the contested products had already been either approved by European authorities or withdrawn by the applicants.2
Of course, it does not follow that the rulings related to the general moratorium will have no influence on future European politics regarding GMOs. While Commission spokesman for trade issues Peter Power stated that the impact of the judgement was entirely ‘of historical interest’, its political relevance should not be underestimated. The importance of decisions about past issues is well-captured by George Orwell’s idea that those who control the past, control the future. The current activism of the Commission in approving (de facto unilaterally) several new GMOs lends support to this observation.
Where the trouble begins
While compliance with the general moratorium and product-specific ban rulings looks assured, individual EU member states’ national approval bans do indeed present major problems of implementation. In this respect, the European Commission does not have many viable options, and the few that exist are unlikely to be found satisfactory by the complainants (i.e. the US, Canada and Argentina).
Background on the GMO case at the WTO
In 2003, the US, with Argentina and Canada, filed a case against the EU with regard to its practices in the area of genetically modified organisms.
The complainants challenged the EU on three accounts, namely (i) the EU’s alleged general moratorium on biotech approvals, (ii) its failure to approve a number of specific biotech products (referred to as ‘productspecific measures’), and (iii) national-level bans in several EU member states on the marketing and import of specific biotech products that had already been approved at the EU-wide level.
The highly charged case pitted a notoriously GMO-sceptical European audience against countries with high stakes in the biotech industry and farm exports. Non-governmental organisations actively campaigned against any “force-feeding” of GM products to consumers, and the case was seen as having ripple effects, influencing country policies beyond those in the parties to the dispute.
The dispute settlement panel’s final report - over 2000 pages long - was made public on 29 September 2006. Broadly speaking, the panel sided with the US, Argentina and Canada on all three counts. It concluded that the general and product-specific moratoria had led to an ‘undue delay’ in the completion of the EU’s approval procedures for biotech products, thus breaching Brussels’ obligations under the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS). The panel also rejected the EU’s defence of the national-level bans as precautionary measures and called on the EU to bring the measures in conformity with WTO rules.
The solution most likely to satisfy the complainants would be the withdrawal of the safeguard measures maintained by six member states at the time of the ruling. To date, only Italy has done so, but the other five show no signs of following suit. Given that this solution is unlikely to emerge spontaneously, the Commission could go in two directions to implement the rulings. The first would be taking further action to force the member states to lift their bans. Alternatively, the Commission could argue that something has changed and that the existing safeguard measures are now in compliance with the rulings.
Forcing withdrawal
The Commission could ask member states to drop their national safeguard measures by submitting a draft decision requesting them to lift the bans. Indeed, the Commission already tried this back in 2005: a decision was first submitted to the Regulatory Committee in accordance with the so-called comitology procedure and, after the Committee failed to reach a decision, was forwarded to the Council on 24 June 2005. The latter rejected the Commission’s proposal in its entirety, reaching – for the first time ever – a qualified majority on issues concerning GMOs approval!
At this point, the Commission could have re-submitted a decision to the Council. Such a strategy was in fact pursued in the case of Austria, but the Council rejected the proposal on 18 December 2006. On 20 February 2007, the Council once again reached a qualified majority to reject the Commission’s draft decision, this time calling upon Hungary to lift its bans (not part of the measures contested in the WTO dispute). Based on these precedents, there is little hope that the Council will change its position in the near future. One might still argue that the Commission could challenge the member states’ measures by bringing an infringement action before the European Court of Justice (ECJ).3 Even if this option is legally conceivable, in practice it would be highly controversial. In substantive terms, the Commission might argue that the measures are violating EU law, but the ECJ’s acceptance of such an argument would render the comitology procedure established by the law almost meaningless. Another argument that the Commission could present to the court would be the direct effect of WTO law. This, however, is a much contested doctrine, and the politically charged atmosphere surrounding GMOs does not provide the best of opportunities for trying to apply it.4
If the question is legally intricate at best, politically it would be highly inappropriate for the Commission to initiate litigation at the ECJ. Thus, it seems that the Commission cannot do much more than what it has already unsuccessfully attempted in order to force the member states to revoke their bans.
Arguing for compliance
The main reasoning of the panel for finding the national bans in violation of the WTO Agreement on Sanitary and Phytosanitary (SPS) Measures was two-fold: the documents relied upon by the member states did not qualify as a risk assessment as defined in Article 5.1 and Annex A(4) of the SPS Agreement. Furthermore, Article 5.7, which allows countries to take provisional measures when available scientific evidence is insufficient to determine a product’s safety, was not applicable since a proper risk assessment had already been conducted both by the EU’s scientific committees and by the national competent authorities. This interpretation has been criticised on various grounds; the main problem, in my view, is that WTO Members could easily pre-empt the rights of others to invoke Article 5.7 by conducting a risk assessment first. In other words, under the panel’s interpretation there is a serious risk that Article 5.7 will be de facto inapplicable.
Under this scenario the only way to achieve compliance is for the member states to conduct a new risk assessment that meets the requirements of Article 5.1. At present, this is not likely to happen. However, Article 5.7 may be somewhat resuscitated if one re-reads the rulings in light of the panel’s annexed letter (annex K of the reports), opening up another road to compliance.
A possible way out?
It has been argued that the panel’s letter has somewhat relaxed the straight-jacket interpretation given in its original reports.5 In particular, the part of the letter stating that the panel’s findings “leave room for the possibility that even if at a given point in time relevant scientific evidence is sufficient to perform a risk assessment, a situation might subsequently arise where the relevant scientific evidence could be considered insufficient to perform a risk assessment [...] It is conceivable [...] that relevant new scientific evidence would negate the validity of the scientific evidence on which an existing risk assessment relied, without, however, being sufficient, in quantitative and qualitative terms, to allow the performance of a new risk assessment.” Accordingly, one could argue that, should a new risk assessment be conducted by the countries imposing the bans, and should this prove that the relevant scientific evidence is no longer sufficient, Article 5.7 might still be invoked (provided that its other conditions are fulfilled). It remains to be seen how such a scenario would play out in practice.
While this approach seems more consistent with the overall European approach (for one, because of the importance for the EU of keeping alive the essence of the precautionary principle, embodied by Article 5.7), it is undeniable that it rests on a far-fetched interpretation of the reports where the panel’s letter assumes a surprisingly central role. Moreover, it is likely that such a course of action would leave the complainants unsatisfied and spur new controversies.
These notes have attempted to shed light on why the EU member states’ national GMO approval bans are expected to raise serious implementation problems. It follows that the establishment of a compliance panel pursuant to Article 21.5 of the Dispute Settlement Understanding is the most likely next step. Notably, the original dispute focused on specific measures adopted in relation to the approval of GMOs, not European legal framework as such. Ironically, compliance in this case may be at odds with some features of the EU’s current GMO approval regime itself.6
Alessandra Arcuri is Assistant Professor International Economic Law and Law and Economics, School of Law, Erasmus University Rotterdam. The author is grateful to Sara Poli for thoughtful comments. The usual disclaimer applies.
1 On 21 November 2006, US Ambassador Peter F. Allgeier stated at the WTO Dispute Settlement Body “[a]lthough the EC has approved a handful of biotech applications following the initiation of the dispute in 2003, the EC has yet to lift the moratorium in its entirety.”
2 Poli, S. 2007. ‘The EC’s Implementation of the WTO Ruling in the Biotech Dispute’ in 32 European Law Review, pp. 705-26.
3 See Shaffer, G. and Pollack. 2007. Regulating Risk in the Global Economy: The Law and Politics of Genetically Modified Foods, Chapter 6. Oxford University Press.
4 For an overview see Cottier, T. and Schefer, K. 1998.‘The Relationship Between World Trade Organization Law, National Law and Regional Law’ 1 Journal of International Economic Law, pp. 83-122; see also Antoniadis, A. 2007. ‘The European Union and WTO: a Nexus of Reactive, Coactive and Proactive Approaches’ in 6. World Trade Review, pp. 45-87.
5 For a brilliant analysis of this issue see Poli, op. cit., pp. 721-23.
6 I believe that the implementation problems are in great part related to the fact that both European law concerning GMOs and WTO law simultaneously endorse two contrasting regulatory philosophies: on the one hand, an eminently technocratic approach where risk is conceived as something that can be fully understood by science and thereby rationally managed; on the other hand, a deliberative approach where understanding risk involves scientific knowledge but also culture, psychology and politics. This issue is further analysed in Arcuri, A. Interpreting the Concepts of ‘Risk Assessment’ and ‘Insufficiency of Scientific Evidence’: Juggling Between the Logics of Different Epistemic Communities? Paper presented at the Seventh Annual WTO Conference, BIICL, May 2000, London.