Herbert Smith reviews developments on the world stage as a trade war looms between the US and EU.
Last week, the US raised the stakes in the stand-off with the EU over the moratorium on commercialisation of authorised GMOs or further approval of other GMOs. US trade representative, Robert Zoellick, announced that he is in favour of the US challenging the EU's moratorium by bringing proceedings before the WTO. The EU trade Commissioner, Pascal Lamy, promised to defend any action vigorously.
In practice, the US is increasingly concerned about the block on potentially lucrative US exports of GM foods to the European markets. EU policy on GMOs is viewed as being guided by agricultural protectionism and an increasingly sceptical public, rather than objective scientific evaluation. The US is further frustrated by the refusal by developing African nations to accept food aid from the US, consisting of GM corn, for fear of prejudicing future exports of their produce to EU markets.
If proceedings are brought before the WTO, the outcome will be of fundamental importance for the agribio industry in Europe and worldwide. If the EU were to win such a case, then this would greatly strengthen the hand of opponents to progress of GM technology. The impact would be felt globally.
The WTO Rules
The WTO Rules allow a WTO member (like the US) to bring proceedings before the WTO dispute settlement body claiming that the EU's position on GMOs constitutes an unjustified technical barrier to trade. The EU would no doubt contend that the semi-official moratorium on further commercialisation of GMOs in place in Europe at present is either: (1) voluntary by industry and, therefore, not a trade barrier imposed by the EU; or (2) a legitimate sanitary or phytosanitary measure. However, the WTO Rules require that any sanitary or phytosanitary measure: (1) is taken only to the extent necessary to protect human, animal or plant life or health; (2) is based on scientific principles; and (3) is not maintained without sufficient scientific evidence. Provisional measures may go beyond this, but only for a "reasonable period of time" during which the WTO member concerned must obtain more information to make an objective assessment of the likely risk.
The EU, in its defence, would likely need to justify adoption of the semi-official moratorium on scientific grounds. For example, in January 1998, the WTO's Appellate Body found that the EU's import ban on US meat from cattle...