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A New and Controversial Mandate forthe SPS Agreement:
The WTO Panel's Interim Report in theE. C.-Biotech Dispute
Andrew Thomison"
In trod u ctio n
.................................................................................................
288I. Background and H istory
.........................................................................
288
A. The WTO and its Core Functions
..................................................... 288B. W TO
Side Agreem ents
.......................................................................
290C. The Disputed EC Regulations
........................................................... 292D.
Procedure and Claims of the Complaining Parties
......................... 293
II. T he Panel's D ecision
.............................................................................
296A. The Applicability of the SPS Agreement
.......................................... 297B. The General
Moratorium on GMO Product Approval ................... 299C.
Application of Safeguard Measures by EC Member States .............
303
III. A ssessm en t
.............................................................................................
304IV . C on clu sion
.............................................................................................
307
* J.D. Candidate 2007, Columbia University School of Law; B.A.
2004, Williams College;Administrative Editor, Columbia Journal of
Environmental Laur, Managing Editor, ColumbiaJournal of European
Law. I wish to thank Columbia Journal of Environmental Law
Editor-in-ChiefGeoff Roughton for providing me with an opportunity
to write on such a deeply importantcase and for his insightful and
helpful feedback throughout the editing process. I would alsolike
to extend my thanks to Professor Richard Gardner for serving as my
advisor on thisproject. Lastly, I thank my parents, John and Rena
Thomison, along with family and friends,for their patient support
and forbearance during the writing and revision of this
CaseComment.
-
COLUMBIAJOURNAL OF ENVIRONMENTAL LAW
INTRODUCTION
In May of 2003, pursuant to the World Trade
Organization's(WTO's) Understanding on Rules and Procedures
Governing theSettlement of Disputes (DSU),' the United States,
Canada, andArgentina (the "Complaining Parties") initiated a
disputesettlement proceeding against the European Community (EC) 2
inregard to an alleged "moratorium on the approval of
biotechproducts.0 Among the world's leading producers of
GeneticallyModified Organisms (GMOs) , the Complaining Parties hold
akeen interest in gaining access to the European agricultural
marketfor their GMO products. Between October of 1998 and
theinitiation of dispute settlement, however, not a single
GMOproduct had been approved for marketing within the EC.'Through
the use of DSU mechanisms, the Complaining Partieshoped to
negotiate changes to the EC regulatory scheme whichwould end the
moratorium on GMO product approval andexpedite the approval
process. Negotiations proved unsuccessful.On August 7, 2003, after
failing to reach a satisfactory conclusionthrough discussion with
the EC, the Complaining Parties requestedthe establishment of a WTO
panel to investigate the dispute. 6
I. BACKGROUND AND HISTORY
A. The WTO and its Core Functions
On January 1995, the WTO superseded the General Agreement
1. Understanding on Rules and Procedures Governing the
Settlement of Disputes, Apr.15, 1994, Marrakesh Agreement
Establishing the World Trade Organization, Annex 2,
LegalInstruments-Results of the Uruguay Round, 33 I.L.M. 1125
(1994).
2. The EC is the successor to the European Economic Community
and represents theeconomic and social arrangements of the single
market within the European Union.
3. Panel Report, European Communities-Measures Affecting the
Approval and Marketing ofBiotech Products, 1, WT/DS291, WT/DS292,
WT/DS293 (Feb. 7, 2006).
4. United States, Argentina, and Canada represented 96 percent
of the world's acreage ofgenetically modified or transgenic crops
in 2002. See HEIKE BAUMOLLER, DOMESTIC IMPORTREGULATIONS FOR
GENETICALLY MODIFIED ORGANISMS AND THEIR COMPATIBILITY WITH
WVTORULES 8 (2003). The U.S. State Department declared that by 2002
the U.S. had lost $300million in sales of genetically modified corn
and soy products alone. See European CommissionOpts not to Push for
End of GMO Moratorium, INSIDE U.S. TRADE,Jan. 25, 2002.
5. Panel Report, supra note 3, at 29.6. Id. at 1.
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E. C.-Biotech Dispute
on Tariffs and Trade (GATT) as the premier forum for
thenegotiation of trade issues.7 In its preamble, the
AgreementEstablishing the World Trade Organization (WTO
Agreement)included among its stated goals the "expanl[sion of] the
productionof trade in goods and services," the "protect[ion] and
preserv[ationof] the environment," and agreement on "reciprocal and
mutuallyadvantageous arrangements directed to the substantial
reduction oftariffs and other barriers to trade and to the
elimination ofdiscriminatory treatment in international trade
relations."8 Whilethe WTO was in many ways innovative, it
represented to someextent a continuation and expansion of the GATT
systemoriginating half a century earlier. Indeed, the WTO
Agreementincludes implementation of the GATT 1994 agreement,
located inAnnex IA, as one of the WTO's primary functions.9 The
result isthe assimilation of GATT principles and requirements into
theWTO. As reflected in the WTO Agreement's preamble andexplicitly
incorporated in Annex IA, these requirements include,among others,
GATT Article I, requiring that a product made inone member country
must be treated no less favorably than a likegood that originates
in another member country, and GATTArticle III, requiring that
foreign-produced goods must be treatedno less favorably than like
or directly competitive domestically-produced goods, once they have
come across a member nation'sborders.'0 As emphasized by Petros
Mavroidis, these non-discrimination obligations, designed to
prevent nations from
7. See Final Act Embodying the Results of the Uruguay Round of
Multilateral TradeNegotiations, 1 3, Apr. 15, 1994, 33 I.L.M. 1125
(1994).
8. Marrakesh Agreement Establishing the World Trade
Organization, Final ActEmbodying the Results of the Uruguay Round
of Multilateral Trade Negotiations, Apr. 15,1994, 33 I.L.M. 1125,
preamble (1994).
9. Id. at Art. 111(1).10. The General Agreement on Tariffs and
Trade, Oct. 30, 1947, 61 Stat. A3, 55 U.N.T.S.
188 (1947). Article I(1) requires that "any advantage, favour,
privilege or immunity grantedby any contracting party to any
product originating in or destined for any other country shallbe
accorded immediately and unconditionally to the like product
originating in or destinedfor the territories of all other
contracting parties." Article 111(1) states that "internal taxesand
other internal charges, and laws, regulations and requirements...
and internalquantitative regulations ... should not be applied to
imported or domestic products so as toafford protection to domestic
production." Article 111(4) notes that "[t]he products of
theterritory of any contracting party imported into the territory
of any other contracting partyshall be accorded treatment no less
favourable than that accorded to like products ofnational origin in
respect of all laws, regulations and requirements affecting their
internalsale, offering for sale, purchase, transportation,
distribution or use."
2007]
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COLUMBIAJOURNAL OF ENVIRONMENTAL LAW
enacting protectionist measures, represent the "cornerstone of
theGATT."" In order to ensure member state compliance with
thesecore tenets and to resolve disagreements between members
quicklyand, if possible, congenially, the Agreement Establishing
the WorldTrade Organization included in Annex 2 the Understanding
onRules and Procedures Governing the Settlement of Disputes
(DSU)and called for WTO administration of the DSU's provisions.
1
2
B. WTO Side Agreements
Among the other multilateral agreements to be included inAnnex
1A of the Agreement Establishing the World TradeOrganization were
the Agreement on Technical Barriers to Trade("TBT Agreement") and
the Agreement on Sanitary andPhytosanitary Measures ("SPS
Agreement"). 13 The general purposeof these agreements was to allow
member states to adopt measuresdesigned to protect human health or
animal life or plant life whileat the same time preventing the use
of such measures as a means of"arbitrary or unjustifiable
discrimination" between member statesor as a "disguised restriction
on international trade."'14 The SPSAgreement, by its terms, applies
to "all sanitary and phytosanitarymeasures which may, directly or
indirectly, affect internationaltrade." 15 The SPS Agreement
defines an SPS measure in AnnexA(1) as any measure applied
to protect animal or plant life or health within the territory
of theMember from risks arising from the entry, establishment or
spread ofpests, diseases, disease-carrying organisms or
disease-causingorganisms;to protect human or animal life or health
within the territory of the
11. Petros C. Mavroidis, Technical Barriers: TBT and SPS
Agreements, in THE WORLD TRADEORGANIZATION (Petros C. Mavroidis et
al. eds., 2006).
12. Agreement Establishing the World Trade Organization, supra
note 8, art. 111:3. For adescription of DSU procedure, see Suzanne
Bermann, EC-Hormones and the Case for an ExpressWTOPostretaliation
Procedure, 107 COLUM. L. REV. 131, 134-38 (2001).
13. Agreement Establishing the World Trade Organization, supra
note 8, annex IA.14. Agreement on the Application of Sanitary and
Phytosanitary Measures, Apr. 15, 1994,
Marrakesh Agreement Establishing the World Trade Organization,
annex IA, MultilateralAgreements on Trade in Goods, 33 I.L.M. 1154
(1994) [hereinafter the SPS Agreement];Agreement on Technical
Barriers to Trade, Apr. 15, 1994, 1868 U.N.T.S. 120, Preamble(1994)
[hereinafter the TBT Agreement].
15. Agreement on the Application of Sanitary and Phytosanitay
Measures, supra note 14,art. 1.1.
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E. C.-Biotech Dispute
Member from risks arising from additives, contaminants, toxins,
ordisease-causing organisms in foods, beverages, or feedstuffs;to
protect human life or health within the territory of the Memberfrom
risks arising from diseases carried by animals, plants or
productsthereof, or from the entry, establishment or spread of
pests; orto prevent or limit other damage within the territory of
the Memberfrom the entry, establishment or spread of pests.'1
The SPS Agreement requires, however, that members of theWTO
("Member States") "ensure that any... measure is appliedonly to the
extent necessary.. . , is based on scientific principles,and is not
maintained without sufficient scientific evidence ....Furthermore,
the SPS Agreement requires that such sanitary orphytosanitary
measures ("SPS measures") be based on "anassessment, as appropriate
to the circumstances, of the risks tohuman, animal or plant life or
health, taking into account riskassessment techniques developed by
the relevant organizations."'If scientific evidence is
insufficient, the SPS Agreement allowsMember States to adopt
provisional SPS measures on the basis ofavailable pertinent
information. If a Member State chooses toadopt such a provisional
measure, that Member State must seek toobtain additional
information necessary to conduct a moreobjective risk assessment.
Once the Member State has conductedthe new risk assessment, it
should review its provisional measureswithin a "reasonable period
of time."'19 Lastly, the SPS Agreementmandates that any protective
SPS measures not be more trade-restrictive "than required to
achieve [their] appropriate levels ofsanitary or phytosanitary
protection"2 and that all SPS proceduresbe "undertaken and
completed without undue delay.",
2'
The TBT Agreement attempts to secure a similar balancebetween
permitting measures to protect human, animal, and plantlife or
health and preventing such measures from being used in
adiscriminatory or protectionist manner. It applies to
technicalregulations2 and standards that do not fall within the
ambit of the
16. Id. annexA(1).17. Id. art. 2.2.18. Id. art. 5.1.19. Id. art.
5.7.20. Id. art. 5.621. Id. annex C(1) (a).22. See Appellate Body
Report, European Communities-Trade Description of Sardines,
175,
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COLUMBIAJOURNAL OF ENVIRONMENTAL LAW
SPS Agreement. 23 Like GATT Article I, Article 2.1 of the
TBTAgreement requires that treatment of products imported from
theterritory of any member be no less favorable than treatment
givento like products of national origin and to like products
originatingin any other country.2 4 The TBT Agreement also contains
limitingprovisions with regard to regulatory content similar to
those seen inthe SPS Agreement. Technical regulations, for
instance, shouldnot be adopted or applied with the effect or intent
to createunnecessary obstacles to international trade.' Nor
shouldtechnical regulations be more trade-restrictive than
necessary tofulfill a legitimate objective.26 Compared to the SPS
Agreement'srisk assessment inquiry, however, the TBT Agreement's
inquiryfocuses less on the scientific justification for protective
measuresand instead places greater emphasis on any discriminatory
effectsthe measures have on international trade. The result is
thatmeasures which do not fall within the ambit of the SPS
Agreement,but are regulated by the TBT Agreement, receive a less
demandingassessment in the case of WTO disputes. 7
C. The Disputed EC Regulations
The EC has enacted some of the world's most
demandingrequirements for importation of GMOs. 2 Directive
2001/18/EC,which itself represented a modification and
strengthening of itspredecessor, Directive 90/220/EC, 9 imposes a
series of stringentimport hurdles that GMOs must pass before they
may be placed onthe market or released into the environment. The
requirements ofthe Directives include a case-by-case environmental
risk assessment
WT/DS231/AB/R (Sept. 26, 2002).23. Agreement on Technical
Barriers to Trade, supra note 14, art. 1.5.24. Id. art. 2.1. While
GATT Article I is a provision of general applicability, Article 2.1
of
the TBT Agreement applies only to technical regulations.25. Id.
art. 2.2.26. Id.27. Joost Pauwelyn, The WTO Agreement on Sanitary
and Phytosanitary (SPS) Measures as
Applied in the First Three SPS Disputes EC-Hormones, Australia-
Salmon and Japan Varietals, 2 J.INT'L ECON. L. 641, 644 (1999).
28. BAUMCLLER, supra note 4, at 8.29. Directive 2001/18/EC of
the European Parliament and of the Council, On the
Deliberate Release into the Environment of Genetically Modified
Organisms and RepealingCouncil Directive 90/220/EC, 2004 O.J. (L
106) 1, available at
http://europa.eu.int/eur-lex/pri/en/oj/dat/2001/1_106/1_10620010417en00010038.pdf.
[Vol. 32:2
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E. C. -Biotech Dispute
taking into account cumulative long-term environmental effects,
30
satisfactory field testing, appropriate labeling, 2 and
opportunityfor public comment.3 Furthermore, Article 23 of
Directive2001/18/EC permits an EC member state to provisionally
restrictof the sale or use of GMO products, even when such products
havealready passed EC inspection, so long as that member
statepossesses "new or additional information ... affecting
theenvironmental risk assessment., 34 This so-called "Safeguard
Clause"permits EC member states to raise an additional barrier to
theadmission of GMO products if evidence exists to support
suchaction.
Regulation (EC) 258/97 of the European Parliament and of
theCouncil lays out administrative procedures necessary to
gainapproval for placing food products and ingredients on the
market.The Regulation applies to foods or ingredients containing
orconsisting of GMOs 35 but also includes foods and
ingredientsproduced from, but no longer containing, GMO material s6
Theadministrative procedures required by Regulation (EC) 258/97
aresimilar to those laid out in Directive 2001/18/EC, and, like
theDirective, the Regulation includes a Safeguard Clause allowing
anEC member state to object to otherwise-approved marketing of
thefood product if the member state possesses new or
additionalinformation affecting the environmental risk
assessment.
37
D. Procedure and Claims of the Complaining Parties
On May 13, 2003, the United States, Canada, and
Argentinainitiated the dispute settlement process against the EC
under theauspices of the WTO. 3' Each party first requested
consultation with
30. Id. at 5.31. Id.32. Id. The directive mandates that all
products containing or consisting of GMOs have
either a label or an accompanying document containing the
sentence "This product containsgenetically modified organisms."
33. Id. at 8.34. Id. at 13.35. Within the meaning of Directive
2001/18/EC. See Regulation (EC) No. 258/97 of the
European Parliament and of the Council, Concerning Novel Foods
and Novel FoodIngredients, 1997 OJ. (L 43) 1, 2, available at
http://www.fsai.ie/legislation/food/eudocs/NovelFoods.andIngredients/Reg258.97.pdf.
36. Id. at 2.37. Id. at 4.38. Panel Report, supra note 3, at
1.
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COLUMBIAJOURNAL OF ENVIRONMENTAL LAW
the EC, as required by Article 4 of the DSU, Article 11 of the
SPSAgreement, Article 19 of the Agreement on Agriculture, Article
14of the TBT Agreement, and Article XXII of GATT. 5 On June
19,2003, the United States and Argentina held the
requestedconsultations, but failed to reach a mutually satisfactory
resolutionof the dispute.40 Canada's consultation with the EC
followed onJune 25, 2003, and the process again failed to produce a
satisfactoryresolution of the dispute.4' On August 7, 2003, the
ComplainingParties requested the establishment of a single WTO
panel toexamine their claims,42 and on August 29, 2003, the
DisputeSettlement Body of the WTO established such a panel 3
OnFebruary 23, 2004, pursuant to a request from the
ComplainingParties, the Director-General of the WTO determined
thecomposition of the three- person Panel.44 The first
substantivemeetings of the Panel began in early June of 2004, and
on February
457, 2006, the Panel issued its interim report to the parties.In
its complaint to the panel, the United States46 alleged that
the
EC's failure to approve any GMO products between October 1998and
August 2003 constituted a de facto moratorium on productapproval.
With this moratorium on approval of GMO products, theEC had
violated its obligations to the WTO and specifically hadfailed to
adhere to the standards required by the SPS Agreement.
47
The United States alleged that because the EC had violated
Article5.1 of the SPS Agreement, which requires that SPS measures
bebased on a risk assessment, 4s the EC was also in violation of
Article
39. Id.40. Id.41. Id.42. Id. at 1-2.43. Id. at 2.44. Id. Mr.
Christian Hdberli served as the Panel's chair, with Mr. Mohan Kumar
and
Professor Akio Shimizu serving as the Panel's members.45. Id. at
3.46. Canada and Argentina lodged analogous complaints with regards
to the de facto
moratorium. Canada did not, however, allege a violation of Annex
C(1) (b). It also alleged aviolation of Article 5.6 of the SPS
Agreement, which requires that sanitary or phytosanitarymeasures be
no more trade-restrictive than necessary. See SPS Agreement, art.
5.6.Argentina too made largely the same allegations as the United
States, but did not allege anEC violation of Annex C. Argentina
made an additional claim that the EC breached itsobligations under
article 10.1 of the SPS Agreement, which requires that Members
"takeaccount of the special needs of developing country Members."
See SPS Agreement, supra note14, art. 10.1.
47. Panel Report, supra note 3, at 28.48. SPS Agreement, supra
note 14, art. 5.1.
[Vol. 32:2
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E. C.-Biotech Dispute
2.2 of the SPS Agreement, which requires that measures be
"basedon scientific principles and [not be] maintained without
sufficientscientific evidence" and that such measures be applied
"only to theextent necessary to protect human, animal or plant life
or health. 49The United States also stated that the general
moratorium onGMO product approval represented a violation of
Article 5.5 of theSPS Agreement, which prohibits "arbitrary or
unjustifiabledistinctions [in the level of sanitary or
phytosanitary protection], ifsuch distinctions result in
discrimination or a disguised restrictionon international trade."'
Thus, the United States argued, becausethe EC was in violation of
Article 5.5, it was also in violation ofArticle 2.3 of the SPS
Agreement, which also forbids application ofSPS measures "in a
manner which would constitute a disguisedrestriction on trade. 5
The United States also alleged that becausethe EC's de facto
moratorium on GMO product approval had notbeen enacted into law, it
represented a violation of Annex B(1) andAnnex C(1)(b) of the SPS
Agreement, which require all SPSregulations, along with the
standard processing period of eachprocedure, to be published
promptly. 52 Lastly, the United Statesalleged that the de facto
moratorium represented an outrightviolation of Annex C(1)(a) of the
SPS Agreement,5 3 which requiresthat SPS procedures be undertaken
and completed without "unduedelay and in a no less favorable manner
for imported products thanfor like domestic products.
' 4
The United States also alleged that a number of
product-specificmeasures, which resulted in the failure to approve
productapplications, resulted in similar violations of the EC's WTO
treatyobligations. 55 Additionally, the United States stated that
certain EC
49. Id. art. 2.2.50. Id. art. 5.5.51. Id. art. 2.3.52. Id. annex
B(I), annex C(1)(b). With these violations, the EC would also
violate
Article 7 of the SPS Agreement, which requires notification of
changes in sanitary orphytosanitary measures in accordance with
Annex B, and Article 8 of the SPS Agreement,which requires that
members observe the provisions of Annex C.
53. Again, the violation of Annex C(1) (a) also represents a
violation of Article 8.54. Id. annex C(1)(a).55. Panel Report,
supra note 3, at 37.. The United States again alleged breaches
of
Articles 5.1 (and consequently 2.2), 5.5, Annex C(1)(a) and
C(1)(b) (and consequently,Article 8), and Annex B(1) (and
consequently, Article 7). Canada's allegations on product-specific
measures mirrored its allegations on the general moratorium, except
it dropped theallegation that the EC violated Annex B(1) (and
consequently, Article 7), and included anallegation of a violation
of Article 111:4 of GATT 1994, which requires national treatment
by
2007]
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COLUMBIAJOURNAL OF ENVIRONMENTAL LAW
member states5" had used the safeguard provisions of
Directive2001/18/EC and Regulation (EC) 258/97 in a way that did
notconform to the WTO and SPS obligations mentioned above.
The EC, in response, argued simply that there was nomoratorium
on GMO product approval; in order to have amoratorium, the EC
stated that it would have had to adopt a legalinstrument halting
approval of GMO products. 57 Because it hadnot taken such action,
the EC stated that the moratorium hadnever existed.5 The EC further
asserted that any delays in theapproval process were justified on a
number of bases,5" in additionto grounds such as the difficulties
of scientific and technical reviewand the requirements of the
labeling process. 6 The EC alsodisputed the applicability of the
SPS Agreement to many of themeasures at issue, saying that they
were measures designed toprotect the environment and thus were
outside the scope of theSPS Agreement. The TBT Agreement, the EC
asserted, was themore appropriate instrument for addressing the
dispute. 61 Withregard to national safeguards, the EC stated simply
that suchsafeguards fell outside of the scope of the SPS Agreement
andtherefore should not be held invalid with regards to
theAgreement's demands. 62
II. THE PANEL'S DECISION
In a document dated February 7, 2006, and weighing in at overone
thousand pages, the WTO Panel issued its interim report onthe
EC-Biotech dispute. In public, neither side admitted defeat.64
Members of products imported from the territory of another
Member. Argentinamaintained its allegations of violations of
Articles 5.1 and 5.5 of the SPS Agreement, and alsoalleged EC
violations of Article 5.6 of the SPS Agreement, violations of
Article 111:4 of GATT1994, and violations of Annex C(1)(a),
C(1)(b), C(1)(c) and C(1)(e) of the SPS Agreement.
56. These members include Austria, France, Germany, Greece,
Italy, and Luxembourg.See Panel Report, supra note 3, at
831-1029.
57. Id. at 147.58. Id.59. These grounds include risk
considerations, acceptance of delay by the applicant,
entry into force of new legislation, delay caused by applicant,
delay necessary to ensurecompliance with EC and international
standards, and efforts to manage SPS risks. See Id. at145-146.
60. Id. at 146.61. Id. at 334.62. Id. at 147.63. Interim Panel
Reports generally are not released to the public. In this case, a
copy of
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E.C.-Biotech Dispute
In reality, the Panel's decision was more nuanced than either
sideacknowledged, ruling in favor of the United States, Canada,
andArgentina on some procedural matters but declining to decidemany
of the substantive claims regarding EC regulatory law.
A. The Applicability of the SPS Agreement
The Panel first determined the extent of applicability of the
SPSAgreement to Directive 90/220/EC, along with its
successorstatute, Directive 2001/18/EC, and the SPS
Agreement'sapplicability to Regulation (EC) 258/97.65 The
ComplainingParties had alleged that the above measures fell in
their entiretywithin the scope of the SPS Agreement. The EC, in
contrast, onlyacknowledged applicability of the SPS Agreement to
portions ofthe measures and desired the remainder to be interpreted
inaccordance with the less-stringent TBT Agreement. 66 The
Panelnoted that the avowed purpose of the two Directives was "to
protecthuman health and the environment from adverse effects...
whichmight result from deliberate release of GMOs into
theenvironment.6 7 Annex A(1) (a) of the SPS Agreement, it
noted,was designed to "protect animal or plant life or health. . .
fromrisks arising from the entry, establishment or spread of
pests,diseases, disease-carrying organisms, or disease-causing
organ-
the report was leaked on May 10, 2006, but the official release
of the decision did not occuruntil September 29, 2006.
64. U.S. Trade Representative Susan Schwab declared "[t]he WTO
has ruled in favor ofscience-based policymaking over the
unjustified, anti-biotech policies adopted in the EU."See Press
Release, United States Trade Representative, U.S. Trade
Representative SusanSchwab and U.S. Agriculture Secretary Mike
Johanns Announce Favorable Ruling in WTOCase on Agricultural
Biotechnology (Sept. 29, 2006), available at
http://www.ustr.gov/Document-Library/Press-Releases/2006/September/US-Trade-Representative
-Susan-SchwabUS.AgricultureSecretaryMikejohanns
AnnounceFavorableRulingin ,rrO_Case_on.Agri.html. In contrast,
Adrian Bebb, the GMO Campaigner for Friends of the Earth,stated
"[t] his is no victory for the United States or the biotech
companies." See Press Release,Friends of the Earth Europe, U.S. Did
Not Win Transatlantic GM Trade Dispute (May 11,2006), available at
http://www.foeeurope.org/press/2006/AB11_MayWTO.htm. PeterPower, an
EU Spokesman downplayed the importance of the decision, saying that
it was"largely of historical interest" and would not "alter the
system or framework within which theEU takes decisions on GMOs."
See Sam Cage, U.S., EU again at Loggerheads on Trade as BothClaim
Victory in WFTO Biotech Ruling, ASSOCIATED PRESS, Feb. 9, 2006,
available
athttp://www.tradeobservatory.org/headlines.cfm?reflD=78485.
65. Panel Report, supra note 3, at 321.66. Id. at 322.67. Id. at
334.
2007]
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COLUMBIAJOURNAL OF ENVIRONMENTAL LAW
isms. ' ' 68 After determining that GMOs could be considered
"pests"in some circumstances,69 the Panel next decided that
geneticallymodified seeds, even those used for the purpose of
planting, couldbe considered "food, beverages, or feedstuff' within
the meaning ofAnnex A(1) (b) of the SPS Agreement due to their
potentialconsumption by wild animals.7 0 The Panel also concluded
thatAnnex A(1) (c) " and Annex A(1) (d)7 2 of the SPS Agreement
wereapplicable to GMO products due to the potential for a
geneticallymodified plants to produce allergenic effects in
situations otherthan when consumed as food and the potential for
physicaldamage to property or economic damage that could result
fromintroduction of a GMO into the environment.13 In light of
thedangers that the SPS Agreement was intended to address, the
Paneldetermined that "Directives 90/220 and 2001/18 constitute
SPSmeasures" and were thus within the scope of the SPS
Agreement.
7 4
With regard to Regulation (EC) 258/97, the Panel placed
greatemphasis on Article 3(1) of the Regulation, which states that
foodand food ingredients (1) must not present a danger to
theconsumer, (2) must not mislead the consumer, and (3) must
notdiffer from foods or food ingredients which they are intended
toreplace to such an extent that their normal consumption would
benutritionally disadvantageous to the consumer. The Panelconcluded
that to the extent the Regulation seeks to achieve thefirst of the
three purposes-i.e., preventing danger to theconsumer-it falls
within the scope of Annex A(1) (b) of the SPSAgreement and
therefore constitutes an SPS measure. To theextent that the
Regulation is designed to achieve the remaining two
76purposes, however, it would not constitute an SPS measure.The
Panel next analyzed the applicability of the SPS Agreement
68. Id. at 336.69. Id. at 340. The Panel makes considerable use
of various versions of the Oxford
English Dictionary during the course of its reasoning.70. Id. at
357.71. Covering measures "to protect human life or health.., from
risks arising from
diseases carried by animals, plants, or products thereof." SPS
Agreement, supra note 14,annex A(1) (c).
72. Covering measures "to prevent or limit other damage... from
the entry,establishment or spread of pests." Id. annex A(1)
(d).
73. Panel Report, supra note 3, at 373, 375.74. Id. at 382.75.
Id.76. Id. at 387.
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E. C. -Biotech Dispute77to safeguard measures adopted by member
states. At issue were
nine safeguard measures taken by six EC countries,
includingAustria, France, Germany, Greece, Italy, and Luxembourg. 7
Thesesafeguard measures included regulations adopted pursuant
toArticle 16 of Directive 90/220/EC, which were later reviewed
andmaintained under Article 23 of Directive 2001/18/EC, 79 as well
asmeasures adopted pursuant to Article 12 of Regulation
(EC)258/97.80 The United States claimed in its complaint that these
ECmember states failed to base their safeguard measures
onappropriate risk assessments as Articles 5.1 and 2.2 of the
SPSAgreement required. The United States further alleged that
thesafeguard measures represented arbitrary and
unjustifiabledistinctions in the levels of protection against risks
and that thesemeasures therefore constituted discrimination or
disguisedrestrictions in violation of Articles 5.5 and 2.3 of the
SPS5 2Agreement.8 Applying much the same reasoning as used
withregard to Directives 90/220/EC, 2001/18/EC and Regulation
(EC)258/97, the Panel arrived at the conclusion that each of the
ninesafeguard measures lay within the scope of the SPS Agreement
andwas therefore subject to its provisions. s
B. The General Moratorium on GMO Product Approval
The Complaining Parties asserted that the EC's failure to
77. Id. at 831.78. Id. at 833.79. Id. Article 23 allows a state
to take provisional safeguard measures where new
information regarding a product's risk assessment becomes
available after the date ofconsent, and such information provides
detailed grounds for considering that a GMOproduct may present a
risk to human health or the environment. See Directive 2001/18/ECof
the European Parliament and of the Council, On the Deliberate
Release into theEnvironment of Genetically Modified Organisms and
Repealing Council Directive90/220/EC, 2004 O.J. (L 106) art.
23.
80. Id. Article 12 allows a state to take provisional safeguard
measures where newinformation regarding a food or food ingredient's
risk assessment becomes available whichpresents detailed grounds
for considering that the food or food ingredient endangershuman
health or the environment. See Regulation (EC) No. 258/97 of the
EuropeanParliament and of the Council, Concerning Novel Foods and
Novel Food Ingredients, 1997O.J. (L 43).
81. Panel Report, supra note 3, at 834. Canada's and Argentina's
claims were somewhatsimilar. See supra text of note 46.
82. Again, the Panel looked at the risks the measures were
intended to prevent and foundthe scope of the SPS Agreement broad
enough to include them.
83. Panel Report, supra note 3, at 1035-38.
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COLUMBIAJOURNAL OF ENVIRONMENTAL LAW
approve any GMO products since 1998 despite having a
statutoryframework in place proved the existence of a de facto
moratoriumon assessment of GMO products. 4 The EC denied the
existence ofa moratorium, claiming that the evaluation process had
neverstalled and that all pending applications had been subject
torequests for additional information. 5 It further stated that
thealleged moratorium represented an inherently
proceduralcomplaint, rendering inapplicable the substantive
provisions of theSPS Agreement. Only the obligations contained in
Article 8 andAnnex C (1) of the SPS Agreement should apply. 86
The Panel determined that a moratorium had indeed been ineffect
since 1998, when the last GMO product had been grantedapproval.
Among the strongest evidence supporting theComplaining Parties'
positions was a statement made by severalstates in June 1999; five
EC states had declared that they had theauthority to prevent the
approval of applications pending theadoption of EC rules governing
labeling and traceability of biotechproducts. 17 The Panel
concluded that this action-along withvarious documents and
statements made by the EC or by ECmembers regarding a moratorium on
GMO product approval-proved that a de facto (but informal)
moratorium had been inexistence until August 2003. This moratorium,
the Panel stated,had been applied to all applications for approval
of biotechproducts that were pending or had been submitted during
theperiod from October 1998 to August 2003. The moratorium,
itnoted, was characterized by the effective suspension by the EC
offinal approval decisions regarding biotech applications.88
After determining the existence of a general de factomoratorium
on GMO product approval, the Panel next determinedthat the
moratorium did not represent an SPS measure within themeaning of
Annex A(1) and Article 5.1 of the SPS Agreement. 89The Panel
reasoned that the decision to apply a general
84. Id. at 391.85. Id. at 393.86. Id. at 590.87. NATHALIE
BERNASCONI-OSTERWALDER & MARiA JULIA OLIVA, EC-BIOTECH:
OVERVIEW
AND ANALYSIS OF THE PANEL'S INTERIM REPORT 11 (2006). These
member countries wereDenmark, Italy, France, Greece, and
Luxembourg.
88. Panel Report, supra note 3, at 395.89. The complaining
parties had asserted that the moratorium itself represented an
SPS
measure, and thus the EC was required to conduct a risk
assessment in its support. Id. at590.
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E. C.-Biotech Dispute
moratorium was not a substantive decision to reject all
applications,but rather was more akin to a procedural decision not
to make finaland favorable substantive decisions until certain
conditions weresatisfied. 90 Thus, the moratorium did not represent
a"requirement[] or procedure[]" within the meaning of AnnexA(1) of
the SPS Agreement, but rather represented only a decisionregarding
the timing and application of such a procedure. 91Because the
moratorium was not an SPS measure, the EC was notobligated to
accompany its decision with a risk assessment asrequired by Article
5.1 of the SPS Agreement. The Panel followeda similar line of
reasoning 92 to conclude that Articles 5.6, 5.5, 2.3,2.2, 7 and
Annex B(1) of the SPS Agreement also did not apply tothe EC's
moratorium. 9 The Panel disposed of the product-specificmeasures in
an analogous manner, reasoning that, once again, theEC's inaction,
in the form of the general de facto moratorium, didnot itself
represent an independent procedure, which would havefallen within
the scope of the SPS Agreement, but rather,represented only a
choice about how to implement their alreadyexisting procedures.
94
The United States and Canada, however, made an additionalclaim
that the general de facto moratorium had caused the EC toviolate
its obligations under Article 8 and Annex C(1) (a) of the
SPSAgreement. 95 Unlike the statutes which had been subject of
theearlier claims, Article 8 and Annex C(1) (a) of the SPS
Agreementcontain procedural language governing the application of
SPSmeasures. Article 8 requires members to "observe the provisions
ofAnnex C in the operation of control, inspection and
approvalprocedures .... Annex C(1) (a), in turn, requires that
anysanitary or phytosanitary procedure be "undertaken and
completedwithout undue delay..., The United States and Canada
arguedthat the general de facto moratorium represented such an
"unduedelay" in the EC's sanitary and phytosanitary procedures.
The
90. Id. at 594.91. Id. at 604.92. The Panel again concluded in
each case that the moratorium did not qualify as an
SPS measure, which would be regulated by these provisions.93.
Id. at 608-21.94. Id. at 672-74.95. Argentina did not make a claim
under Article 8 or Annex C(1). Id. at 622.96. SPS Agreement, supra
note 14, art. 8.97. Id. annex C(1) (a).
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Panel agreed.The Panel began by clarifying the boundary line
between an
"undue delay" and a justifiable delay. It concluded that the
lengthof the delay was not itself a dispositive factor and that the
reasonfor the delay was critical to the analysis. 98 The Panel
noted thatthere was no formulaic approach that could calculate
whether adelay was "undue" in every situation, but rather a
case-by-caseanalysis would generally prove necessary. 99 With
regard to thepresent dispute, the Panel identified two fundamental
reasonsbehind the delay in GMO product approvals: (1) the
perceivedinadequacy of EC approval legislation in force from June
19991" toAugust 2003 and (2) the evolving nature of scientific
informationon GMO products and the desire to adopt a prudent
andprecautionary approach. 1 The Panel found neither
rationaleconvincing. The Panel noted that if it allowed the EC to
halt itsapproval process pending improved legislation, it would in
effectbe allowing the EC "to use procedural delay as a substitute
for asubstantive risk management measure... that would not
beimposable under existing approval legislation." The result
ofapproving such a course of action would be to allow members
toavoid their substantive SPS Agreement obligation to conduct
riskassessments and instead to use procedural delay as an
instrumentto control risks. 10 2 In regard to the second rationale,
the Panelnoted that it perceived "no inherent tension" between the
SPSAgreement's proscription of undue delay and a Member
State'sdesire to approach GMO product approval with prudence. 0 3
ThePanel did note, however, that there was a limit to the
compatibilitybetween adopting a precautionary approach and avoiding
delay. Itstated that "if a Member could endlessly defer substantive
decisionson the grounds of a perceived need for caution and
prudence inthe assessment of applications, Annex C(1) (a), first
clause, wouldbe devoid of any meaning or effect." 104 It further
emphasized the"core obligation" under the SPS Agreement of members
to come to
98. Panel Report, supra note 3, at 629.99. Id.100. June 1999 was
the date that the Group of Five declared their authority to bring a
halt
to the approval process.101. Panel Report, supra note 3, at
632-35.102. Id. at 634.103. Id. at 635.104. Id.
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E. C. -Biotech Dispute
decision on applications. 05To test whether the general de facto
moratorium had actually
resulted in an "undue delay," the Panel considered the
approvalprocedure for MS8/RF3 oilseed rape, a product used for
animalfeed and for the production of vegetable oil.'0 6 The Panel
foundthat the moratorium did indeed lead to an "undue delay" in
theapproval procedure for MS8/RF3 oilseed rape, and thus the EChad
breached its obligations under Annex C(1) (a) and Article 8 ofthe
SPS Agreement. 0 7 With respect to product-specific measures,the
Panel found that the EC had breached its duty to avoid unduedelay
under Annex C(1) (a) and Article 8 of the SPS in twenty-fourof the
twenty-seven measures challenged by the complainingparties. 10s
C. Application of Safeguard Measures by EC Member States
The Panel found all nine of the challenged member-statesafeguard
measures to be inconsistent with the requirements of theSPS
Agreement.'O In each case, the Panel found the safeguardmeasures
not to be based on a risk assessment, as Article 5.1 of theSPS
Agreement mandated."" The Panel further concluded that
theprovisional safeguard measures that would have been allowedunder
Article 5.7 of the SPS Agreement if there had beeninsufficient
evidence to conduct a risk assessment wereinappropriate in the
current situation. In each case mentioned bythe Complaining
Parties, the Panel concluded that sufficientscientific evidence on
which to conduct a risk assessment had beenavailable."' The Panel
also discussed claims in the alternative madeby Canada and
Argentina that, should the national safeguardmeasures not fall
within the scope of the SPS Agreement, theywould nevertheless
violate the provisions of TBT Agreement. The
105. Id.106. Id. at 637.107. Id. at 646.108. Id. at 1034-35.109.
These measures include Austria's safeguard measures with regards to
Bt-176 maize
and MON 810 maize; France's safeguard measures with regards to
MSI/RF1 oilseed rapeand Topas oilseed rape; Germany's safeguard
measures with regards to Bt-176 maize;Greece's safeguard measures
with regards to Topas oilseed rape; Italy's safeguard measureswith
regards to T25 maize, MON 810 maize, MON 809 maize, and Bt-11
maize; andLuxembourg's safeguard measures with regards to Bt-176
maize. Id. at 835-1024.
110. Id.111. Id.
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COLUMBIAJOURNAL OF ENVIRONMENTAL LAW
Panel noted that since each safeguard measure represented in
itsentirety an SPS measure within the meaning of Annex A(1) of
theSPS Agreement, each measure should be assessed within the
SPSAgreement framework. 112 Thus, under Article 1.5 of the
TBTAgreement, which states that "[t]he provisions of this
Agreementdo not apply to sanitary and phytosanitary measures as
defined inAnnex A of the Agreement on the Application of Sanitary
andPhytosanitary Measures,"1l 3 the Panel concluded that it need
notaddress the alternative claims of Canada and Argentina." 4
ThePanel disposed of the GATT Article 111(4) claims of Canada
andArgentina with the same reasoning; since the national safeguards
atissue fell within the scope of the SPS Agreement, in the interest
ofjudicial economy there was no need to resolve the
alternativeargument. "1
5
III. ASSESSMENT
The Panel explicitly noted the issues that it did not address in
thecourse of its opinion. These unresolved issues included
whetherbiotech products were indeed safe, whether biotech products
were"like" their conventional counterparts, 6 and whether
Directives90/220/EC and 2001/18/EC and Regulation (EC) 258/97
wereconsistent with the EC's WTO obligations. " 7 The Panel
did,however, come to several critical conclusions with regards to
issuesit chose to address. First, the Panel noted that
Directives90/220/EC and 2001/18/EC and Regulation (EC) 258/97
wereindeed SPS measures and thus came within the ambit of the
SPSAgreement."" The Panel's decision, which interpreted the
SPSAgreement to include a variety of health and environmental
risks,represented a broader application than many had foreseen."
9
112. Id. at 1026.113. TBT Agreement, supra note 14, art.
1.5.114. Panel Report, supra note 3, at 1026.115. Id. at 1028.116.
If biotech products were "like" conventional couterparts, then they
could be
protected from measures designed to discriminate between GMO and
"like" non-GMOproducts under GATT Article 111:4.
117. Panel Report, supra note 3, at 1030.118. Id. at 1031.119.
SeeJacqueline Peel, A GMO by any other Name.. . Might be an SPS
Risk!, 17 EUR.J. INT'L
L. 1009, 1011 (2006). The Panel itself referred to a background
paper on the SPSAgreement, which had been cited by the EC, in which
the negotiators of the agreementstated that "[m]easures for
environmental protection, per se... are not covered by the
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Some commentators had argued that environmental risks
felloutside of the scope of the SPS Agreement altogether so long
asthey do not involve direct injury to animal or plant life or
health asa result of pest or disease.120 The Panel, however, placed
greatweight on a broad construction of the phrase "animal or plant
lifeor health" and noted that the phrase was intended to
be"comprehensive in coverage" and was meant to include wild
floraand fauna. 121 By including wild plant and animal life within
thescope of the SPS Agreement, the Panel largely brought
generalenvironmental concerns within the ambit of the SPS
Agreement.Thus, many domestic regulations with the purpose of
protectingthe environment that could arguably fall within the scope
of theTBT requirements, or even the requirements of the GATT,
maynow be framed as SPS measures. While the TBT Agreement andGATT
provisions focus primarily on the discriminatory effects ofcertain
measures on trade, the SPS Agreement requires a moredemanding
inquiry as to the scientific justification for theregulation.' 22
The Panel's interpretation brings into the SPSframework regulations
that are, as Jacqueline Peel notes, "linkedonly indirectly to the
introduction of GMOs into the environment"and "may have
far-reaching effects for the area of sanitary andphytosanitary
(SPS) risks management, and environmentalregulation more
generally."'2 3 Such an expanded mandate for theSPS Agreement could
lead future complainants to attempt to framea broad range of claims
in SPS terms in order to benefit from theSPS Agreement's relatively
demanding requirements with regard toprecautionary measures.
As noted above, the Panel concluded that the EC had applied
ageneral de facto moratorium to approval of GMO productsbetween
June 1999 and August 2003.124 Because the moratoriumwas procedural
in nature rather than a substantive measure, thePanel found that it
did not qualify as an SPS measure within themeaning of the SPS
Agreement even though the underlying
proposed Agreement." Panel Report, supra note 3, at 334.120. See
Peel, supra note 119, at 1016. Peel notes that this was the
position advanced by
the EC. See Panel Report, supra note 3, at 334.121. Id. at
337.122. SeePeel, supra note 119, at 1011.123. Id.124. Panel
Report, supra note 3, at 1031.
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COLUMBIAJOURNAL OF ENVIRONMENTAL LAW
legislation had qualified. 125 The moratorium did,
however,represent an "undue delay" within the meaning of Article 8
andAnnex C of the SPS Agreement. 12 6 Thus, the Panel's decision
dealtsolely with the application of EC approval procedures and did
notcome to a conclusion about the legality of the approval
proceduresthemselves. As a report by the Center for
InternationalEnvironmental Law stated, "nothing in the Interim
Reportindicates that the EC will have to make changes to its
current GMOlegislation."
1 2 7
In terms of product-specific measures, the Panel determined
thatthe EC's measures were not inconsistent with the requirements
ofArticles 5.1 (and consequently, Article 2.2), 5.5 (and
consequently,Article 2.3), 5.6, and Annex B(1) (and consequently,
Article 7).8The Panel also concluded, however, that there was an
"unduedelay" and, therefore, a breach of Article 8 and Annex C of
the SPSAgreement with regard to twenty-four of the
twenty-sevenapplications identified by the complaining parties. 29
The Panelfurther concluded that the national safeguard measures
taken by anumber of EC members violated the EC's obligations under
theSPS Agreement. 30 The Panel found that in all cases the
relevantscientific information had been sufficient to perform a
riskassessment and, therefore, that Member States should not
havebeen permitted to seek recourse in provisional measures
underArticle 5.7 of the SPS Agreement. In its report, the Panel did
notrule out adoption of future safeguard measures by EC
memberstates. It did, however, limit the scope of precautionary
action fordomestic SPS measures to circumstances where relevant
scientificinformation is insufficient to conduct a risk
assessment.1 32 Becausemuch of national and international
biotechnology regulation isprecautionary in nature and seldom fully
supported by risk
125. Id.126. Id.127. Bernasconi-Osterwalder & Oliva, supra
note 87, at 52.128. Panel Report, supra note 3, at 675-86. As with
the general moratorium, the Panel
again concluded that the suspension of consideration of
particular applications did not itselfrepresent an SPS measure
within the meaning of the SPS Agreement. Id.
129. Id.130. Id. at 1031.131. Id. at 1032.132. This is in
keeping with Article 5.7 of the SPS Agreement. Peel notes that this
is
considered to be a "fairly weak" form of the precautionary
principle. See Peel, supra note119, at 1017.
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E. C.-Biotech Dispute
assessment data, such regulations will likely be vulnerable to
WTOchallenge under a stronger SPS Agreement.
33
The Panel found that, because the EC had approved a
relevantbiotech product application after the inception of the
dispute, ithad, in effect, brought an end to the de facto
moratorium onapproval for GMO products. The Panel therefore
refrained frommaking any recommendations on the matter of the
general defacto moratorium. 31 With regard to the product-specific
measuresthat the Panel found to violate Article 8 and Annex C(1)
(a) of theSPS Agreement, the Panel recommended that the
DisputeSettlement Body "request the European Communities to bring
therelevant product-specific measures into conformity with
itsobligations under the SPS Agreement." 35 The Panel made
anidentically-worded recommendation to the Dispute SettlementBody
in regard to the national safeguard measures that it found
toviolate Articles 5.1 and 5.7 of the SPS Agreement.1
36
IV. CONCLUSION
The Panel's report has created more questions with regard toWTO
jurisprudence than it has resolved. At the same time that
itdisposed of the complaining parties' claims on largely
technicalgrounds, and avoided a decision on whether EC biotech
measureswere valid under WTO jurisprudence, the Panel engendered
abroad and powerful interpretation of the SPS Agreement. Havingbeen
given such an extensive scope in the EC-Biotech InterimPanel
Report, it appears that the SPS Agreement has now becomeapplicable
to issues far beyond the traditional sanitary andphytosanitary
realm of preventing the spread of exotic pests andprotecting
consumers from contaminants or toxins in importedfood material. 3 7
With its demanding requirements for SPSmeasures and now a broadened
mandate, the SPS Agreementappears increasingly likely to surface on
the WTO scene as thepremier instrument for attacking disputed
health andenvironmental protection measures in the global trade
arena.
133. Id. at 1025.134. Panel Report, supra note 3, at
1033-34.135. Id. at 1036.136. Id.. at 1044.137. Peel, supra note
119, at 1014.
2007]