Genetically Modified Organisms and International Trade
 
April 9, 2002
 

The regulation of genetically modified organisms (GMOs), either already in force or being considered is a hot topic in the European Union and countries such as Algeria, Thailand, China and New Zealand. In January 2000, 133 nations added an international layer to the debate by adopting the Cartagena Protocol on Biosafety. Once the Protocol enters into force, it will give signatories the right to block the import of certain GMOs. However, the universe of products covered is relatively limited - a country may only ban the import of GMOs, such as potato, corn and tomato seeds, intended for direct introduction into the environment. The Protocol did not alter the treatment of GMOs intended for other uses, such as food for humans, feed for animals or processing.

Under the Protocol, 133 countries agreed to establish an Advanced Informed Agreement mechanism, under which the government of the exporting company notifies the importing country's government of its intention to export a covered GMO. The importing government then decides whether to accept or reject future shipments of the product.

Most controversially, the Protocol specifically allows countries to cite the "Precautionary Approach" when making import decisions. This acknowledges that parties may err on the side of caution to ban imports, even if they lack scientific certainty about the GMO's potentially adverse health or environmental effects. However, the Precautionary Approach arguably conflicts with nations' obligations under Article XI of the General Agreement on Tariffs and Trade (GATT), which prohibits quotas. By arguing that a Protocol-sanctioned ban is the equivalent of a quota with the amount "set" at zero, an exporting country could argue that the ban is inconsistent with the GATT and must be changed.

It is unclear whether the GATT and World Trade Organization (WTO) rules conflict with a Protocol-sanctioned ban. The WTO cannot ignore the fact that the Protocol is the product of a 133-nation international environmental negotiation. Given the Seattle debacle several years ago, WTO members may wish to negotiate and permit the Protocol's bans because the Protocol represents international consensus on the issue. Indeed, the European Union lobbied at the recent WTO meeting in Doha, Qatar, to have the relationship between the Protocol and WTO rules clarified during the next round of trade talks.

If negotiations do not resolve the issue in time, another way would be for a WTO dispute resolution body to harmonize, on a case-by-case basis, an exception found in the GATT for measures taken to protect health and the environment (Article XX(b)) with the Protocol. However, harmonizing WTO rules and the Protocol could prove complicated. In the 1998 Beef Hormones case¹, the WTO signaled that it would not allow the European Community to ban U.S. beef imports without a bona fide risk assessment based on sound scientific evidence. If a country were to conduct a GMO risk assessment, and invoke the Precautionary Approach to ban without scientific certainty, it is unclear how the WTO would respond. If it wishes to retain the rule established in Beef Hormones, the WTO may face the difficult task of telling a country that it must remove its Protocol-sanctioned ban.

Some have suggested that a 2001 WTO decision affirmed use of the Precautionary Approach in an opinion concerning a French ban on chrysotile asbestos imports. In that dispute, European Communities - Measures Affecting Asbestos and Asbestos-Containing Products², Canada challenged the scientific basis for the ban, but the Appellate Body affirmed the lower panel's finding, noting "all four of the scientific experts consulted by the panel concurred that chrysotile asbestos fibres, and chrysotile-cement products, constitute a risk to human health . . . the carcinogenic nature of chrysotile asbestos fibres has been acknowledged since 1977 by international bodies, such as the International Agency for Research on Cancer and the World Health Organization." As such, it seems that Measures Affecting Asbestos and Asbestos-Containing Products adds little to the GMO debate, because science has documented and reached consensus on the toxicity of asbestos long ago. This level of certainty has not been reached for GMOs.

Conclusion

Although the outcome is by no means clear, it seems unlikely that the WTO would, if confronted with a Protocol-sanctioned trade ban in a dispute resolution case, choose to overrule the ban. The WTO is not immune to international political sentiment, and it would have difficulty telling 133 nations that their consensus is not sufficient to withstand scrutiny under the GATT. It remains to be seen whether nations will negotiate a compromise before the WTO is forced to act on its own.

For more information, contact Brett Grosko at 888-688-8500 or via e-mail at brgrosko@hklaw.com.

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1. WTO Appellate Body Report on EC Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R, WT/DS48/AB/R (Jan. 16, 1998).

2. European Communities - Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/AB/R (Mar. 2, 2001).