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International food markets and the slow global uptake of GM seeds
by Prof. Robert Paarlberg,
(Tuesday, Aug. 27, 2002 -- CropChoice news) --Genetically modified (GM) foods are widely produced in the United
States and in two other Western Hemisphere countries (Argentina
and Canada) but almost nowhere else. In most other wealthy
industrial countries, including Europe and Japan, it is legal for
farmers to plant these crops, but they voluntarily refrain from
doing so because consumers are averse to eating GM. In most
developing countries it is not yet legal for farmers to grow GM
foods, nominally on biological safety grounds. Yet biosafety is
not the real issue. Poor countries are now trying to stay
"GM-free" so as to retain the option of exporting food to Europe
and Japan.
New regulations now coming into force in the EU, regulations on
the labeling and traceability of imported GM foods and feeds,
will only increase the potential cost to exporters of planting GM
seeds. When these regulations come into effect some time in 2003,
all foods in the EU or entering the EU from abroad will have to
be labeled "GM." This new labeling rule will apply to processed
as well as unprocessed foods, and to animal feeds as well as
foods for direct human consumption. In order to avoid a "GM"
label, products will have to be 99.5% free of any GM ingredients,
even if those GM ingredients have been approved as safe for human
consumption by European regulators. Moreover, for foods that are
labeled GM, each separate GMO in those foods will now have to be
"traced" through the market chain with documentary records, a
regulation which could require – for exporting countries that
plant GM seeds – costly new investments in the physical
segregation and identity preservation of GM versus non-GM foods,
all the way from "farm to fork."
European farmers will have little trouble conforming to these new
regulations because they do not plant GM seeds Farmers and
government officials in countries that export to the EU will face
problems, however, if they are planting GM seeds or were
intending to begin planting GM seeds. In countries that are
currently GM-free, these new regulations are a commercial reason
to remain GM-free. In the United States, where GM seeds are
widely in use, these new EU regulations are a major commercial
threat; they place an estimated $4 billion worth of U.S. farm
exports to Europe at risk. EU officials have admitted there is no
scientific evidence of greater risks to human health or the
environment associated with any of the GM foods currently
approved for the European market, so trade policy officials in
the United States could credibly challenge these new EU
regulations as violations of the SPS and TBT agreements of the
WTO. Yet this course of action is unlikely to succeed, for two
reasons. First, the WTO is no longer the sole international
agreement governing trade in GMOs. Trade in living GMOs (LMOs)
is also governed now by the new Cartagena Biosafety Protocol, an
agreement which gives importers greater freedom to restrict
trade, even without a scientific demonstration of risk. Second,
the new EU regulations on labeling and traceability will be
regulations of the EU Parliament as well as the EU Council, under
the new "co-decision" procedure in place under the 1993 Treaty of
the EU. Once a food safety policy has been endorsed by the EU
Parliament, it is unlikely to be altered by outside pressures
from the United States or the WTO. The United States learned this
lesson when it recently tried to use the WTO to challenge an EU
ban (which had been endorsed by the EU Parliament) on hormone
treated beef. The United States won this case in a WTO dispute
settlement body, but the EU refused to lift the ban, opting
instead to meet its WTO obligations by accept trade retaliation
against an equivalent value of its own agricultural exports to
the Untied States.
In a world without agreed or enforceable rules to govern trade in
GM products, it will be the big importers (such as the EU and
Japan) that will, by default, set the trade standards that
exporters will have to follow. In commodity markets the customer
is always right, and Europe and Japan are the biggest customers.
The EU and Japan together purchase more than $90 billion worth of
agricultural products from the rest of the world every year. If
customers in the EU and Japan say they do not want GM, and if
governments in the EU and Japan then use their sovereign power to
impose restrictions or onerous labeling and traceability
requirements on GM imports, it will be the exporters – if they
want access to these lucrative markets – who will have to adjust.
For exporting countries that are currently GM-free, particularly
in the developing world, the easiest adjustment to make will be
to remain GM-free.
We thus see that international markets are not always a force
favoring the rapid spread of powerful new technologies.
References Commission of the European Communities. (2001).
'Proposal for a Regulation of the European Parliament and of the
Council Concerning Traceability and Labeling of Genetically
Modified Organisms and Traceability of Food and Feed Products
Produced from Genetically Modified Organisms and Amending
Directive 2001/18/EC'. COM(2001) 182 final, Brussels, Belgium.
Paarlberg, R. (2001). The Politics of Precaution: Genetically
Modified Crops in Developing Countries. Baltimore, Maryland, USA:
Johns Hopkins University Press.
David Vogel. (2001). 'Ships Passing in the Night: The Changing
Politics of Risk Regulation in Europe and the United States'. EUI
Working Papers RSC No.2001/16. Dan Domenico, Italy: European
University Institute. | |
