Ec 1400 - Biotech Products Briefing

Tarun Singh TF: Stephen Donnelly Briefing on National Bans on Biotech Products Issue: The issue at hand at your upcoming meeting at the World Trade Organization is regarding the national ban on biotech products by Germany, Austria, Luxembourg, France, Italy, Portugal, Norway and Greece. These bans deal in particular with Genetically Modified foods, which the aforementioned countries have deemed to be unfit for trade. The WTO is taking up this issue at the request of the United States who believes that these national bans constitute a violation of WTO regulations. Specifically, the United States is asserting that these bans violate the WTO SPS agreement which states that trade can be restricted when it threatens safety and public health. The US is arguing that these products have been approved by the European Commission and therefore it doesn’t see a legitimate reason for these products to be banned by EU member states. However, these eight countries, claim that there is too much scientific uncertainty regarding the health risks posed by Genetically Modified foods and therefore these products cannot be approved as easily as the United States would like them to be. Relevant Interests: This issue is of great importance to the European Union for two primary reasons: the United States’ desired outcome undermines the sovereignty of the eight EU member states in question and secondly because these products may pose a health risk to the citizens of the European Union. If the United States is able to win this case in front of the WTO then these eight member states will be forced to open up trade of biotech products with the US. This will mean that the United States will benefit economically as a primary source of biotech products, however it will undermine the sovereignty of eight nations by imposing trade policy that is

contrary to their national interests. Secondly, the eight nations mentioned believe there is a great deal of scientific uncertainty regarding biotech products and therefore do not feel that these products would be safe for their citizens to consume. If these concerns turn out to be true, they may pose substantial unforeseen health risks to the countries and may cause these countries to incur economic costs associated with treating such health risks. The ruling will also be important for precedence issues; if the US is able to prove that these bans have been a violation of the SPS agreement, this case would be cited in the future to settle disputes regarding the legality of other trade restrictions. Furthermore, a ruling against these eight countries would be a blow to European Union cohesiveness and may create a lack of trust in the mechanism of the EU as a bargaining and representative body. Considering it has only been five years since the EU was formed and considering that the EU draws its relevance and its bargaining power from the cooperation of member states, such a loss of confidence in the EU would be a critical blow to the effectiveness of the EU. Thus, an extremely important issue for the EU to address as a failure to do so would result in a the undermining of sovereign powers of member states, potential health risks as well as precedence and EU credibility issues. Our Position: Given the interests of the relevant parties, it would be in the best interest of the European Union to adamantly defend the right for the eight countries to impose trade restrictions on biotech products, regardless of whether these products have approved by the European Commission. The EU should defend the legality of these bans under the SPS agreement. Arguing for the bans and their legality will allow the EU to avoid the negative ramifications of a pro-US judgment some of which are outlined above. By making this argument the EU should be able to convince the WTO that the trade restrictions by the eight nations in question are not in

violation of WTO trade agreements and fall under the provisions outlined by the SPS agreement. This will allow the countries to maintain the status quo and would be seen as a victory for the countries and the European Union. Recommended Strategic Approach: It is advisable for the European Union to take a two pronged approach when presenting this issue to the WTO panel: the first prong should cover the relevant legal arguments found in the SPS and other WTO agreement, and the second prong should address the precedence for such cases and the precedence that will be sent by the decision reached in this case. This approach will be able to best address the primary concerns of the panel. The main premise of the legal argument being presented by the United States is that the national bans on biotech foods are in violation of WTO agreements; specifically the SPS agreement and whether the bans fall outside the SPS’ delineated rubric of what constitutes a safety and public health risk. It ought to be noted that the European Union believes that the SPS allows for such bans under Article 3.3 of the SPS. Article 3.3 states: “Members may introduce or maintain sanitary or phytosanitary measures which result in a higher level of sanitary or phytosanitary protection than would be achieved by measures based on the relevant international standards…” When the eight countries in question chose to ban European Commission approved biotech products from their countries they did so because they believe that the current level of scientific evidence does not meet their nations’ sanitary/health measures. Furthermore, Article 5.7 states “In cases where relevant scientific evidence is insufficient, a Member may provisionally  adopt sanitary or phytosanitary measures on the basis of available pertinent information,  including that from the relevant international organizations as well as from sanitary or  phytosanitary measures applied by other Members. In such circumstances, Members shall  seek to obtain the additional information necessary for a more objective assessment of 

risk and review the sanitary or phytosanitary measure accordingly within a reasonable  period of time.”  The only requirement posed by Article 5.7 is that members shall seek to obtain more  information, Article 5.7 says that members may use information obtained by other members and  organizations but does not make this a requirement. Therefore, these countries are under no  obligation to accept the European Commission’s findings regarding biotech products, and there is  no evidence to suggest that these countries are not pursuing further research into the  environmental and health risks of biotech products. Finally, the last legal argument propelling the  case for these countries is that the definition of “environment” present in SPS is too vague and  therefore the SPS is incapable of providing a way to measure environmental risk. The European  Union believes that the WTO ought to look at other international agreements to better determine  the definition of “environment” and definitions under agreements such as the Cartagena Protocol  would allow for the bans imposed by the eight nations. There are two primary cases that the WTO can turn to help determine the outcome of this  case. One such case was decided upon in 1998, the US­EU Beef Hormones case. In that case the  WTO ruled in against the EU which had banned beef imports from the US containing 6 beef  hormones despite them having been determined safe for consumption in the US. The reason why  this case is not relevant to our discussion is because in this case the EU stated that scientific  evidence was not as important as environmental and consumer concerns. However, the eight  countries in question are not denying the importance of scientific evidence; rather they are stating 

that they would like to have more scientific evidence present before allowing such imports. This  desire for greater evidence is based on reasonable concerns which have emerged as a result of  biotech companies bribing politicians as was the case with Monsanto in Europe. Secondly, in the  Japan Apple Case, Japan blocked imports on US grown apples over concerns of pest related  disease, particularly fire flight. However, the US made significant efforts to prevent the apples  from being infested with fire flight by changing how the apples were planted and stored. Japan  continued to ban imports of US apples which eventually led to the WTO ruling in favor of the  US, stating Japan’s ban was illegal. However, the case of biotech products is quite different: in  the Japan Apple Case, it was made clear as to what the threat to the apples was and it was known  what measures could be taken to address the problem, however in the case of biotech products  there is scientific uncertainty as to what potential risks these products present. Therefore these  eight countries are basing their bans on the unknown risks while the Japanese ban was based on  known risks. Finally, the panel should rest assured that ruling in favor of the EU will not change the  status quo of trade and as soon as these countries feel safe about biotech products trade would  increase, thereby increasing economics gains from trade. However, ruling against the EU could  provide undermine the EU structure and therefore create further barriers to trade. As for  precedents that will be set by this case, the WTO will set a precedence of upholding 

environmental and health concerns and would uphold Articles 3.2 and 5.7 of SPS by ruling in  favor of the European Union. For the reasons stated above, we, the European Union, find it to be in the best interest of  the WTO to rule in favor of the eight countries in question.