New Era, or ‘Ancien Régime,’ for European Biotech?

New Era, or ‘Ancien Régime,’ for European Biotech?

May 08, 2006

The long-awaited World Trade Organization (WTO) decision on biotech food is due to be released this spring, but a leaked copy of the report has already elicited considerable buzz.  Most analyses score it a resounding victory for the United States and its co-complainants, and a stinging defeat for European state protectionism.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

 

The reality is that the decision is only a partial and largely symbolic victory. For not achieving a more complete and meaningful success, the United States, Canada, and Argentina, which jointly filed the complaint, have their own excessively risk-averse policies to blame.

 

Significantly, the WTO decision bluntly scolds the European Union (EU) for denying it had imposed a moratorium on biotech food approvals from 1998 to 2004. But that finding was a foregone conclusion. Until the WTO case was filed, European politicians freely admitted that a moratorium existed.

 

Anti-biotechnology activists hailed the moratorium as a sign of European moral superiority, and in 2001, then-EU Environment Commissioner Margot Wallström acknowledged that the moratorium was “an illegal, illogical, and otherwise arbitrary line in the sand.” When it came time for their WTO defense, however, the Europeans actually denied that a moratorium had ever existed. Fortunately, the WTO decision acknowledges the EU’s illegal practices—and the disingenuousness of the EU’s defense.

 

The WTO decision also makes clear that existing national bans on certain biotech foods in Austria, France, Germany, Greece, Italy, and Luxembourg blatantly violate those countries’ treaty obligations. When the United States filed its initial complaint in 2003, European politicians insisted that the move was unnecessary. EU Trade Commissioner Pascal Lamy boasted, “We are confident that the WTO will confirm that the EU fully respects its obligations.” But then, as now, the European Commission (EC) was unable to persuade its rogue members to conform to EU policies. The fact that those national bans all remain in effect argues in favor of intervention by the WTO.  (Ironically, the current WTO Director General is none other than Pascal Lamy.)

 

The most important victory for the United States and its partners is the WTO’s judgment that the EU failed to abide by its own regulations by “unduly delaying” final approval of otherwise complete applications for 25 food biotech products. The culprit here is the European Commission’s highly politicized, two-stage approval process: Each application must first be cleared for marketing by various scientific panels, and then voted on by elected politicians.

 

Significantly, the WTO assumed that “the conclusions of the relevant EC scientific committees regarding the safety evaluation of specific biotech products” were valid.  That is, the trade panel did not object to how the biotech products were reviewed. Although all 25 product applications had been approved by EU scientists, the EU Regulatory Committees and Council of Ministers—for transparently political reasons rather than concerns about consumer health or environmental protection—repeatedly refused to sign off on the final approvals.

 

But the safety of biotech foods is not really in doubt.  The technology has been endorsed by dozens of scientific bodies around the world, including the French Academies of Science and Medicine, the UK’s Royal Society, U.S. National Academy of Sciences, American Medical Association, and many others. And, in 2003, EU Commissioner for Health and Consumer Affairs David Byrne acknowledged that currently marketed biotech crop varieties pose no greater food safety or environmental threat than the corresponding non-biotech varieties.

 

The good news, then, is that the WTO chastised the European Union for failing to follow its own regulatory rules. The bad news is the absence from the panel report of any condemnation of those rules themselves, in spite of the fact that they are blatantly unscientific and in clear violation of trade treaties enforced by the WTO.

 

Under the various WTO-enforced treaties, member countries are free to enact any level of environmental or health regulations they choose, with the stipulations that: 1) every so-called sanitary or phyto-sanitary regulation must be based on the results of a risk analysis showing that some legitimate risk exists; and 2) the regulation must bear a proportional relationship to that risk.

 

Every risk analysis performed by countless scientific bodies around the world has shown that the splicing of new genes into plants, per se, introduces no incremental risks. Even a 2001 report summarizing the conclusions of 81 different EU-funded research projects spanning 15 years concluded that, because biotech plants and foods are made with highly precise and predictable techniques, they are at least as safe, and often safer, than their conventional counterparts.

 

Not only is there no proportional relation between regulation and risk in the EU’s biotech policies, there is actually an inverse relationship between degree of risk and amount of regulatory scrutiny. This is both absurd and illegal.

 

It is disappointing that the WTO did not condemn the clearly illegitimate European policies, but the WTO’s actions were limited by the fact that the complainants did not challenge them.

 

How can that be? Simple: The United States, Canada, and Argentina didn’t challenge those policies because they use the same flawed basic approach as the EU. Their regulations all discriminate against biotech products by subjecting them—and only them—to a stringent, pre-market approval process.  Just like the EU, these countries have disregarded the same scientific consensus that what matters for health and safety assessments are the characteristics of new plant varieties, not the process by which they were developed.

 

Compulsory case-by-case review and costly field test design requirements have made biotech plants disproportionately expensive to develop and test, with no added safety benefit. In the United States, for example, these needless regulatory hurdles can add several million dollars to the development costs of every biotech plant variety—an amount that exceeds the total expected revenue stream for all but the biggest commodity crops. Getting approval in enough other countries to make the biotech varieties legally exportable can add tens of millions of dollars more.

 

It’s no wonder, then, that the United States and its partners didn’t mount a broader challenge to EU policies. They would have been laughed out of Geneva for challenging a regulatory approach not fundamentally different from their own.

 

Still, the European regulations are far more discriminatory and debilitating than those in the United States, Canada, and Argentina. For example, the EU now requires those few biotech foods that are allowed on the market to be labeled in such a way that every ingredient can be traced back to the farm on which it was grown. This is hugely expensive, utterly gratuitous, and—except for stigmatizing food that contains gene-spliced ingredients—accomplishes nothing.

 

In the end, however, it is unlikely that the WTO’s slap on the wrist will induce any major change in EU policy. At a “background” briefing on February 8, EU officials lashed out at the WTO decision, but explained that, “It is nevertheless clear, beyond any doubt, that the EU will not have to modify its [biotechnology] legislation and authorization procedures.”

 

Even if the EU does approve some of the 25 pending biotech products, few companies are likely to risk the tens of millions of dollars in regulatory costs to pursue new ones. Even worse, the less developed nations of Asia, Africa, and Latin America, which once anticipated that food biotechnology could provide them a brighter and more self-sufficient future, will continue to be shut out of the important European market by policymakers’ callous obstructionism.

 

The limitations of the WTO decision are not the fault of the organization, of course, but of regulatory policies worldwide that defy science and common sense. The only winners from such wrong-headed public policy are European and other government regulators and anti-technology activists, who rejoice at excessive and debilitating regulation. The biggest losers are the rest of us, who systematically will be denied access to safer, more nutritious, and affordable foods.