15 12 2006 - The World Trade Organisation has ruled that Europe's moratorium on GM organisms was wrong. But biotech companies beware - the decision does not mean that countries are ready to roll over, says Sue Mayer Last week, industry analysts were predicting that markets for GM crops would soon be expanding globally. Their claims were based on reports that the US, Argentina and Canada had "won" in their World Trade Organisation (WTO) dispute with Europe over GM crops and foods. For the GM crop growing countries and the biotech industry, the tactic of using the WTO to steamroller European recalcitrance over GM organisms (GMOs) seems to have come up trumps. But the reality is likely to be less clear, although the determination of the US to bully countries into accepting GM food shouldn't be underestimated.
The US, Argentina and Canada made their complaint to the WTO in May 2003. Europe's moratorium on approvals for importing and growing GM crops, introduced at the end of 1998, had angered the three countries, which grow around 90% of all GM crops. They also complained about bans by six countries, Austria, Belgium, France, Germany, Italy and Luxembourg, on certain GM crops that had been approved before the moratorium.
The US and its allies said the moratorium, "undue" delays in approvals, and national bans could not be justified scientifically. This was, they said, delaying progress in the development of GM crops and their role in tackling world hunger.
Europe responded by arguing that it had taken a justifiable precautionary approach because the science of GM crops and foods was uncertain.
The interim report of the WTO's dispute panel was finally sent to the parties on February 7. It was about 18 months behind schedule and ran to more than 1,000 pages, the longest in the WTO's history. Like the whole of the dispute proceedings, the report is confidential to the parties, and public access is limited to leaks. Only the conclusions and recommendations of the interim report are currently accessible via a leak to the Geneva-based Institute of Agricultural Trade and Policy.
In a nutshell, the WTO dispute panel has said that Europe's moratorium on GMOs - which ended in 2004 with the approval of a GM maize variety - led to trade rules being broken because it caused "undue" delays in the approvals process. In relation to individual products, the panel has also said that 24 of 27 applications awaiting approval were subject to "undue" delays. Scientific investigation
At a time of considerable political controversy, active revision of regulations and further scientific investigation into GMOs, the WTO's dispute panel has made the rather extraordinary judgment that Europe's assessments of GM crops and foods were simply taking too long.
The dispute panel also said the bans by six member states were not based on an adequate risk assessment and so were not scientifically justified according to WTO rules. This represents an intervention into countries' freedom to establish the levels of environmental and human safety they deem appropriate.
But what practical effect could the panel's report have? On the one hand, it could be used to pressurise countries to evaluate GMOs according to a narrow risk assessment that gains WTO approval, and to do this without "undue" delay. Any bans on GMOs could be judged to conflict with trade rules. Consumer choice, time for public deliberation, protecting non-GM or organic agriculture, or seeking maximum environmental and health protection seem, according to the WTO panel, not allowable. No doubt the US, Canada and Argentina will be pointing this out to other countries that have taken what they see as an unhelpful position on GMOs.
On the other hand, there is the public and political reaction to the WTO's decision. There is little evidence of increasing support for GM crops and foods, and moves to coerce countries and citizens into accepting GM food could backfire. There are now 172 regions and provinces in Europe that have declared themselves GM-free. A recent poll showed that 58% of European citizens are worried about GMOs. Austria and Greece have made defiant statements in response to the report and, in a national referendum last year, the Swiss voted for a five-year moratorium on the commercial growing of GM crops.
Scepticism about GM is not restricted to Europe. All the states in Australia growing oilseed rape have moratoriums on growing, despite federal-level approval for GM oilseed rape. Farmers in Mali have rejected GM crops as an attack on their way of life, and consumer surveys in Russia, China and South Africa demonstrate a lack of appetite for GM products. From this perspective, the WTO's intervention looks set to intensify controversy.
For trade between Europe and farmers in the US, Canada and Argentina, the decision will have little if any effect. The loss of trade in GM crops has not come as a result of regulatory delays, but because food producers have responded to consumer concerns by removing GM ingredients from products. There seems to be no intention on the part of European food companies to move from this position. Serious consequences
If there had not been a moratorium in Europe while new rules were agreed, several serious consequences would have arisen. The indirect effects on farmland wildlife of growing GM herbicide-tolerant crops would not have been considered in assessments, even though the UK's farm-scale evaluations showed that bird populations could be adversely affected by growing GM oilseed rape or sugar beet. There would have been no requirement to monitor environmental or human health effects. Consumers would not have been able to make a choice about products derived from GM crops, as new labelling laws now allow for. And there would have been no traceability requirement for GM foods, so if an adverse effect had emerged it would have been impossible to withdraw the product quickly and easily. Following bovine spongiform encephalopathy (BSE), traceability is a cornerstone of European food safety systems.
Europe's moratorium on GM crop approvals was not an "undue" delay - it allowed for the introduction of important new rules. All countries should be able to establish the safety rules that they consider appropriate for safety without fear of bullying and arm twisting.
Although the panel's interim report is provisional, based on past performance it is unlikely it will be modified before it has final approval. The EU can then appeal, but, if the appeal is upheld, the WTO will then ask the EU and member states to comply with the findings of the panel. Because the moratorium no longer exists, this is partly irrelevant. However, at least some of those countries with national bans look unlikely to roll over and submit. Only then will sanctions be discussed.
In today's world, with such widespread opposition to GM, the WTO complaint and the panel's report may look increasingly misjudged. Investors would be advised to show some caution about the future of GM crops because the instincts of the biotech industry in relation to consumer reaction are usually wrong.
· Sue Mayer is director of GeneWatch UK, one of a coalition of 14 international organisations that made a submission to the WTO dispute panel.
What they say about the WTO's finding
"This ruling enables developing nations to feel confident that they can adopt the modern crop technologies they need to feed their people while retaining access to European export markets."
CS Prakash, president, AgBioWorld Foundation
"The WTO can pass all the rules they want, but consumers in Britain and Europe don't want GM foods."
Peter Jones, committee chair, European Flour Milling Association
"Our feeling is that it's important for other countries than the EU to have science-based regulatory frameworks."
Chris Horner, Monsanto spokesman
"This shows how the WTO is acting against the interests of consumers and farmers. The US will now become more aggressive in dumping GM food on to third world countries."
Krishan Bir Chaudhary, chair of BKS, India's largest farmers' organisation
"If the ruling stands, it would be an important step for biotech crops around the world. The technology is improving food security and helping to reduce poverty worldwide."
Rob Portman, US trade representative
"We do not want GM foods and our hope is that all of us can continue to produce non-GM foods. The decision by the WTO does nothing to change our stand."
Mundia Sikatana, Zambia's agriculture minister
"The hysteria from the special interest groups is typical anti-technology philosophy: keep the poor and hungry dependent on handouts from big government; paint the US as a marketing bully; play up fear of innovation and science; and badmouth US food companies. This ruling appears to be one step towards preserving choices."
Steve Dittmer, executive vice-president, Agribusiness Freedom Foundation
"The protection of people and the environment have absolute priority, and the most recent scientific research vindicates our cautious approach in this matter."
Maria Rauch-Kallat, Austria's health minister
"This will open the door to more European customers for US businesses, but also will set an example for other world markets."
Leon Corzine, chair, US National Corn Growers' Association
"The EC must refuse to pay any compensation to these countries. They have wilfully insisted on producing something for which there is no market, and are deluded if they think this ruling will change that."
Gundula Azeez, policy director, Soil Association
"The WTO should be the last institution to decide what people eat and grow."
Alexandra Wandel, WTO campaigner, Friends of the Earth Europe
"We do not want GM on Polish territory."
Kazimierz Marcinkiewicz, Polish prime minister
"There is no viable market for GM in Europe, but US farmers could win back their market share by producing non-GM food that people want to eat." Carrie Stebbings, coordinator, GM Freeze
"It is unfortunate the extent to which certain groups have decided to demagogue the issue and mischaracterise the quality ... and environmental implications of biotechnology."
Susan Schwab, deputy US trade representative
"Consumers, citizens and farmers do not want GMOs, and this ruling will change none of that."
Daniel Mittler, trade campaigner, Greenpeace International
"We would not want this verdict to represent an attempt to undermine the legislative sovereignty of the EU."
Giovanni Alemanno, Italy's agriculture minister