European Affairs

Spring 2003

 

Opinions
A Trade War over Biotechnology Would Be a Big Mistake
By Tony Van der haegen

 

In the current troubled geopolitical environment, we must not allow politicaldivisions in the Atlantic alliance to contaminate the U.S.-EU trade relationship,now worth $1 billion a day. In particular, it would be a huge mistake to conducta trade war over biotechnology that could jeopardize the future of the entirebiotech industry.

The United States is considering taking legal action in the World Trade Organizationagainst the so-called EU moratorium on approvals of new genetically modified organisms(GMOs), which it claims constitute an illegal barrier to trade. There are threereasons why Washington should not take such a step.

A U.S. complaint to the WTO could lead to a backlash among EU consumers againstAmerican products; it could threaten the future of the European biotech industry;and it would be pointless now that the standstill in the approvals process ison its way out. In a few months’ time the European Union is likely to adoptnew legislation on the traceability and labeling of food products, as a resultof which the standstill will come to an end.

The European Commission and a number of member states have come out in favor ofbiotechnology, in spite of the suspicion European consumers still feel about biotechfood.

This increasing awareness of the standstill’s negative impact on EU industry,combined with legislative efforts to restore consumer confidence and a resumptionof the internal approval process of GMOs in the Commission, have created significantmomentum toward the adoption of new approvals. This progress should not be destabilizedby a case in the WTO.

The distrust of GM products originated with a series of European food crises thatundermined consumer confidence, especially in the regulatory system. It was perhapsan unfortunate coincidence that GM foods were first introduced to the Europeanmarket at the height of the crisis over BSE (“mad cow” disease).

Consumer confidence was further eroded by scare-mongering by tabloid newspapersand certain non-governmental organizations. At the same time, industry employeda poor marketing strategy: besides bad timing, the first wave of GM agriculturalproducts benefits the farmer but offers no clear, tangible advantage to the consumer.

The mismanagement of the “mad cow” crisis by some national governments,and the resulting consumer panic, created a need for an EU-wide response –namely, the creation of a new European Food Safety Authority (EFSA) and a newEU regulatory framework for food safety. This was proposed in 2000 in the Commission’sWhite Paper on Food Safety, of which the guiding principle is that food safetypolicy must be based on a comprehensive, integrated and science-based approach.

For food safety issues in general, and GM foods in particular, there is a crucialneed to regain consumer confidence. Until recently, the European Union had an outdated,patchwork and cumbersome body of food legislation, which was not good at dealingwith food or animal feed crises. It is worth remembering that feed contaminationwas at the root of the majority of recent European food crises.

The latest Eurobarometer opinion survey of consumer attitudes toward biotechnology,published by the Commission in March, suggests that Europeans continue to distinguishbetween different applications of biotechnology. The poll shows general approvalof applications such as genetic testing, the cloning of human cells to help treatdiseases such as Parkinson’s and the production of enzymes to make detergentsless damaging to the environment. A majority of Europeans, however, still disapproveof GM crops and foods, which they believe to be risky for society without bringingany benefits.

Europeans, however, are not against new technology. Robert Zoellick, the U.S.Trade Representative, was wrong to describe Europeans as “Luddites,”as he did recently. The great majority of Europeans think that telecommunications,computers and information technology, the Internet, solar energy and mobile telephoneswill improve our way of life over the next 20 years. But food is different.

About 70 percent of Europeans have confidence in doctors, university scientists,consumer organizations and patients’ organizations, according to the Eurobarometerpoll, which was based on a representative sample of 16,500 respondents in all15 member states. Fewer than 50 percent, however, expressed confidence in theirown governments and in industry, demonstrating how hard it is for governmentsto educate the European citizen about biotech.

Respondents were asked if they would buy or consume GM foods if they containedfewer pesticide residues, were more environmentally friendly, tasted better, containedless fat, were cheaper, or were on the menu in a restaurant. In each of thosecases, more Europeans said they would not buy or eat GM foods than that they would.It is true, of course, that what people say and what they do are sometimes ratherdifferent. Nevertheless, the survey indicates that while most Europeans are infavor of medical applications of biotechnology, they are still skeptical of agriculturaland food-related biotechnology.

Such resistance is seriously slowing down biotech research and development inthe European Union, particularly in the private sector, and may endanger Europe’scompetitiveness in this promising sector of new technology, according to a recentstudy. The number of applications for field trials of GM organisms in the EuropeanUnion has fallen by 76 percent since 1998. In the whole of Europe in 2002 therewere only 44 field trials, compared to 2,300 in the United States.

Research into GM organisms has also seriously suffered. The study found that 39percent of respondents had canceled research and development projects on GM organismsover the last four years. The proportion was even higher in the private sectoralone, where 61 percent of respondents had canceled projects.

This is why the European Commission’s paper, Life Sciences and Biotechnology,which has been endorsed by both the Council of Ministers and the European Parliament,strongly argues that EU member states need to act to ensure the survival of theEuropean biotechnology industry. The paper says that Europe should stop heapingsuspicion on biotechnology.

Biotech applications, of course, go beyond agricultural biotech and also includepharmaceutical, industrial and environmental uses. The Commission, however, isconcerned about the detrimental impact the attitude of European consumers, andthe absence of new authorizations in agricultural biotech, has had on the Europeanbiotech industry and European competitiveness as a whole. A flight of companiesand a brain drain from Europe urgently need to be reversed.

According to Commission figures, by 2010 the biotechnology industry will accountfor $2 trillion worth of worldwide business. But in Europe jobs are being lostand thousands of potential new jobs are being jeopardized.

The fear of GM food and the resulting pressure from public opinion induced fivemember states to block the approval process for GM food products in October 1998.These governments said they were willing to resume the approval process only ifnew legislation were adopted on traceability and labeling.

That is why the Commission came up with a new directive setting out rules forauthorizing the deliberate release of live GM organisms into the environment,which was adopted in October 2002. A particularly important change is the introductionof mandatory labeling and traceability at all stages of bringing a product tomarket, as well as mandatory environmental monitoring. Two pending draft legislativeproposals flesh out the traceability and labeling requirements.

In the Council of Ministers of Agriculture in January, ten member states explicitlyasked the Commission to defer all pending applications for GM food and feed untilthe two new regulations enter into force. In other words, the standstill in theapproval process will disappear soon, since the draft regulations will probablybe adopted before the end of the year.

Nevertheless, like the precautionary principle, traceability seems to be a loadedterm for some U.S. policy makers and regulators. Some, in fact, even refuse toacknowledge that “traceability” is a word in the English language.Like it or not, however, traceability is here to stay. The concept is likely togain ground in the United States, too, for example in such areas as the fight againstbioterrorism and country-of-origin labeling requirements.

“Traceability” is legally defined as “the ability to trace thehistory, application or location of an entity by means of recorded identifications”.The objectives are:

• To facilitate targeted withdrawals of products should an unforeseen riskto human health or the environment be established.

• To monitor the potential effects of specific products on the environmentover ten years.

• To control and verify labeling claims.

All foods, whether pre-packaged or not, are already subject to extensive labelingrequirements under existing EU legislation. The aim of the new proposal on labelingis to inform consumers of the exact nature and characteristics of the food, soas to enable them to make individual choices. Animal feed will also have to belabeled, but the labels will usually be seen only by the importer (in the caseof imports) and by the farmer.

The purpose of labeling is not to inform the consumer whether a food is safe ornot – it is not a warning. If a food is unsafe, it cannot be placed on themarket. The current EU labeling system requires GM foods and seeds to be labeledif traces of DNA or protein resulting from genetic modification are detectablein the final product. Labeling is not required, however, for products, such asmeat and eggs, that come from animals fed with GM feed.

Now that the internal EU approval procedure has restarted, four GM organisms couldbe ready for final approval by July at the earliest, with others to follow in Septemberor October. This would more or less coincide with final adoption of the labelingand traceability legislation, allowing member states to put an end to the standstill.

It would not be in the U.S. interest to interrupt this progress by launching aWTO case, considering that we are nearing the end of the tunnel and that the approvalprocess has restarted vigorously. Such an action by the United States would notonly cause a significant setback to consumer confidence, but it might lead alsoto a more general backlash by European consumers. Europeans would see U.S. recourseto the WTO as an attempt to force unwanted American food down their throats.

The consequence might be to stigmatize GM food and feed even more profoundly,killing GM food in Europe for years to come. In the light of the strong Europeanfeelings about the U.S. decision to go to war in Iraq, the worst-case scenariocould be an EU boycott of U.S. products.

Another consideration is that the WTO should not be forced to make decisions onthe legitimacy of measures that reflect societal choices, which could undermineits credibility in the eyes of the public.

Equally, a further, possibly fatal setback to the European biotech industry wouldclearly not bode well for the industry as a whole. Biotech would be perceivedas being a U.S. monopoly, which would be a mistake. That is why the survival ofthe EU biotech industry is important from a global perspective.

As for the future of GM food in Europe, I am convinced that with good food legislationin place, the scares will gradually go away. If, in addition, the biotech industrycomes up with new products that have a real and clear added value for the consumer,Europeans will come to accept them.

Tony Van der haegen is Minister-Counselor for Agriculture, Fisheries and Consumer Affairs at the Delegation of the European Commission in Washington. He is responsible for consumer affairs, food safety, and in particular, biotechnology. He previously served in the Commission's Directorate-General for Health and Consumer Protection in Brussels from 1990 to 2000, and was Head of the Department's International Relations Unit dealing with consumer policy, food safety and Codex issues starting in 1995.