Trade: the principal dispute

As suggested above, trade creates the basic incentive structure around which issues of regulation at the national level are now forcing global conformity. This is because food and farm commodities are so heavily traded across borders that an economic imperative exists to harmonize minimum regulatory standards across those same borders. If heavy importing countries such as those in Europe create prohibitory national-level GMO regulations, they will inhibit production of these crops in export countries, an outcome that is favourable to the importers. Regardless of harmonization among other countries’ national regulations, if a major import market, such as Europe, is closed to GM products because of labelling or cultural barriers, the result will be a common global practice of aversion to GM products, as producers and research firms respond to the calculations of strategies that offer a profitable opportunity. Thus EU biosafety and food safety regulations, with strong labelling and tracing requirements, affect the calculus of the majority of those who would adopt or promote GM seeds and crops. In the case of GM foods and commodities, the principal dispute in regulation has arisen since the late 1990s between the emerging EU standard of strict labelling and traceability (L&T) for any GM product, which requires costly market segregation, and the permissive path adopted in the USA, based on the more traditional standard requiring a scientific demonstration of risk, avoiding costly mandatory segregation for otherwise like commodities.

The critical issue holding up GM crop technology today is how national governments, such as the EU and Japan will be ‘permitted’ either to block imports of GM commodities and foods at their border, or require stigmatizing labels on imported GM commodities and foods. The EU answer is an approach to risk assessment based on a ‘precautionary principle’. The EU Commission, acting under the authority of a February 2000 ‘Communication from the Commission’ that was subsequently supported by both the Council and the European Parliament, has been working in as many settings as possible to advance this approach. While inserting this more sweeping approach into the EU’s own newly established general food law, the Commission is also pushing for an incorporation of this principle more broadly: within a revised Codex risk analysis framework, within hoped-for revisions of the Sanitary and Phyto-sanitary (SPS) and Technical Barriers to Trade (TBT) Agreements of the WTO, within the work of the Organization for Economic Co-operation and Development (OECD), and (less successfully) in discussions with the USA within the Transatlantic Economic Partnership (Coleman, 2002).

The US approach, requiring scientific evidence of risk, became politically unacceptable in the EU following the 1996 bovine spongiform encephalopathy (BSE – ‘mad cow disease’) crisis. Having learned not to trust EU authorities on the safety of BSE meat, consumers began to mistrust authorities on GM products as well. The US mad cow scare in January 2004 suggests that the general risk adversion in the USA will also grow. Consumer confidence falls when a new technology comes under attack from a variety of anti-corporate and anti-globalization European NGO activist groups such as Greenpeace. In response to such scares, EU food consumers, in the last decade, began shopping around for non-GM sources of supply, giving an advantage to farmers and retailers who produced non-GM products. These concerns led separate EU governments, and then finally EU authorities in Brussels, to place an informal moratorium on the approval of any new GM crops for commercial production and consumption, pending the development of a more ‘precautionary’ regulatory environment.

This informal 1998 moratorium on new GM crop approvals in the EU has continued to the present day. There are now a dozen or more new GM crop varieties stuck in the approval pipeline; all have been successfully screened by the EU Scientific Committee on Plants but they have not been approved for commercial release. Hoping that reluctant EU governments might consent to restart the approvals if tighter labelling rules were in effect, the EU Commission in July 2001 proposed ambitious new regulations concerning ‘traceability and labeling of genetically modified organisms and traceability of food and feed products produced from GMOs’ (Commission of the European Communities, 2001). The USA opposed this move because, while the moratorium has led to loss of some bulk shipments to Europe, the new regulatory proposals threaten to be less temporary, and to create heavy costs on US producers if they wish to sell to Europe. The new L&T regulation is not based on demonstration of or belief in actual GMO risks. EU Commissioner for Health and Consumer Affairs David Byrne states repeatedly that the GM crop varieties currently approved by EU regulators for the market pose no greater food safety or environmental threat than the corresponding conventional varieties. Commissioner Byrne even describes EU consumers who continue to fear GM foods as ‘irrational’ (Byrne, 2001). In the autumn of 2001 the EU Commission released an official summary of the results of 81 separate scientific studies, all of which concluded there was no evidence of any new risks to human health or the environment from GM foods (Busquin, 2001). Thus EU Commission research admits that its new L&T regulation will not give EU consumers something they need to know, only something they wish to know. In December 2001, a Europe-wide survey revealed that 95% of citizens there want to know whether they are eating GM foods or not, so they can – if they wish – choose not to eat them (Biotech, 2001). The EU Commission has adopted L&T in the hope that if consumer choice is guaranteed by it, political space will open up to re-start the new GM crop approval process. In the meantime, the moratorium continues. The Council of Environmental Ministers said they would not consider lifting the moratorium until the new L&T rules were actually operating. Some European governments have even hinted that they will block GM approvals until strict environmental liability legislation is also in place. All this implies considerable further delay and a political process that could stretch out for several years ( Inside US Trade , April 2002).

While new labelling rules may eventually lead GM critics in Europe to withdraw their demands for moratoriums on GMO approvals, labelling and traceability will create barriers to profitability that slow producers or processed food firms in countries exporting to Europe from adopting GM seeds or crops. Barriers set up by technical tracing and labelling requirements took effect after October 2002 for the European market and for products entering the European market. The US response – the WTOsuit – came 6 months later. The costs to the US food and farm economy of complying with the EU L&T system is substantial – probably in excess of the annual value of exports now at risk. In countries such as the USA or Canada, where GM crops have until now been widely grown in an unsegregated manner, moving to this kind of product segregation could increase commodity costs by 15–50%, and final retail food prices by 9–10% (GMA, 2001). In view of such anticipated costs, the Government of Canada officially branded the new EU regulation as ‘discriminatory, very costly, unworkable, and unenforceable’ (Government of Canada, 2001).

Even if the USA were to win it’s formal WTO challenge, and even if the EU were then to comply by relaxing the L&T directive (and lifting its moratorium) there is little guarantee that EU importers would go forward to make voluntary purchases of unlabelled GM maize or GM soybean products from the USA. The spectacle of a US diplomatic effort to use WTO rules to coerce unwilling EU consumers into taking foreign GM foods unlabelled might only harden consumer resistance to GM foods in the EU.

Conclusion

With so many conflicting interests at stake, it is not surprising that the international regulation of GM crops remains in contention. Questions about international governance of GMO affairs are spurred on by differences between governments and firms who promote GMO use, such as the USA, and those who oppose it, as do many in Europe. What agencies and rules will prevail in setting the effective standards that firms and farmers must meet to produce and sell GMO seeds, crops, and their products?

So far, policies adopted within and among states address only some of the issues raised by GMOs. These administrative or legislative rules, mostly developed by a single state or economic union have yet to lead to international codes meant to bind all signatory states. However, the increasingly complex and institutionalized statebased regulatory approaches adopted within different countries, in an attempt to satisfy varying consumer, business and government desires, are proving inadequate to guide the international market in food.

Currently, conflict exists even between international regulatory bodies. Existing international rules, such as those of the WTO governing free trade and those of the CBD and CBP protecting environmental safety, are inconsistent. Thus, before development of a cohesive international GMO regulation regime, fundamental differences regarding GM products will have to be reconciled. If scientific, economic and cultural viewpoints continue to clash, broad benefit from GM technologies will be impossible. Ideally, a solution would allow for a more unified global regime. From the standpoint of food insecure people, industrial country farmers, biotech firms and environmental activists a more predictable, but updateable set of rules regulating GM is desirable. Whether the debate over the degree of risk, and research needed to assess this, can be resolved is doubtful. As a result, while the complementary goals of safety, fair trade and improved food distribution can be served better by ‘solution’ with such a process-oriented quality, the political path to transform the current impasse into a legal international formula that is sustainable (as discussed in Abbott et al ., 2000) remains uncertain. None the less, however complex and contentious the current GM regulatory situation is, cooperative gains based on science and justifiable caution are conceivable, as a review of current international regime governance controversies demonstrates.