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paper was researched and written to fulfill the M.A. project requirement
for completing the Monterey Institute of International Studies’ Master
of Arts in Commercial Diplomacy. It was not commissioned by any
government or other organization. The views and analysis presented are
those of the student alone.
more information about the Commercial Diplomacy program and the M.A.
project requirement, please visit www.commercialdiplomacy.org.
Directive 90/220/EEC on the deliberate release into the
environment of genetically modified organisms and Commission
the purpose of this project, I fictitiously assume the role of policy
advisor to Mr. David Byrne, EU Commissioner for Health and Consumer
Protection (Directorate-General 24).
first portion of the project includes a background section and several
short analytical papers that examine the political, commercial, and
legal aspects of the U.S.-EU dispute over GM products.
The second half of the project provides a recommendation and
strategy for addressing the U.S.-EU dispute over trade in GMOs.
June 1999, the EU Council of Ministers decided to impose tougher, highly
burdensome risk assessment requirements on all products that contain
genetically modified organisms (GMOs)—requirements such as
comprehensive labelling, thorough monitoring of products once they have
been put on the market, and renewed approvals for all products after
they have been on the market for 10 years. The practical effect of the
regulations is that of a moratorium on the import of GMOs.
the world’s largest producer and exporter of GMOs, the U.S. is very
concerned about the long-term effects of this de
facto moratorium. The
U.S. agricultural industry has argued that the EU’s restrictive policy
on biotechnology products is nothing but an attempt to protect its own
agricultural industry. Already,
the EU’s ban on GMOs is said to be costing U.S. corn farmers some $200
million annually in lost sales, and the U.S. has threatened to take the
EU before the WTO dispute settlement body if the issue is not soon
“genetically modified organism, " or GMO, is a living organism, the
genetic material of which has been permanently altered through gene
technology (i.e., altered in a way that does not occur naturally by
multiplication and/or natural recombination).
its introduction to the market in 1992, genetically engineered material
has become a common ingredient in many foods sold and produced in the
U.S. However, because
growing and marketing GM food products are largely unregulated
activities in the U.S., most Americans have not, until recently, been
aware of GMOs and, until recently, there has been little or no U.S.
opposition to the sale of such products without special labels.
In the EU, on the other hand,
public protests against GMOs have been loud, powerful, and sometimes
even violent, and EU officials have responded by imposing strict risk
assessment requirements on GM products. However, because not enough
scientific tests have been conducted to prove that GMOs are indeed
harmful to human, animal and/or environmental health, the EU has relied
heavily on the "precautionary principle " to defend these
regulations. It is this "safety first " approach to GMO
regulation, as well as the EU’s failure to establish a transparent
and timely regulatory system, that the U.S. has threatened to challenge
within the WTO.
to the Biosafety Protocol to the Convention on Biological Diversity
(which was finalized in Montreal earlier this year), issues surrounding
the release of GMOs into the environment (e.g., seed plantings) have
already found a forum.
In order to ensure that European consumers retain their choice as to whether or not to consume GM food products, however, the European Commission should seek an agreement with the U.S. concerning mandatory labelling requirements and use of the precautionary principle.
electronic data protection, beef, bananas"the EU and the U.S.
have been caught up in a near-record number of trade disputes in recent
months. These disputes, however, would likely all fade into triviality
if a transatlantic trade war were to erupt over the issue of agricultural
products that are derived from or contain genetically modified organisms
European consumers have vehemently opposed the unregulated release of
GMOs into EU markets, and in response, EU legislators have taken actions
that effectively ban the import of goods made with genetically modified
ingredients. The result has been a major disruption in U.S.-EU
agricultural trade flows that, in June last year, prompted the U.S.
government to threaten to challenge the current EU regulations within
the WTO. The specific areas of contention include the EU’s:
U.S. biotechnology industry, as well as the U.S. government, has charged
that the EU’s product approval process for GM products is subjected
to delays due to political considerations rather than only legitimate
health or safety concerns. In the words of U.S. Trade Representative
Charlene Barshefsky, the EU’s procedures for approving GMOs involve
a "highly politicized, opaque regulatory process " that
has fostered "consumer fear about food safety. "
Concerns Over Food Safety
the American public’s response to GMOs has been relatively subdued,
the European response has been extremely emotional. Many Europeans
are strongly opposed to any kind of genetic tampering, and a recent
survey revealed that only half of all Europeans find it morally acceptable
to apply biotechnology to food.
Europe’s recent string of health scares due to food contaminants (e.g.
mad cow disease and dioxin contamination) has only helped further
heighten concerns over food safety. And widespread, even violent protests
against "Frankenstein Foods " have ensured that the GMO
issue gets media and public attention.
EU’s Regulatory Regime for GM Products
current EU legislation, a genetically modified food can only be placed
on the market after it has been scientifically evaluated in accordance
with the latest scientific knowledge and found to be safe for human
health and the environment.
In cases where the scientific evidence is insufficient, inconclusive,
or uncertain, protective measures are adopted on the basis of the
"precautionary principle, " which is found in Article 5.7
of the WTO Agreement on Sanitary and Phytosanitary Measures.
EU has also imposed labeling requirements on GM foods—a position that
EU Commissioner for Health and Consumer Protection David Byrne recently
reaffirmed stating that the right to information is "key"
to the development of a civil responsibility. "
Europeans have consistently called for clear, unambiguous labeling—not
so much for safety reasons, but in order to enable consumers to make
EU has also taken action to ensure that international trade rules
support their position on GMOs. The European Commission recently issued
a communication that seeks to better define the precautionary principle
and to clarify the conditions for its use by answering when and how it
should be applied to protect the public—a
move the U.S. industry fears would reopen and possibly weaken the SPS
Agreement. In negotiating the Biosafety Protocol, the EU succeeded in
establishing 1) mandatory labelling requirements for all living modified
organisms meant for release into the environment and 2) the
precautionary principle as a legitimate basis for a country’s decision
to refuse to accept imports of such organisms.
Importance of GMO’s within the U.S. Economy
an export value of more than $50 billion yearly, agricultural products
represent a crucially important sector of the U.S. economy, and GM crops
play a large role within the sector—they currently make up almost 40%
of all corn, 45% of all soybeans, and 50% of all cotton produced in the
U.S. It has been estimated that U.S. corn producers alone are losing
some $200 million/year in corn exports due to the EU’s refusal to
permit imports of genetically modified corn.
modification entails the permanent alteration of a species’ genetic
code (DNA) through laboratory methods that cannot be duplicated by way
of natural reproductive means. So
far, this process has been applied, primarily, to agricultural crops to
improve their resistance to disease, pesticides, and herbicides, to
enhance nutritional content, and to increase yields.
Corn, soybeans, cotton, and potatoes are among the bio-engineered
products that are already on the market. More extreme examples of
current transgenic research include the transfer of certain fish genes
into strawberries and tomatoes to make them frost-resistant, and the
development of fruits and vegetables that are able to produce their own
pesticides at the appropriate time of the growing cycle.
far, more than 4,500 genetically modified plants have been tested, and
the U.S. Department of Agriculture (USDA) has approved 50 varieties of
crops that have been engineered to resist insects, herbicides, or plant
viruses, including 13 kinds of corn, 11 types of tomatoes, and 4
varieties of soybeans.
Genetically modified crops account for almost 40% of all corn
currently produced in the U.S., 45% of all soybeans, and 50% of all
cotton. Together these represent more than three-fourths of all
genetically modified crops in the world.
biotechnology researchers see genetic engineering technologies as a
major scientific advancement. They,
along with many agricultural producers, point to the potential of GMOs
to revolutionize current methods of food production and to help preserve
the world’s natural resources. Officials
at the United Nations World Food Program have estimated that up to 40%
of the world’s crops are destroyed by pests or other environmental
circumstances prior to harvest.
GMOs offer the promise of substantially improving crop yields.
large biotechnology companies such as the U.S.-based companies Monsanto
and Dupont, and the Swiss-based company Novartis, the rapid increase in
the development of GM technology has signaled the beginning of a new and
tremendously profitable era. Sales
of GM seeds have risen in value from $75 million in 1995 to $1.5 billion
in 1998, and the crops they produce are by now commonly found in a
variety of different foods ranging from chips, beer, and milkshakes to
breakfast cereals, muffin mixes, and infant soy formulas.
because few scientific studies have been conducted, there is not yet
proof that genetically engineered foods are either safe or harmful
for human consumption, and this has left many consumer groups highly
concerned about GM foods’ potential to cause harm"either to the
environment or to those who consume the foods. There is concern that
GM foods could produce unknown allergens, increased levels of naturally
occurring toxic substances, or decreased levels of nutrition. Certain
religious groups are further worried about the possibility that genes
from foods they are forbidden to eat might be spliced into fruits
and vegetables. There is also great concern over the ethical ramifications
of large-scale bio-engineering, particularly in Europe where the memory
of Nazi abuse of science during World War II has left many people
terrified of any kind of genetic manipulation—even in plants.
Policy & Opinion on GM Foods
the United States, growing and marketing GM foods are largely
unregulated activities. A company that wants to grow a bio-engineered
product need only 1) report its intent to raise a GM crop to the USDA;
2) provide an assurance that the product is safe; and 3) report any
problems or negative research results in connection with the product in
question. Since the U.S.
government considers GM components in foods as mere additives, the Food
and Drug Administration is not required to approve them prior to sale to
consumers. Moreover, labels are not required to indicate whether a food
contains GM materials because U.S. policy only requires labels to
indicate ingredients that change the nutritional content of a food or
could cause allergies.
large biotechnology companies have argued that any change in U.S. policy
would be extremely costly and harmful to the profitability of U.S. grain
growers. Under current production methods, they assert, segregation of
genetically modified and conventional, identity-preserved, crops is
almost impossible. Accordingly, many within the U.S. agricultural
industry have insisted on promptly resolving the U.S.-EU dispute based
on scientific principles as stipulated by the WTO Agreement on Sanitary
and Phytosanitary Measures (SPS Agreement).
This would mean taking the EU before the WTO dispute settlement
body rather than attempting to resolve the problem through bilateral
U.S. companies, however, have become concerned that customers may be
switching away from products that may contain GMOs (such as corn and
soybeans) to products that have not been genetically altered (e.g.
peas and tapioca), and these companies have voluntarily changed their
policies on GMOs. Archer Daniels Midland Company, for example, has
recommended that its suppliers develop ways to segregate conventional
from modified grains in order to meet increased foreign demand for
the National Corn Growers Association and other producer groups have
strongly criticized ADM’s position (and ADM has subsequently softened
its stance), recent comments by U.S. Secretary of Agriculture Dan
Glickman indicate that U.S. policy towards GM foods could be following
ADM’s lead and bending to consumer pressure. In July 1999, Glickman
told U.S. producers that they may have to consider labeling in order to
ensure access to foreign markets that require complete disclosure of GM
for Congress, some senators and representatives have actively lobbied
the U.S. Administration to push the EU to, at the very least, complete
the regulatory process for corn and soy products that have already
passed the EU’s scientific review process and are due for approval.
Other members, however, has introduced mandatory labelling
Policy & Opinion on GM Foods
a common EU position concerning the cultivation and use of GMOs has been
difficult, largely because food safety is an area in which individual
nation-states continue to fiercely guard their right to regulate.
Nonetheless, public opposition to “Frankenstein foods " has been
mounting for more than two years, especially in France and Britain.
Farmers who have agreed to participate in government-run test plantings
of GM seeds have seen their fields invaded and destroyed, and on August
12, 1999, a McDonald’s restaurant in Millau, France, was ransacked.
Several major political parties and prominent citizens, including
Paul McCartney and Prince Charles, have aligned themselves with
environmental advocacy groups that strongly oppose GMOs.
In short, national governments in the EU have come under tremendous pressure to impose tight restrictions on GM products, and accordingly, the EU began in 1998 to require foods to be labelled if they contain protein or DNA as a result of genetic modification. EU member states are also required to regulate the release of GMOs into the environment in order to minimize their potentially harmful effects. (So far, only 18 GMOs have been authorized for experimental growth in the EU since 1990, and in the past two years, each of the four new applications were rejected.[15) Moreover, in response to demands by France, Greece, Austria, Denmark, and Luxembourg, the EU recently established what amounts to a de facto moratorium on new GMO approvals until 2002; the EU has imposed regulations that involve tougher risk assessments, more comprehensive labelling and monitoring of products once they are on the market, and re-approval of GM foods after they have been on the market for 10 years.
Individual EU countries have also taken action to contain GMOs. In Britain, Prime Minister Tony Blair, a strong proponent of GM foods himself, has yielded to public pressure, and food
“Barshefsky Says Biotech Problems Require Bilateral, WTO
Approach. " Inside U.S. Trade. Vol. 17,
42, October 22, 1999.
Speech by Mr. David Byrne, European Commissioner for Health and
Consumer Protection to the Conference on “Biotechnology –
Science and Impact, " delivered in The Hague on January 21, 2000.
(January 25, 2000).
Though this agreement does not cover agricultural products intended
for consumption or processing, it does require exporters to obtain
pre-shipment permission from the importing country for shipments of
living GMOs meant for planting or “commercial use. "
Alan Larson, “Biotechnology: Finding a Practical Approach to a
Promising Technology. " Economic Perspectives.
Vol. 4, No. 4, October 1999, p. 6.
Jeffrey Kluger, “Bad Seeds. " Time Magazine.
International edition, Vol. 154, No. 12, September 20, 1999.
“Bucking U.S. Trend, Europe Blocks Gene-Altered Food. " The
New York Times.
Specter (see note 8) quotes ethicist Arthur Caplan of the University
of Pennsylvania as stating that "the shadow of the Holocaust
is dense and incredibly powerful still.
It leaves Europe terrified about the abuse of genetics.
To them the potential to abuse genetics is no theory.
It is a historical fact."
"Japan, EU Demands for Non-GMO Crops Reverberates in U.S. "
Inside U.S. Trade.
Vol 17, No. 37,
Anita Manning, “Altered Food Might Mutate Trade. " USA Today.
July 14, 1999.
“Congress Weighs in With Issues for Visit by EU Commission. " Inside
Vol. 17, No. 43, October 29, 1999.
The 1998 labeling requirement is found in Regulation (EC) No 258/97
(Novel Foods Regulation) and Regulation (EC) No 1139/98. On October
21, 1999, this requirement was modified so that only foods containing
more than 1% genetically modified ingredients now need to be labeled
Stephen Bates, "Tougher EU Controls Mean Moratorium on GM Crops. "
The Guardian, June 26, 1999, p. 8.
Ibid. The de facto ban was
established following a meeting of the EU’s environment ministers in
Brussels on June 25, 1999.
 Ibid, p. 8.