A third possible approach, calling for formal or informal mutual regulatory adjustments (short of formal harmonization), falls somewhere in between the first two. In order to preserve a mutually convenient high volume of trans- Atlantic food and farm commodity (especially animal feed) trade, the USA and the EU might formally or informally agree to move their existing regulatory systems toward each other slightly. For example, the EU might agree to modify its L&T regulation to accept a threshold of GMO contamination above 1%, making the task of product segregation more affordable for the USA and other exporters. The USA could at the same time agree to require at least some form of mandatory GM labelling above those higher thresholds, for at least some foods and feeds. For example, the USA could adopt mandatory GM labelling for packaged foods and food commodities (and even feeds) at a 5% threshold, where GM content is detectable through physical testing (e.g. not in processed foods). Unfortunately, this third approach was never seriously tried by either the USA or the EU. In the summer of 2001, as the EU was moving toward a formal promulgation of its proposed L&T regulation, several US government officials did contact their EU counterparts to suggest the kinds of adjustments that might be needed to make the regulation compatible with undisrupted trans-Atlantic GM trade, but these suggested changes were nearly all rejected at the EU end. 12 And no offer of regulatory adjustment (e.g. movement toward some form of mandatory labelling) was ever made at the US end.

It may now be too late to secure the regulatory cooperation needed to avoid a major trade disruption. Indeed, a significant disruption has already taken place, in the form of bulk shipment exclusions from the EU market and also in the numerous decisions by exporters to hold back on the deployment of GM technologies not yet approved in the EU. The unresolved issue is whether a formal WTO challenge from the USA will only enflame these disruptions further. With or without such a challenge, we may now see a growing exclusion of GM-contaminated foods – and perhaps also feeds – from the important EU market, and probably also from the Japanese and Korean markets. This exclusion will be both formal (e.g. growing out of the continuing approval moratorium, or out of the new L&T regulation) and informal (e.g. growing out of private consumer preferences not to eat GM foods).

The high market segregation costs associated with the L&T approach will be even more discouraging to GM crop producers in the developing world. Building the costly parallel infrastructure needed to segregate GM from non-GM commodities will not be affordable in much of the developing world, and the sophisticated testing capacity needed to enforce segregation will not be available. The L&T regulation permits only a 1% contamination threshold, even for GMOs that are approved, and the Government of Canada has described this low tolerance level as ‘costly and unworkable, particularly from a bulk commodity perspective. To determine the adventitious presence of GMOs, particularly at very low levels, such as 1%, will require time consuming and costly tests in modern state of the art labs, and may be particularly onerous for developing countries’ (Government of Canada, 2001). The Government of Australia also describes the L&T Regulation as ‘particularly burdensome for developing countries’ (Government of Australia, 2001). The Grocery Manufacturers of America likewise warn that ‘Companies in developing nations with potentially less infrastructure and resources would confront significantly more difficulties and costs in exporting to Europe as they develop biotech products in the future’ (GMA, 2001). The obvious solution to this problem for developing countries will be to remain GM-free, never giving farmers permission to grow any GM crops in the first place.

If the past has been disappointing are there political or economic forces that might eventually move the world toward harmonization around this EU standard? EU officials can be expected to try to defend and advance their approach politically, within all the key intergovernmental venues discussed here – including WTO, CBP, Codex, OECD, and International Organization for Standardization (ISO). In each of these intergovernmental settings, however, US officials may retain sufficient political influence to mount blocking actions. In the Codex, as noted earlier, the USA has so far been able to neutralize EU efforts to push a strict L&T approach. Even within the CBP, where the US is not an official party, the fully precautionary EU approach has so far been held at bay. 13 EU-based NGOs such as Greenpeace can also be expected to continue using what political muscle they have to advance national and international regulatory systems unfriendly to the planting of GM crops, but US-based biotech firms are now countering with expensive advertising and public relations offensives of their own. So in both the political and NGO/multinational corporation realms, this test of strength between the USA and the EU could be a stand-off.

Within the international marketplace, however, the EU holds a stronger hand. In any international commodity market, it will be the biggest importers that will have the greatest leverage (the option to buy from someone else), giving them the greatest influence over international product standards. In today’s international agricultural markets, the EU is the biggest importer. In 2000, the EU 15 as a group imported from the rest of the world US$54.8 billion in agricultural products. The EU and Japan (another GM-averse country) together imported US$91.0 billion in agricultural products from the rest of the world in 2000. These two GM-averse importers thus offered to the rest of the world a commercial market more than twice as large as the commercial market offered by the GM-friendly USA – which imported a total of just US$44.9 billion worth of agricultural products in 2000 (FAOSTAT Database). Ultimately it could be this combined European and Japanese purchasing power that will pull international GMO trade standards in the direction of EU preferences. The Wall Street Journal recently acknowledged Europe’s influence over global food safety standards, but mistook the reason for this influence because of a failure to appreciate the greater size of EU agricultural imports compared with US imports. 14

The EU’s proposed L&T directive demonstrates the precautionary approach that these countries take toward GMOs. If an outright contest between states over proper international GMO regulation occurs, further prohibitive measures are likely to become the global norm. In order to allow GM technology to develop but also to protect people and the environment from possible risk, we propose another path toward harmonization that may be a more promising, egalitarian one.

Second alternative

The second alternative would be for rules principally grounded in science and with a commitment to their regular updating. Policy findings and regulations will not be authored by science, but the formula for governance can be driven by science-based risk assessment, and reasonable standards for its management. To reduce uncertainty for producers and manufacturers harmonization of regulations would still be needed, and occur through the decentralized adoption by states of compatible rules. The broad norms for such a regime, and the actual rules reached, however, would be constrained not only by the L&T debate within WTO principles, but also the search for biosafety and other risk reductions by science. One governance prospect is the discussion and outcomes that occur for advising on regulation under the Codex. In this forum, as it has deliberated in the past 2 years representatives have tried to balance both WTO trade concerns and CBD bio and ecology safety protections.

This latter alternative is promising from lessons learned in rule making in other areas of global governance. For example, international institutions work best when several desiderata are taken into account collectively. The FAO has a broader base for calling on specialists, a wider range of countries prospectively represented; it has clear ties to the enforcement agencies for food and bio safety in countries, compared with the WTO. It also can meet and act with less cumbersome procedures, and take uncertainty into account more formally. While economic actors may prefer rigid and durable rules to enhance certainty of the results of their investments, consumers, producers and long-term food security interests may be best served by a governance process that regularly requires updating of rules themselves, based on changes in scientific evidence, hence building in flexibility for change (Koremenos et al ., 2001, pp. 775–779; 1032–1041).

Such changes would not constitute a new regime, as the EU tracing and labelling plan  does. It could, however, allow for the high costs of a segregated use of GMO crops, should this become a practice, to be progressively reduced as experience and further research gave more scientific evidence that the GM products presented no evidence of causing harm. Further, their benefits as a crop could also be taken into account in the risk assessment of the early phase of scientific appraisals. The risk management tasks would still engage lawyers, and officials specialized in the codes and enforcement practicalities, but their efforts would be less subject to premature and hard-to-reverse qualities.

For this second alternative, one promising development was the outcome of the March, 2002 Meeting of the Codex Intergovernmental Task Force on ‘Foods Derived From Biotechnology’. The principles it adopted for risk analysis and guidelines for conducting safety assessments of foods derived from biotechnology may allow compromise. The meeting included the concept of traceability in the standards without explicitly referring to it. The principles for risk analysis would require authorities to take into account uncertainties identified in the safety assessment and implement ‘appropriate risk management’ measures, treating pre-market safety assessment on a case-by-case basis. This compromise is to be submitted to the Codex for adoption at its meeting in July 2003.

This more process-based approach would require regular updating of regulations and a release, setting standards as well as approvals on an ongoing basis as further information becomes available. Risk assessment changes would be tied to rules about risk management, with issues about safety central, but not based on ‘principles’ that allowed for withholding new technology for commercial reasons that relied on uncertainty as a precautionary standard. The varying standards used over time with drugs – allowing quicker release and less caution for those with most promise – is one example of how a flexible, yet science-based approach might work. The alternative, a blocking of GM crops on principle seems to ignore – and will most certainly not benefit from – the potential global gains from further development of the technology. Halting GM technology development now will eliminate this tool from the global repertoire. In a conservative application of a risk-based but not ‘principle’-based approach, such as current policies surrounding pharmaceuticals and nuclear power, the issue of harm to users would be seriously considered in the formation of regulation. This approach would ensure that both potential risk and benefit of different GM crops were considered, allowing appropriate use and development of this technology now and in the future.