The US on 13 May officially requested consultations with the EU over its continued de facto moratorium on the approval of genetically modified organisms (GMO). Canada has also filed a request while Argentina and Egypt have expressed their intention to follow suit. The countries allege that the moratorium poses an unjustified trade barrier in violation of various WTO Agreements. The European Commission expressed regret at the request, which it described as "legally unwarranted, economically unfounded and politically unhelpful". Civil society groups were also quick to attack the decision, accusing the US to trying to force biotech foods on European consumers.

US denies possible link to FSC case

US Trade Representative Robert Zoellick has requested consultations on the continued de facto moratorium, in place since 1998, and national marketing and import bans on approved products in certain EU member states. In his official request, he alleged that these measures were inconsistent with the Agreements on Sanitary and Phytosanitary Measures (SPS), on Technical Barriers to Trade (TBT) and on Agriculture, as well as the General Agreement on Tariffs and Trade. "The EU's persistent resistance to abiding by its WTO obligations has perpetuated a trade barrier unwarranted by the EC's own scientific analysis," Zoellick noted. "With this case, we are fighting for the interests of American agriculture," added Agriculture Secretary Ann Veneman. The US, Canada, Australia, Argentina and others have repeatedly criticised the EU moratorium in the TBT and SPS Committees as not workable, not enforceable, costly and more trade-restrictive than necessary (see BRIDGES Trade BioRes, 27 June 2002). Australia, Chile, Colombia, El Salvador, Honduras, Mexico, New Zealand, Peru and Uruguay have voiced their intention to join the case as third parties.

Trade sources speculated that the decision to request consultations at this time might be linked to the EU's recent move to seek authorisation in the WTO for retaliation in the Foreign Sales Corporation dispute (see related story, this issue). Zoellick, however, strongly denied the link, insisting that these were "separate tracks" and that the European Trade Commissioner Pascal Lamy shared this view. Regarding the current round of negotiations, WTO Director-General Supachai Panitchpakdi did not believe that the dispute would negatively impact the negotiations, but "would take place along the normal procedural lines". His view was echoed by Canada's Ambassador to the WTO Sergio Marchi and Ambassador Alfredo Chiradia of Argentina. "I don't see this having any impact on the Doha Round because we have had so many disputes in the past that have not prevented us from moving ahead with our business," said Chiradia.

Commission questions motives behind WTO challenge

Lamy, however, has openly questioned the US' "real motive in bringing the case". "The EU's regulatory system for GMO's authorisation is in line with WTO rules: It is clear, transparent and non-discriminatory," he noted. "There is therefore no issue that the WTO needs to examine". David Byrne, European Commissioner for Health and Consumer Protection, stressed the EU's efforts to bring their regulatory system in line with "the latest scientific and international developments," which he said was "essential to restore consumer confidence in GMOs' in Europe". The Commission noted the importance of adequate approval procedures to ensure health and environmental protection, to avoid problems such as those recently experienced in the US, including the StarLink contamination. They also attacked the US for using developing countries' "legitimate concerns" regarding GM food aid against the EU GMO policy, arguing that these countries had the right to set their own level of protection.

The EU de facto moratorium has been in place since October 1998, following calls by Denmark, Greece, France, Italy and Luxembourg for the suspension of new authorisations pending the adoption of rules ensuring labelling and traceability of GMOs and GMO-derived products. Work on labelling and traceability regulations are still underway and the draft regulations have been submitted to the European Parliament for a second reading. At the 4 March Council of Environment Ministers meeting, the Commission announced that GMO approvals were expected to restart later this year, possibly in autumn (see BRIDGES Trade BioRes, 10 March 2003).

Civil society groups outraged

Environmental and consumer groups were quick to attack the US decision. "This may be the moment of truth for the future of GM food in Europe, and future trade relations between the European Union and United States," said Alexandra Wandel of Friends of the Earth Europe. "If this [case] succeeds, the US will force GM foods onto European markets regardless of the wishes of consumers". Lori Wallack, Director of Public Citizen's Global Trade Watch, accused the US administration of undercutting democracy with its challenge, warning that the case "will become Exhibit No. 1 in the growing worldwide attack on the WTO's legitimacy". The concers were echoed by Ben Ayliffe of Greenpeace. "The USA is determined to protect its agricultural export industry in line with its policy of emphasising trade protectionism ahead of the interests of the environment," he said.

Consultations to find a solution at the bilateral level usually take 60 days, after which the US can request the establishment of a WTO panel to assess the dispute (possibly by the end of September). If the panel rules in favour of the US, the EU can appeal the ruling to the WTO Appellate Body, which is required to hand down its decision within three months. The entire dispute settlement process usually takes 12-18 months to complete. Even if the EU were to lift the moratorium while the panel was still considering the case, the US might still ask the panel to reach a final decision on the case "for precedential purposes," according to John Veroneau, General Counsel at the Office of the USTR.

For additional resources and past news, see the ICTSD website.

ICTSD reporting; " U.S. May Continue to Pursue GMO Case At WTO Even if EU Lifts De Facto Import Ban," WTO REPORTER 15 May 2003; "US opens legal proceedings against EU at WTO over moratorium on biotech imports," WTO REPORTER, 14 May 2003; "Moment of truth over GM as US files WTO complaint," FOEE, 13 May 2003; "U.S. and cooperation countries file WTO case against EU moratorium on biotech foods and crops," USTR, 13 May 2003; " European Commission regrets US decision to file WTO case on GMOs as misguided and unnecessary," DG TRADE, 13 May 2003; "Bush administration undercuts democracy by challenging European moratorium on genetically modified organisms," PUBLIC CITIZEN, 13 May 2003; "USA launches trade war with Europe over GM foods," GREENPEACE, 13 May 2003.