[Gen-Streitfall] Fwd: [wtogmo] Info: GM trade dispute deadline extended to June 2005

[Cornelia Reetz]

BRIDGES Weekly Trade News Digest - Vol. 8, Number 38  10 November, 2004

DSU UPDATE: GMOS, BEEF HORMONES

GMO dispute deadline extended again

In a statement dated 2 November, the WTO panel hearing the challenge by
the US, Argentina and Canada against the EC's de facto moratorium on the
approval of genetically modified organisms (GMOs) postponed its issuance
of the final report from March 2005 until June 2005. According to the
panel, the delay -- the third since the inception of the dispute -- is
due to the time-consuming process of identifying and selecting experts,
and, more importantly, a joint request by all four parties that they be
granted additional time to prepare further submissions to the panel.
This development comes against the backdrop of recent reports that the
EC will be persuading five member states, targets of the GMO case, to
lift their bans on four GM varieties of corn and rape seeds meant for
cultivation, import and processing, which have been approved by the EC.
Furthermore, on 26 October, the EC approved Monsanto's 'Roundup Ready'
maize for human consumption and market sales, leading critics to point
out that this action was motivated by pressure from the case (see
BRIDGES Trade BioRes, 5 November 2004,
http://www.ictsd.org/biores/04-11-05/story3.htm).

The panel announced the first delay in the case on 26 August, when it
indicated that it would seek expert advice on technical and scientific
issues raised in the dispute. Shortly before this, the panel had
postponed the timing of its final report from September this year until
March 2005 (see BRIDGES Weekly, 1 September 2004,
http://www.ictsd.org/weekly/04-09-01/wtoinbrief.htm). Trade observers
had predicted that the scientific hearings could result in further
delays, mirroring an earlier case against the EC involving a ban on
imports of beef raised with growth hormones (see below).

EC challenges US on beef hormones, tax law amendment

In a press release issued on 8 November, the EC announced it had
initiated a WTO dispute against the US and Canada, challenging their
continued imposition of sanctions against EC exports in retaliation
against an EC ban on beef containing growth-promoting hormones found to
be WTO-inconsistent in a dispute dating from 1997. The crux of the EC's
complaint was that these sanctions, in place since 1999, were
unjustified because the EC had effectively complied with the WTO ruling.
In the words of EU Trade Commissioner Pascal Lamy, "there is no reason
why European companies should continue to be targeted by sanctions when
they export to Canada and the US. The EC ban on certain growth promoting
hormones is now in full respect of our international obligations. We
have put in place revised legislation based on a thorough and
independent scientific risk assessment."

A WTO panel -- and subsequently the Appellate Body -- ruled in 1997 and
1998 respectively that the EC ban on beef hormones was not based on a
proper scientific risk assessment and that the supporting scientific
evidence was insufficient. Since the ruling, the EC has sought to prove
that it has fixed those errors by basing a new directive that entered
into force in October 2003 on a scientific risk assessment (see BRIDGES
Weekly, 13 November 2003,
http://www.ictsd.org/weekly/03-11-13/story3.htm).

According to the EC's press release, apart from refusing to lift the
sanctions, Canada and the US had also refused to avail themselves of a
special WTO dispute settlement process meant to resolve compliance
problems. Under WTO dispute settlement rules, both countries could have
requested a WTO panel to examine the compliance measures taken by the
EC. On this issue, Lamy noted: "if Canada and the US disagree with the
EC measures, they should suspend their sanctions and refer their
apparent disagreement to the WTO as the EC has done recently in the FSC
case".

In the Foreign Sales Corporations (FSC) case initiated by the EC, WTO
panels had ruled that the US maintained illegal tax exemptions for
certain US corporations located abroad. On 22 October, the US President
adopted a new law that repealed the former WTO-inconsistent FSC
legislation (see BRIDGES Weekly, 27 October 2004,
http://www.ictsd.org/weekly/04-10-27/WTOinbrief.htm#2). As highlighted
by the EC in its press release, the EC has now initiated compliance
proceedings in the WTO regarding aspects of the new FSC law that it
still has concerns with and "has indicated its readiness to suspend
sanctions while dispute settlement proceedings are ongoing".

While compliance proceedings -- such as those initiated by the EC in the
FSC case -- normally require the panel to issue a ruling within 90 days,
the timeframe for regular panels to deliver their decisions, such as in
the beef hormones dispute, is six to nine months. Trade observers have
noted that taking into account the probability of a subsequent appeal
process, the EC's new beef hormones challenge could drag on beyond 2006.

The EC's press release, IP/04/1345, is available at:
http://europa.eu.int/rapid/pressReleasesAction.do?reference=IP/04/1345&f
ormat=HTML&aged=0&language=en&guiLanguage=en

ICTSD reporting; "EU to WTO: U.S., Canada Sanctions Illegal",
Reuters.com, 8 November 2004; "EU Challenges U.S., Canada Retaliation
for Beef Ban", Bloomberg, 8 November 2004; "EU to Seek WTO Ruling
Requiring U.S. To Lift Sanctions in Beef-Hormone Dispute", WTO Reporter,
9 November 2004.

-- 
Alexandra Wandel
Trade and Sustainability Programme Co-ordinator
Friends of the Earth Europe
15, rue Blanche
B-1050 Brussels- Belgium
http://www.foeeurope.org, http://www.foei.org, http://www.bite-back.org

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STOP THE EU FROM BACKING DOWN ON GM FOOD UNDER WTO PRESSURE. Write to your
Environment Minister today, demanding them to vote NO! on proposals by the
European Commission to end national bans on risky GM food! Email your
minister at http://www.bite-back.org