EU, GMO, trade, Agribusiness, Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety, International Relations/Trade,

Kerr, William A.

Viju, Crina

Yeung, May T.

English

Research Papers in Economics

 
 
 
 
POST-MORATORIUM EU REGULATION 
OF GENERICALLY MODIFIED 
PRODUCTS:  TRADE CONCERNS  
 
CATPRN Trade Policy Brief 2011-07 
October 2011 
 
 
Crina Viju 
Institute of European, Russian and Eurasian Studies 
Carleton University 
 
May T. Yeung 
Estey Centre for Law and Economics in International Trade 
 
William A. Kerr 
Department of Bioresource Policy, Business and Economics 
University of Saskatchewan 
 
 
http://www.catrade.org 
Trade Policy Briefs are short summaries of studies funded by the CATPRN. As such, the briefs omit many of 
the  details  and  most  of  the  references  contained  in  the  longer  reports.  This  brief  is  based  on  CATPRN 
Commissioned Paper 2010-02. Funding for this project was provided by the Canadian Agricultural Trade 
Policy and Competitiveness Research Network which is funded by Agriculture and Agri-Food Canada. The 
views expressed in this brief are those of the authors and should not be attributed to the funding agencies. 
  
1 
 
International  trade  in  agricultural  products  produced  using  biotechnology  is  a  very 
divisive  trade  policy  issue.  In  some  countries,  and  particularly  the  European  Union  (EU), 
politicians have been faced with vociferous opposition from segments of civil society to the 
presence of genetically modified (GM) organisms and products in their natural environments and 
markets. This has made policy-making for these products very difficult. In other countries such 
as the US and Canada, biotechnology has proved less contentious and the approval of new GM 
products, while rigorous, has proceeded in an orderly fashion. Thus, GM-crops have been grown 
extensively in Canada, the US and a number of other countries, while in the EU, approval of 
GM-crops stalled for more than a decade. Without EU approval, GM products cannot enter the 
EU  customs  territory.  The  lack  of  EU  approvals  has  been  a  de  facto  ban  on  imports  of 
biotechnology products and is seen as a major impediment to agricultural trade by countries 
having GM products available for export. 
 
The current set of multilateral trade rules were negotiated in the Uruguay Round which 
ended in 1994, prior to the commercialization of GM-crops and, hence, preceding their becoming 
a major political issue in the EU. The rules of trade covering the types of barriers used by the EU 
to exclude GM products are embedded in the World Trade Organization‟s (WTO) Agreement on 
the Application of Sanitary and Phytosanitary Measures (SPS). In the SPS, all Member States of 
the WTO, including the EU, agreed that such barriers could only be justified on a scientific basis. 
Given the subsequent domestic political difficulties over the issue of biotechnology, the EU has 
chafed over the use of science as a decision criterion and has put forth its own interpretation of 
the roles of science in trade commitments. These interpretations differ in significant ways from 
that of GM producing countries and the issue became one for a WTO disputes Panel to sort out. 
 
In 2003 Canada and the US initiated a case at the WTO against a 1999 EU temporary 
moratorium on imports of GM products. Meanwhile, a new EU regulatory framework for GM 
approvals  was  put  in  place  in  2003.  The  WTO  dispute  pertaining  only  to  the  moratorium 
continued,  with  the  Panel‟s  decision  coming  down  in  September  2006.  The  WTO  Panel 
supported the complainants. The EU said it would comply with the WTO Panel but requested 
extended time to do so. The new EU regulatory regime of 2003 is now in place and accepting 
applications for the approval of GM-products. The first product to successfully work its way 
through  the  revised  EU-level  approval  process  –  BASF‟s  Amylopectin  („Amflora‟)  potato  – 
received its approval on March 15, 2010 based on an application made in February 2005. Thus, 
only now can the EU‟s GM regulatory regime be assessed. Canada and other countries have a 
clear interest in whether the new EU GM regulatory regime is compliant with the SPS and with 
the Panel ruling of 2006. Based on the procedures outlined in EU Commission Directives, the 
new  decision  criteria  appear  not  to  comply  with  the  EU‟s  WTO  commitments  and  are 
sufficiently cumbersome that they may not be the „least trade restricting‟ means of achieving the 
official policy objectives. 
 
The SPS Agreement recognizes that countries have an inalienable right to protect human, 
animal and plant life or health (Isaac, 2007). Hence, if a legitimate justification exists, WTO 
Member States may put trade barriers in place. The question that the SPS attempts to establish is 
what constitutes a legitimate justification. According to the SPS, unilateral (i.e. those not having  
2 
 
been developed by an international scientific organization
1) SPS  measures must be „based on 
scientific principles‟ and cannot be maintained „without sufficient scientific evidence‟ unless it is 
a temporary measure put in place until sufficient evidence is acquired (SPS Agreement, Article 
2.2).  According  to  Isaac  (2007,  p.  385),  “The  science-based  measures  adopted  must  be 
proportional to the risk that is being targeted.”   
 
The EU‟s 2003 domestic regulatory regime is extremely complex comprising at least 3 
Directives and 9 Regulations as well as Recommendations. The procedures set out have not been 
fully clarified because only a limited number of the potential approval/rejection paths have been 
called upon. Further, the regulatory regime now used by the European Commission remains 
contentious among some EU countries and it appears that final approval for the use of GM 
organisms may devolve to the individual countries. Given that the European Commission, not 
individual countries, represents the EU at the WTO a number of potential trade law issues are 
raised. 
 
Cutting through the complexity of EU decision making, the approval procedures at the 
EU level do not make science the final arbitrator in decisions. There is a scientific body that 
reviews GM applications. The European Food Safety Authority (EFSA) has jurisdiction over the 
scientific assessment of GMO authorization applications.  Its GMO Panel reviews each GMO 
authorization application on a case by case basis as no GMO is presumed to be safe. The GMO 
Panel consists of 21 independent experts supported by a number of specialized Working Groups 
drawing on a pool of more than 40 external experts in fields such as allergenicity, ecology, 
microbiology, toxicology, plant physiology and molecular genetics. The EFSA can refuse to 
approve an application to allow a new GM product on a scientific basis. 
 
The problem arises, however, in the instance where the EFSA recommends approval on 
the basis of its scientific assessment. At this point, the approval moves into the political arena 
and a scientifically acceptable GM product can be denied approval for non-scientific reasons. 
This runs directly counter to the interpretation of the SPS rules that is taken by Canada and the 
US and suggests that the EU may also not be in compliance with the Panel ruling in 2006. Thus, 
the “new” EU regulatory regime would seem open to a WTO disputes challenge. Of course, the 
political consequences of such a challenge would have to be carefully weighed. 
 
 
References 
 
 Isaac, G.E. 2007. “Sanitary and Phytosanitary Issues.” In W.A. Kerr and J.D. Gaisford, eds. 
Handbook on International Trade Policy. Cheltenham: Edward Elgar. 383-393.  
       
 
   
                                                 
1 There are three organizations that establish international SPS standards that are recognized by the WTO; the Codex 
Alimentarius Commission for human health, the World Organization for Animal Health (OIE) for animal health and 
the International Plant Protection Convention (IPPC) for plants health (SPS Agreement, Article 5.1).   

Post-Moratorium EU Regulation of Generically Modified Products: Trade Concerns

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