USTR - U.S. Trade Representative Susan Schwab and U.S. Agriculture Secretary Mike Johanns Announce Favorable Ruling in WTO Case on Agricultural Biotechnology
                 
The Office of the United States Trade Representative

U.S. Trade Representative Susan Schwab and U.S. Agriculture Secretary Mike Johanns Announce Favorable Ruling in WTO Case on Agricultural Biotechnology
09/29/2006


WASHINGTON
- U.S. Trade Representative Susan C. Schwab and Agriculture Secretary Mike Johanns today announced that the World Trade Organization (WTO) has ruled in favor of the United States, Argentina, and Canada in their WTO case against the European Union (EU) over its illegal moratorium on approving agricultural biotech products and unjustified EU member - state bans of previously approved products.

"The WTO has ruled in favor of science-based policymaking over the unjustified, anti-biotech policies adopted in the EU," Ambassador Schwab said. "After eight years of legal wrangling and stalling by Europe, we are a step closer to clearing barriers faced by U.S. agricultural producers and expanding global use of promising advances in food production."

The United States brought a WTO challenge in May 2003, after five years of delays by the EU in complying with WTO rules as well as its own procedures and the recommendations of its own scientists. The WTO report issued today is the longest in the history of the WTO.

"Today’s decision affirms what the world’s farmers have known about biotechnology for many years," Johanns said. "Since the first biotechnology crops were commercialized in 1996, we’ve seen double-digit increases in their adoption every single year. Biotechnology crops not only are helping to meet the world’s food needs, they also are having a positive environmental impact on our soil and water resources. Farmers who grow biotechnology crops in 21 countries around the world, including 5 in the EU, stand to benefit from today's decision."

In addition to the EU’s across-the-board moratorium on product approvals, the WTO case challenged product bans imposed by six EU Member States (Austria, France, Germany, Greece, Italy, and Luxembourg) on seven of the biotech crops approved by the EU prior to the adoption of the moratorium. In each case, the panel upheld the United States’ claims that, in light of positive safety assessments issued by the EU’s own scientists, the Member State bans were not supported by scientific evidence and were thus inconsistent with WTO rules.

Although the EU approved a handful of biotech applications following the initiation of the case in 2003, the EU has yet to lift the moratorium in its entirety. Some biotech product applications have been pending for 10 years or more, and applications for many commercially important products continue to face unjustified, politically-motivated delays.

"I urge the EU to fully comply with its WTO obligations, and consider all outstanding biotech product applications, and evaluate their scientific merits in accordance with the EU’s own laws, without undue delay," Schwab added.

Despite the EU’s moratorium, there is considerable support for agricultural biotechnology within the EU. The United States looks forward to working with European trading partners to enhance the availability of this technology to farmers and consumers throughout the world.

Agricultural biotechnology promotes economic development, and has delivered on its promise to feed a hungry world, increase product yields, reduce pesticide use, improve nutrition and disease prevention, enhance food security, and increase incomes of farmers—most of whom are in the developing world. Agricultural biotechnology is a continuation of the long tradition of agricultural innovation that has provided the basis for rising prosperity for the past millennium.

Numerous organizations, researchers and scientists have determined that biotech foods pose no threat to humans or the environment. These include the French Academy of Sciences, the 3,200 scientists who cosponsored a declaration on biotech foods, and numerous scientific studies – including a joint study conducted by seven national academies of science (the National Academies of Science of the United States, Brazil, China, India, and Mexico, plus the Royal Society of London and the Third World Academy of Sciences).

Worldwide use of biotech crops has continued to grow. About 222 million acres were planted with biotech crops in 2005, up from 200 million acres in 2004. Of this, over one-third was in developing countries. Biotech crops were grown by approximately 8.5 million farmers in the same year, with about 90 percent from developing countries.

Leading producers of biotech crops include the United States, with approximately 123 million acres under cultivation in 2005, followed by Argentina, with 42 million acres; Brazil, with 23 million acres: Canada, with 14 million acres; and China, with 8 million acres. Other countries growing biotech crops include India, Iran, Philippines, Australia, South Africa, Paraguay, Uruguay, Colombia, Honduras, Mexico, Czech Republic, Romania, Portugal, Spain, France, and Germany.

Background:

Since the late 1990s, the EU has pursued policies that undermine agricultural biotechnology and trade in biotech foods. First, six member states (Austria, France, Germany, Greece, Italy and Luxemburg) banned biotech crops approved by the EU, and the EU Commission refused to challenge the illegal bans. After October 1998, the EU adopted an across-the-board moratorium under which no biotech application was allowed to reach final approval. This moratorium has caused a growing portion of U.S. agricultural exports to be excluded from EU markets, and has unfairly cast concerns about biotech products around the world, particularly in developing countries.

In May 2003, the United States, Argentina, and Canada took the first step in the WTO dispute by requesting consultations with the EU. The consultations did not result in a resolution of the dispute. In August 2003, the United States, Argentina, and Canada requested the establishment of a dispute settlement panel. Over the three-year course of the dispute, the disputing parties submitted hundreds of pages of briefs and dozens of factual exhibits. The panel also called upon a slate of six independent scientific experts, who submitted hundreds of pages of materials and spent two days with the panel and the parties to opine on scientific issues related to the dispute. The result is a comprehensive panel report of over 1,000 pages in length, with additional hundreds of pages of annexes. The report is publicly available on the WTO website, www.wto.org. In addition, the submissions of the United States in the dispute are publicly available on the USTR website here.

Under WTO rules, the panel report will be adopted by the WTO membership within sixty days, unless one or more of the disputing parties decides to initiate an appeal. If the report is appealed, the WTO Appellate Body will issue its report within approximately 90 days of the appeal.

The WTO Agreement on Sanitary and Phytosanitary Measures (SPS) recognizes that countries are entitled to regulate crops and food products to protect health and the environment. The WTO SPS Agreement requires, however, that members have sufficient scientific evidence for their SPS measures and that they operate their approval procedures without "undue delay." Otherwise, there is a risk countries may without justification use such regulations to thwart trade in safe, wholesome, and nutritious products.

Before 1999, the EU approved nine agriculture biotech products for planting or import. It then adopted a moratorium under which no applications were allowed to reach a final decision. The WTO Panel report issued today upholds the claims of the United States, Argentina and Canada that the EU had adopted a moratorium on approvals from 1999 through August 2003 (when the case was initiated); that the moratorium was not justified by any valid scientific or regulatory concerns; and thus that the moratorium violated the EU’s WTO obligations to consider product applications without "undue delay."