Environmental Engineering Reference
In-Depth Information
3. The WTO dispute on GMOs
To put the GMO dispute in perspective: WTO trade disputes are extremely rare events.
Only around 2 percent of all pairs of WTO member countries (country dyads per year)
ever get involved in a WTO trade dispute (Sattler and Bernauer, 2007). Of the 300+ WTO
trade disputes since 1995, less than 10 percent concern environment, health and safety
issues (Bernauer and Sattler, 2006).
The principal reasons why the USA has opted for escalation in the transatlantic dis-
agreement on GMO policy are primarly the following (Bernauer, 2003). First, economic
losses due to the EU's GMO restrictions (estimated to be in the order of several hundred
million US dollars p.a.) are relatively large and concentrated on politically in
fl
uential eco-
nomic actors in the USA (chie
y large, export-oriented farmers and the biotech indus-
try). Also, the US government has worried that other countries that are important export
destinations for US agricultural products will follow the EU policy model for GMOs.
Second, non-coercive policy measures for solving the problem are di
fl
cult or impossible
to implement. Mutual recognition is unacceptable to the EU and the USA because it
would undermine the legitimacy of both sides' respective policy. Compensation would
founder on political legitimacy and
fi
nancial grounds. All international harmonization
e
orts are deadlocked for the same reasons that have led to regulatory polarization. The
same holds true for unilateral regulatory adjustment in the USA, which has helped to mit-
igate trade tensions but cannot, by itself, solve the problem. Third, the USA assumed that
it would win the case. It also anticipated that the EU would make concessions before a
WTO verdict or after a 'guilty' verdict, and that other important export destinations for
US agricultural goods would thus be deterred from enacting EU-style policies for GMOs.
As noted in the introduction, the US-led plainti
ff
s won the case. The de facto conse-
quences of the verdict remain open. The EU had initiated reforms of its approval process
even before the USA lauched the trade dispute. These reforms were completed in 2004 and
were meant to end the informal moratorium on approvals of new GM crops (1998-2003).
With reference to the EU Commission's position, the WTO verdict is largely running into
an open door. The Commission is relatively biotech-friendly and has for the past several
years tried to emphasize risk-assessment criteria over political considerations in the
approval process, without much success. However, the main problem lies in implementing
the EU's revised legislation under conditions of adverse public attitudes toward GMOs
and strong resistance of several EU member countries to lifting their unilateral bans on
GM crops (six countries at the time of the WTO verdict).
In late 2007 the EU Commission proposed that the unilateral bans must be lifted, but
the Council of Ministers failed to support this proposal. Only Italy has lifted its ban.
Whether the former or the latter body of the EU will prevail, or whether the issue will be
taken to the European Court of Justice, remains open. It is also unclear whether new risk
assessments undertaken by EU member states that have put in place unilateral bans would
make those bans compatible with the SPS Agreement and resolve the WTO dispute. The
principal charge in the WTO ruling was that those unilateral bans were not backed up by
country-speci
ff
c risk assessment, and were not supported by risk assessments carried out
at the EU level (the EU has been in favor of approving the respective GM crops) (Arcuri,
2007; Poli, 2007).
In any event, the EU experiences great di
fi
culties in implementing its own GMO reg-
ulations and, by implication, also the WTO verdict. The approval process is unlikely to
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