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The three main WTO agreements of relevance to the domestic regulation of biotechnology and biosafety are the GATT, the TBT Agreement, and the SPS Agreement.
1. GATT:
GATT disciplines govern all products traded between WTO members, including GMOs. The central disciplines in the GATT are contained in Articles I, III, and XI. Under GATT Article I (most favoured nation), any advantage, favour, privilege, or immunity offered by any member to any product originating in, or destined for, any other country shall be accorded immediately and unconditionally to the like product originating in, or destined for, the territories of all other members.
Article III (national treatment) prohibits measures that directly or indirectly discriminate between like products on the basis of their country of origin. Article XI (quantitative restrictions) forbids WTO members from instituting or maintaining prohibitions or quantitative restrictions on the importation of products from another WTO member (through quotas, import licences, or other measures).
Measures that are found to violate Article I, III.4, or XI may qualify for an exception under GATT Article XX. The member defending the measure bears the burden of provisionally justifying it under one of the policy objectives enumerated in the subparagraphs of Article XX.
These subparagraphs include measures that are necessary for the protection of “human, animal or plant life or health” (Article XX(b)) or, under certain conditions, are related to the conservation of natural resources (Article XX(g)) or are necessary to protect public morals (Article XX(a)). Under the “chapeau” of Article XX, the member must then also demonstrate that the measure is not being applied in an arbitrary or unjustifiable manner or as a disguised restriction on trade.
2. TBT Agreement:
The TBT Agreement covers all products traded between WTO members, including GMOs. However, it applies only to particular kinds of trade -related measures. TBT covered measures include technical regulations, voluntary standards, and conformity assessment procedures, which are based upon product characteristics.
TBT measures include “marking or labelling requirements as they apply to a product, process or production method” compliance with which is mandatory. They can, however, also include import prohibitions or exceptions to these prohibitions when these measures are based on product characteristics.
WTO members must ensure that technical regulations are not more trade restrictive than necessary to fulfill a legitimate objective, including (but not limited to) protection of human health or safety, animal or plant life or health, or the environment.
WTO members should use relevant international standards, where they exist, as a basis for their technical regulations unless these standards are inappropriate to fulfill the legitimate objectives pursued, for example, because of fundamental climatic or geographical factors or fundamental technological problems. Conformity with international standards creates a rebuttable presumption that the technical regulation does not create an unnecessary obstacle to international trade.
Given the important role of international standards in the TBT Agreement, it promotes participation in the work of international standardizing bodies. Relevant international bodies are not specifically identified in the agreement but are defined as bodies or systems whose membership is open to the relevant bodies of at least all WTO members.
Transparency provisions in the agreement require WTO members to notify other members of proposed technical regulations that may have a significant effect on international trade either when there are no relevant international standards or when the proposed regulation is not in accordance with existing relevant international standards. A number of measures related to GMOs have been notified to the TBT Committee under this provision.
3. SPS Agreement:
The SPS Agreement elaborates rules for the application of the provisions of GATT 1994, which relate to the use of sanitary or phytosanitary measures, in particular, the provisions of Article XX (b). Any measure found consistent with the SPS Agreement will be presumed to conform to the GATT.
The SPS Agreement was developed during the Uruguay Round negotiations in the context of negotiations on agriculture. Its origin was a proposal by the United States in 1989 to amend Article XX (b) of the GATT to require measures to protect human, animal, or plant life or health to be consistent with sound scientific evidence and to recognize the principle of equivalency.
The United States had also proposed the establishment of a special working group on sanitary and phytosanitary measures within the Negotiating Group on Agriculture. Kennedy notes that the agreement was designed to ensure that the dismantling of barriers to agricultural trade, through the Agreement on Agriculture, was not undermined by the imposition of new protectionist SPS measures. The SPS Agreement applies to the development and application of all sanitary and phytosanitary measures that may, directly or indirectly, affect international trade.
SPS measures are defined in the agreement in such a way that not all measures relating to the regulation of GMOs would necessarily be covered.
An SPS measure is any measure applied:
i. To protect animal or plant life or health within the territory of the member from risks arising from the entry, establishment, or spread of pests, diseases, disease-carrying organisms, or disease-causing organisms;
ii. To protect human, animal, or plant life or health within the territory of the member from risks arising from additives, contaminants, toxins, or disease-causing organisms in food, beverages, or foodstuffs;
iii. To protect human life or health within the territory of the member from risks arising from diseases carried by animals, plants, or products thereof or from the entry, establishment, or spread of pests; or
iv. To prevent or limit other damage within the territory of the member from the entry, establishment, or spread of pests.
WTO members have the right to take SPS measures that are necessary for the protection of human, animal, or plant life or health, provided that such measures are not inconsistent with the provisions of the SPS Agreement. The agreement recognizes the right of members to establish their own “acceptable level of protection,” but it requires that the application of measures to achieve this level of protection must otherwise be consistent with the agreement.
In addition, a member must avoid arbitrary or unjustifiable distinctions in the levels of protection it considers to be appropriate in different situations, if such distinctions result in discrimination or a disguised restriction on international trade.
Members are to ensure that any measure taken is:
(a) Applied only to the extent necessary to protect human, animal, or plant life or health;
(b) Based on scientific principles; and
(c) Not maintained without sufficient scientific evidence, except as provided for in paragraph 7 of Article 5.
SPS measures must not arbitrarily or unjustifiably discriminate between members where identical or similar conditions prevail, and they must not apply such measures in a manner that would constitute a disguised restriction on international trade. In order to satisfy this requirement, the SPS Agreement requires members to base their SPS measures on international standards, guidelines, or recommendations where they exist.
Where such standards, guidelines, or recommendation do exist, measures that conform to those standards shall be deemed to be necessary to protect human, animal, or plant life or health, and rebuttable presumed to be consistent with the relevant provisions of the agreement and of the GATT.
The standards, guidelines, and recommendations of the Codex Alimentarius (food safety), the IPPC (plant health), and the International Office of Epizootics (animal health and zoonoses) are explicitly mentioned in this regard. However, the existence of international standards, guidelines, or recommendations does not prevent a member from introducing or maintaining measures resulting in a higher level of protection if there is scientific justification.
In order to establish the scientific basis for any SPS measure, a member is required to carry out a risk assessment that takes into account “available scientific evidence; relevant processes and production methods; relevant inspection, sampling and testing methods; prevalence of specific diseases or pests; existence of pest or disease-free areas; relevant ecological and environmental conditions; and quarantine or other treatment.”
The SPS Agreement recognizes that governments will sometimes have to apply measures in situations where full scientific certainty is not available. In this regard, Article 5.7 provides that in cases where relevant scientific evidence is insufficient, a Member may provisionally adopt sanitary and phytosanitary measures on the basis of available pertinent information, including that from the relevant international organisations as well as from sanitary and phytosanitary measures applied by other Members.
In such circumstances, Members shall seek to obtain the additional information necessary for a more objective assessment of risk and review the sanitary and phytosanitary measure accordingly within a reasonable period of time. The SPS Agreement also provides some scope for considering economic factors in applying SPS measures.
Under Article 5.3, in assessing the risk to animal or plant life or health and determining the measure to be applied for achieving the appropriate level of sanitary or phytosanitary protection from such risk, members shall take into account as relevant economic factors:
1. “The potential damage in terms of loss of production or sales in the event of the entry, establishment or spread of a pest or disease;
2. The costs of control or eradication in the territory of the importing member; and
3. The relative cost-effectiveness of alternative approaches to limiting risks.”
As in the TBT Agreement, transparency provisions require members to notify changes in their SPS measures. A number of measures related to GMOs have been notified. A Committee on Sanitary and Phytosanitary Measures has been established under the agreement as a regular forum for consultations.
Agreement on Agriculture:
The Agreement on Agriculture, which was negotiated during the Uruguay Round, marked a more concerted attempt than in the past to apply GATT disciplines to agricultural products. Moreover, it provides one of the few spaces within the WTO where issues of food security and other non-trade concerns are explicitly debated and thereby integrated, to a limited extent at least, into the objectives and provisions of the agreement.
The Agreement on Agriculture focuses upon commitments of members to reduce support and protection in the areas of market access (through tariffication), domestic support, and export subsidies. While the agreement makes provision for the special and differentiated treatment of developing countries and contains special provision for least developed and net food- importing countries, it has been the subject of significant criticism by developing countries.
The bargain struck on the Agreement on Agriculture during the Uruguay Round essentially addressed concerns of the United States and the European Community (EC), as well as other large agricultural exporting countries. The agreement is presently under review, and developing countries have been active in submitting proposals for its revision.
The agreement recognizes certain non-trade concerns, including food security and the need to protect the environment. Developing countries have put forward proposals related to food security in the present review.
These have included the creation of a food security or development “box,” which is designed to address food security as the “paramount non-trade concern.” One question that perhaps arises is whether and how the concerns being raised in the Agreement on Agriculture negotiations can be more effectively integrated into other areas of the WTO.
During the review of the Agreement on Agriculture, some WTO members have also sought to introduce additional issues into the negotiations of relevance to the regulation of modern biotechnology. In particular, the EC proposed within the Agreement on Agriculture negotiations to clarify the application of the precautionary principle in relation to food safety, labelling with respect to production and processing of agricultural products, and environmental protection measures.
Some advocates of addressing food safety within the agriculture negotiations have argued that members should not rely on dispute settlement rulings but should use the negotiations to clarify such issues, taking existing dispute settlement reports into account. Other members have expressed the view that these issues fall under the SPS Agreement, which is not subject to specific negotiations in the present round, or that they are within the purview of the Committee on Trade and Environment (CTE).
Special and Differential Treatment:
The WTO agreements incorporate provisions on the special and differential treatment (S&DT) of developing and least developed countries.
These generally take the form of:
1. Time limited derogations, that is, longer transition periods, more favourable thresholds for undertaking certain commitments, and greater flexibility with respect to certain obligations; and/or
2. Clauses providing for specific, though undefined, action by developed countries under certain agreements, in their relations with developing countries.
In relation to the SPS and TBT Agreements, S&DT provisions include the possibility for the SPS and TBT Committees, respectively, to grant specified time-limited exceptions to developing countries from obligations under the agreements, taking into account their financial, trade, and development needs.
Where possible, longer time frames for compliance with new SPS measures should be accorded on products of interest to developing country members so as to maintain opportunities for their exports, and members should take account of the special development, financial, and trade needs of developing country members with a view to ensuring that technical regulations and standards do not create unnecessary obstacles to exports from developing country members.
The TBT Agreement recognizes that developing country members should not be expected to use international standards that are not appropriate to their development, financial, and trade needs and that such member may adopt technical regulations or standards aimed at preserving indigenous technology and production methods and processes compatible with their development needs.
Both agreements promote the participation of developing countries in international standard-setting processes. Developing countries, in particular India, have raised serious concerns about the extent to which developed countries are implementing their S&DT obligations.
Negotiations on S&DT are taking place in the Committee on Trade and Development under the Doha Ministerial Declaration mandate. The ministerial declaration that was adopted at Doha reaffirms that S&DT provisions are an integral part of the WTO agreements. Negotiations are reviewing all S&DT provisions with a view to strengthening them and making them more precise, effective, and operational.
While concerns expressed by developing countries have largely concerned market access for their exports, the S&DT provisions might also provide some scope for justifying differential national measures imposed by developing countries to regulate imports.
Dispute Settlement:
The WTO agreements are subject to mandatory and binding dispute settlement under the dispute settlement understanding (DSU). The dispute settlement system is designed to be a central element in providing security and predictability to the multilateral trading system, by providing a mechanism for the prompt settlement of situations in which a member considers that any benefits accruing to it directly or indirectly under the covered agreements are being impaired by measures taken by another member.
In such circumstances, a member may request another member to enter into consultations and notify the dispute settlement body (DSB) of this request. If consultations fail to settle the matter, the complaining member may request the establishment of a panel to examine the matter.
A panel must be established, unless the DSB decides otherwise by consensus. The DSU also provides for a system of appellate review, by a standing Appellate Body. Rulings of the Appellate Body (and un-appealed panel decisions) are automatically adopted by the DSB, unless there is consensus against adoption. The DSU provides for the surveillance of implementation of rulings and recommendations.
In the event that a ruling or recommendation is not implemented within a reasonable period of time, the DSB may authorize the complaining member to suspend the application to the other member concerned of concessions or other obligations under the covered WTO agreements.
This suspension may extend not only to concessions in the sector and under the agreement that is the subject of the dispute, but also, in certain circumstances, to “cross-retaliation” that is, the suspension of concessions in other sectors and under other covered agreements.
While compensation is also mentioned as a potential remedy in the DSU, the most effective mechanism, namely the suspension of concessions, would, of course, be particularly persuasive where the complaining member is an economically powerful state. The DSU contains its own “special and differential treatment” provisions.
In particular, members are to exercise restraint in raising matters under the DSU that involve a least developed country member and in requesting compensation or seeking authorization to suspend concessions.
Particular consideration must be given to the special situation of least-developed countries in all stages of the determination of the causes of a dispute and of dispute settlement procedures involving least- developed country member. And special efforts to resolve a matter must be attempted before the establishment of a panel is sought.
In addition, the WTO Secretariat must make available a qualified legal expert from the WTO technical cooperation services to any developing country member that so request. However, this assistance must be provided in a manner that ensures the continued impartiality of the Secretariat.
In recognition of the limitation of this provision, a Law Advisory Centre has been recently established to provide legal assistance to developing countries engaged in WTO disputes. The WTO dispute settlement system contrasts starkly with the dispute settlement procedures available under the Biosafety Protocol, which, are largely non-mandatory and non-binding, as well as with the IPPC procedure, which can address technical aspects of disputes in a non-binding manner.
In effect then, a dispute between two parties to the Biosafety Protocol, or perhaps more significantly between a party and a non-party, over a trade measure relating to a GMO, could well end up being determined by a WTO panel and/or the Appellate Body. This possibility caused serious concern during the Protocol negotiations, as States sought to agree on language to address the relationship between the Biosafety Protocol and the WTO.
It is especially significant since the largest exporter of GMOs, the United States, is likely to remain a non-party to the Protocol for some time to come, but is, at the same time, an active user of the WTO’s dispute settlement system.
In common with other judicial bodies, the significance of the WTO dispute settlement system lies not only in its resolution of specific disputes between members but also in its interpretation of WTO rules, giving rise to the de facto evolution of WTO disciplines.