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The Sanitary and Phytosanitary Agreement of the World Trade Organization: Debunking Its Reliance on Scientific Evidence and Reluctance to Endorse Potential Biotechnology Risks

Published online by Cambridge University Press:  24 May 2021

Muhammad ISLAMOpen the ORCID record for Muhammad ISLAM[Opens in a new window]
Muhammad ISLAM*
Affiliation:
Emeritus Professor, Macquarie Law School, Macquarie University, Sydney, Australia; email: rafiqul.islam@mq.edu.au.
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Abstract

The World Trade Organization (WTO) Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) relies on scientific evidence as a conclusive risk assessment criterion, which ignores the inherent limitations of science. This article highlights certain trade-restrictive effects of scientific evidence and comments on the Agreement’s aversions to precautionary measures and the consumer concern of the harmful effects of biotech products that may be necessary to protect public health and biosecurity in many WTO Member States. These measures and concerns have become pressing issues due to surging consumer awareness and vigilance concerning environmental protection and food safety. The Agreement is yet to overcome the weaknesses of its endorsed international standardising bodies, the problematic definition of scientific evidence and treatment of justification for scientific risk assessment methods and the implementation difficulties faced by most developing states. This article analyses these issues under the provisions of the Agreement and the interpretations of the WTO Dispute Settlement Body in disputes involving SPS matters, which fall short of addressing scientific uncertainty surrounding biotech products and their associated risks.

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European Journal of Risk Regulation , Volume 12 , Issue 3: Special Issue on Biotechnology in International Economic Law and Human Rights , September 2021, pp. 547 - 563
Copyright
© The Author(s), 2021. Published by Cambridge University Press

The minimisation of growing risks to public health, safety and the environment has become a prime global concern. States are entitled to adopt sanitary measures to mitigate risks to human and animal health and phytosanitary measures to protect plant health. The World Trade Organization (WTO) Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) prescribes this risk management based ostensibly on scientific evidence. Such exclusive reliance on risk determination through scientific assessment, though it appears intuitively appealing, has questionable validity. The WTO Dispute Settlement Body has shown its reluctance to endorse the potential risk of biotechnology to public health. The SPS Agreement also militates against the legitimate trading rights and economic interests of many developing WTO members for want of their scientific and technological advancements comparable to that of developed members.

I. Introduction

Each state is entitled to adopt quarantine measures to protect its public health and safety. Sanitary measures mitigate risks to human and animal health arising from additives, contaminants, toxins and disease organisms in foods and drinks. Phytosanitary measures protect plant health from environmental impacts. The SPS measures can also have serious trade-restrictive implications. It was the mitigation of trade-restrictive effects, not the protection of public health and safety, that engineered the SPS Agreement in the General Agreement on Tariffs and Trade (GATT) Uruguay Round in 1986–1990. Its fully scientific evidence-based risk management strategy, though it appears intuitively sound and appealing, has questionable validity in certain circumstances. The use of biotechnology also can have marginalising effects on biosecurity. Such an absolute reliance on science and a reluctance to foresee the threats of biotech risks undercutting public health, safety, biosecurity and environmental protection in many countries. It particularly impairs the public and economic interests of many developing WTO Member States due to their less advanced scientific and technological levels and reduced risk management capacities compared to those of developed Member States.

This article argues that the unqualified reliance of the SPS Agreement on scientific evidence as a conclusive benchmark of risk assessment is not free from the inherent limitations of science. It highlights the trade-restrictive effects of scientific evidence in certain situations and critically comments upon its aversion to precautionary measures and consumer concerns regarding the harmful effects of biotech products that may be necessary to protect public health, safety and biosecurity in many WTO Member States, developing and developed alike. These measures and concerns have become pressing issues for the SPS Agreement as a result of surging consumer awareness and vigilance concerning environmental protection and food safety. The Agreement is yet to overcome the weaknesses of its endorsed international standardising bodies, the problematic definition of scientific evidence and treatment of justification for scientific risk assessment methods and the implementation difficulties faced by most developing Member States. This article analyses the requirements of scientific evidence under the Agreement and the views advanced by the WTO Dispute Settlement Body (DSB) in disputes involving SPS matters. It predominantly covers the following issues:

  1. (1) The limitations of scientific evidence in real-life situations.

  2. (2) The susceptibility of scientific risk assessment to manipulation.

  3. (3) The reasons for aversion to precautionary measures to prevent, and the consumer concern of, the harmful effects of biotech products that may be necessary to protect public health and safety in WTO Member States.

  4. (4) The precautionary measures against potential risks to biosecurity may not be gainsaid in the face of scientific uncertainty.

  5. (5) Scientific evidence as the sole risk determinant militates against the legitimate trading rights and economic interests of developing WTO Member States.

The SPS Agreement appears to suggest that it seeks to strike a balance between the right to protect human, animal and plant life and health and the need to avoid unnecessary barriers to international trade. However, operationally it is essentially a trade-liberalising rather than a public health protection instrument.Footnote 1 The DSB has looked at the potential risks of biotechnology through the lens of the SPS Agreement. Working within the SPS structure of not being trade restrictive, the DSB has purported to rely on the current scientific certainty to justify its decision. Through this process, it retains the WTO narrative of a science-based trading discipline and avoids present scientific uncertainty surrounding biotech products and their potential associated risks.

II. SPS measures in international trade

A domestic product may be given veiled protection by resorting to quarantine measures as a means of discriminating against and excluding the same or like products from foreign countries. It is difficult to draw a qualitative distinction between protectionist SPS measures and welfarist SPS measures, as the latter may also be trade restrictive incidentally. Striking an appropriate balance between disciplining the former and allowing the latter has underpinned the need for their orderly governance by protecting rightful uses and preventing the abusive application of SPS measures.

In the Uruguay Round, the USA and the European Commission (EC) pressed for the option to apply higher national SPS standards than those of some standard-setting international organisations. The Cains Group of agriculture-exporting countries, headed by Australia, opposed the US/European Union (EU) move by arguing that such national flexibility would defeat harmonisation. On 20 December 1991, the GATT Director General presented his own draft, called the Dunkel Draft. The final text of the SPS Agreement approved at the end of the Uruguay Round was largely based on the Dunkel text without any serious cost–benefit analysis and debate over the science-based risk assessment requirement.Footnote 2

1. SPS purpose and standard

The Agreement emphasises the need to improve the human and animal health and phytosanitary situation in all Members by ensuring food safety and animal and plant health regulations. Each WTO Member has the right to adopt and enforce any SPS measures necessary to protect human, animal or plant life or health provided that these measures are not arbitrary, discriminatory and/or hidden barriers to trade (Article 2:1). The Agreement recognises the value of international standards for the harmonisation of SPS measures and prescribes CODEX for food safety, Epizootics for animal safety and the International Plant Protection Convention 1951 for plant safety (Article 3:4). It aims to assist developing countries, which encounter special difficulties in complying with the SPS measures of importing countries, in market access and in devising and applying SPS measures in their own territories. Such assistance is technical in nature in the form of technology processing, conducting research and building infrastructure such as help establishing national bodies for the regulation of SPS measures (Article 9).

2. Scientific evidence

All SPS measures are to be based on scientific principles and not to be maintained without sufficient scientific evidence (Article 2:2). The requirement of sufficient scientific evidence is intended to prevent arbitrary or unjustifiably discriminatory conduct relating to the application of SPS measures. The obligation of adherence to international standards propelled by scientific evidence in undertaking SPS measures became a contentious issue in the following dispute between the two most powerful members of the WTO.

In EC – Measures Concerning Meat and Meat Products (Hormones) (Beef Hormone dispute), both the USA and Canada have been disputing with the EC on the safety of growth-promoting hormones used in cattle since 1996. The US red meat industry has used hormones since 1970 to enhance the growth and fattening rate of animals to save farmers time and money. By contrast, the EC has restricted both the use of hormones in its domestic meat industry and the imports of hormone-treated meat and meat products into its market since 1981. Eventually, the EC banned the sale and import of growth hormone-treated beef into its market on 1 January 1989. The ban included six growth hormones, both natural and synthetic, which seriously restricted US and Canadian beef meat exports to the EC market. CODEX, the international food safety standard body, maintains standards for five of the six hormones mentioned in the dispute. According to CODEX, these five growth hormones have no adverse effects on human health. The USA maintained that its hormones have been thoroughly tested in scientific studies and evaluations, which found no risk to human health, and hence considered the EC ban as arbitrary without any scientific justification.

The EC declined to withdraw the ban on two grounds: (1) that the long-term health effects of hormone-treated beef were uncertain and not scientifically determined conclusively yet, which warranted the consideration of a precautionary approach to potential risks; and (2) that the consideration, in addition to the available scientific evidence, of environmental and consumer concerns for potential public health risk was in order. In other words, the EC argued that it should be allowed to take precautionary measures on the face of scientific uncertainty and that its consumers had expressed strong preference to eat hormone-free meat. It also raised animal health/husbandry issues of artificially fattening animals faster than their natural growth in support of its ban. This stand-off position led the USA and Canada to contest the ban separately in the WTO on 26 April 1996 with requests for the establishment of Panels to adjudicate and declare the EC ban as inconsistent with the SPS Agreement.

The Panel was set up in May 1996 to hear both complaints. In its report issued on 18 August 1997, the Panel held that the EC ban was inconsistent with the EC obligations under the SPS Agreement. It rejected the EC’s invocation of the precautionary principle. In support of its finding, the Panel reasoned:

  1. (1) That the EC’s measures varied from the relevant existing international standards without scientific justification and therefore were not in conformity with the SPS Agreement;

  2. (2) That the EC failed to demonstrate that its measures were based on a risk assessment as required in Article 3(3) of the SPS Agreement and as such contravened its obligations under the Agreement; and

  3. (3) That the EC followed arbitrary distinctions on the level of sanitary protection in different situations, which rendered the ban discriminatory and a disguised barrier to trade.

The EC, however, attempted in vain to argue that its ban was non-discriminatory and was consistent with Article I (Most Favoured Nation (MFN) treatment) and Article III (national treatment) of GATT, as it applied to all domestic producers and exporters of meat who all agreed to supply hormone-free beef to the EC market. The USA argued that the ban was discriminatory and a form of thinly disguised protectionism to safeguard the EC beef industry, which is not as competitive as that of the USA despite the existence of high levels of EC domestic support for agriculture.Footnote 3

The EC appealed the Panel findings in the Appellate Body (AB). The AB released its report on 16 January 1998, modifying some of the Panel findings but still holding the EC ban as inconsistent, which should be brought into conformity with the SPS Agreement. It held that the CODEX international standards were not mandatory for the EC or any WTO Members, who could maintain a higher standard based on a risk assessment and scientific evidence as prescribed in Article 5 of the SPS Agreement. The EC was entitled to maintain food standards higher than those of the CODEX, but it failed to conduct a risk analysis and provide scientific evidence to meet its obligations under Article 5. This obligation could not be overridden by any precautionary measures because the international legal status of the precautionary principle was yet to be settled and the SPS Agreement contained no specific mention of this principle. The AB also found that all available scientific evidence, including that presented by the EC and experts consulted by the Panel, indicated that the hormones were safe for human consumption. The AB rejected the claim that the EC ban was discriminatory and a disguised protectionist measure.Footnote 4 The DSB adopted both reports on 19 February 1998.Footnote 5 The EC formally declared in the DSB meeting on 13 March 1998 that it would implement only the AB recommendations in as short a time as possible. The WTO arbitrator asked the EC to comply with the recommendations within fifteen months ending on 13 May 1999. The EC maintained that it could retain the ban subject to an adequate risk assessment based on scientific evidence but failed to meet the deadline, resulting in retaliatory arbitration.

Upon request from the USA and Canada, WTO arbitrators on 12 July 1999 determined that the EC ban caused a considerable loss for US and Canadian beef exporters and authorised the USA and Canada to suspend tariff concessions on EC imports into their markets. The annual value of the increased tariffs on imported products from the EC was US$116.8 million for the USA and C$11.3 million for Canada. The USA imposed 100% ad valorem duties on a number of EC products, which became effective on 29 July 1999. In May 2000, the EC proposed to maintain a definitive ban on the use of a particular hormone (estradiol) and a provisional ban on the five other hormones until complete scientific information became availability, which was adopted by the European Parliament on 22 September 2004. The EC claimed that this provisional ban would be in compliance with the AB ruling and requested WTO consultations with the USA and Canada in November 2004. At the DSB meeting on 7 November 2004, the USA and Canada rejected this claim on the basis that the EC claim was not scientifically substantiated and continued to maintain their WTO-authorised sanctions on EC products. Further Panels were established at the 17 February 2005 DSB meeting at the request of the EC to determine the legitimacy of the continued suspension of obligations by the USA and Canada. The EC had not lifted the ban, and USA and Canadian trade sanctions on EC products continued until the parties reached a Memorandum of Understanding on a mutually acceptable solution on the implementation of the DSB ruling on 13 May 2009, revised on 21 October 2013 and communicated to the DSB on 14 April 2014.Footnote 6

SPS measures may be applied temporarily in cases of insufficient scientific evidence pending the receipt of additional information necessary for a more objective assessment of risk (Article 2:2). The scope of insufficient scientific evidence may be broad enough to cover many situations where an international standard is yet to be developed, or where conflicting scientific views exist, or where the available information is inadequate. The application of this provision is problematic and complex.

The appropriate level of SPS measures must be determined scientifically and justified by scientific evidence. This strong emphasis on science seems to suggest that the Agreement assumes that the determination of SPS measures by scientists is unbiased and independent of economic influence. Seemingly it presumes that if science cannot detect and determine a risk, there is no risk, and that a science-based system ensures the depoliticised application of SPS measures. An importing member cannot raise a dispute against an exporting member, which justifies its position by relying on scientific evidence. This is an overreliance on science, which may not necessarily always be conclusive, objective and value-neutral. The reality is that much scientific data is missing, scanty or incomplete. Some chemicals and toxins can have a “gestation” period longer than that of a given scientific risk assessment method.Footnote 7

The possibility of transmission of bovine spongiform encephalopathy (BSE) through beef products from cattle infected with the disease is a case in point. By 1989, twelve EU countries had BSE-infected cattle. The EC took over five years to scientifically ascertain that BSE was transmittable even to humans when the first case of variant Creutzfeldt–Jakob disease (vCJD) was reported in the UK in 1994 and it imposed a ban on high-risk tissue-feeding practices to cattle. Following this ban, a prominent US university scientifically assessed the probability of transatlantic transmission of BSE to North America. It declared that even the presence of 500 BSE-infected cattle would not be sufficient to establish BSE infection in North America, which was discredited with the first cases of BSE being found in the USA and Canada in 2003.Footnote 8

The exclusive reliance on a science-based approach, though intuitively appealing and sound, may not be seen as a panacea for a universal apolitical safeguard against disputes over SPS measures. It was held by the AB in the Beef Hormones dispute that the CODEX international standard is not mandatory and WTO Members can resort to a scientifically established standard higher than that of CODEX. This enables scientifically advanced developed Members to apply and maintain advanced technology pertaining to SPS measures and to use them as non-tariff barriers to the importation of agricultural products, particularly from developing Members. Due to their lack of advanced science-based risk assessment capacity, developing countries cannot challenge the validity of SPS measures imposed on their exports by developed countries. Predicting how detrimental the importation of a foreign product would be on health or life in developing countries often involves the use of extremely costly technical and human resources that are necessary to employ science-based SPS measures. Given their financial limitations, it is exceedingly difficult for these countries to undertake the scientific studies and surveys necessary to apply justifiable SPS measures as importing countries in order to protect their public health.

The science-based risk determination requirement has imposed an excessively heavy burden on many developing countries, which in effect deter from seeking necessary SPS measures. It thus forces them to neglect the welfare of their people, animals and plants in the interest of promoting trade liberalisation. Article 9 calls upon WTO Members to merely “consider” providing technical assistance to most developing countries, which is an open-ended and lacklustre responsibility with no legal obligation whatsoever to provide technical assistance.Footnote 9 The promise of capacity-building technical support for developing countries in the Agreement turns out to be no more than a hollow commitment. The SPS Committee stressed that the special needs of and technical assistance to developing Members should focus on human resource development, national capacity-building, technology transfer and scientific information.Footnote 10 The Doha Ministerial Declaration 2001 echoed these sentiments, which led to the recent establishment of the Standards and Trade Development Facility (STDF), but the Doha Development Agenda is yet come to fruition.

The SPS measures are directed to protect public health within the importing country. An extra- jurisdictional interpretation of Article 2(2) is not supported by a plain reading of the provision and is indeed beyond its original intent.Footnote 11 The SPS Agreement clearly stipulates that the SPS “measure [is] applied to protect [human,] animal or plant life or health within the territory of the [importing] Member from risks arising from the entry, establishment, or spread of pests, diseases, and disease-carrying/causing organisms” (Annex A:1.a). The SPS measure within the territory of a Member has a limitation in terms of its cross-border application. These measures cannot be applied to prevent risks and/or damages to the environment, humans, animals or plants outside of the importing country, such as the killing of dolphins or endangered sea turtles in the harvesting of tuna or shrimp in exporting countries. This territorially limited, piecemeal approach militates against a holistic risk minimisation and management approach to safeguard global public health.

3. Risk assessment

Article 5 deals with the method of risk assessment, which is a scientific tool focusing on the probability, consequences and uncertainty of a risk. It also provides a means for the systematic characterisation of risk and its transparent management. WTO Members must apply their SPS measures based on a risk assessment undertaken pursuant to the method prescribed and level set by relevant international organisations and by taking into account all available scientific evidence (Article 5:1–2).

A long-standing controversial risk assessment technique that developed into a full-fledged dispute at the WTO was the ban on the importation of apples from New Zealand into Australia. This ban has been in force since 1921 due to the presence in New Zealand of the fire blight bacterial disease, a plant pathogen that is reportedly absent in Australia. The disease spreads via wind, rain, insects and birds, causing infected apple flowers to droop before becoming mature apples. Australia introduced this ban as a quarantine measure, which New Zealand saw as a trade barrier in disguise to protect the Australian apple industry in contravention of the SPS Agreement. New Zealand consistently contended that fire blight could not be transmitted through trade in mature apples. New Zealand referred to the available scientific evidence showing that the fire blight bacteria could infect only apple flowers, not mature apples, and to the relevant WTO ruling, which was rejected by Australia.

Apart from previous exchanges and negotiations on the issue between the governments, New Zealand sought permission to export apples to Australia in December 1995. Following its three-year investigations, the Australian Quarantine and Inspection Service (AQIS) determined on 10 December 1998 that the importation of apples from New Zealand could not be granted because mature apples might carry fire blight. AQIS also claimed that its determination was consistent with the rights and obligations of Australia under the SPS Agreement. New Zealand lodged a submission on 13 January 1999 asking Australia to determine the conditions under which New Zealand apples could be exported to Australia. Biosecurity Australia of the Department of Agriculture, Fisheries and Forestry prepared and published a draft import risk analysis (IRA) proposing conditions for the importation of New Zealand apples. Australia appointed a Risk Analysis Panel (RAP) in August 2001 to prepare a revised IRA. Biosecurity Australia released a revised IRA on 19 February 2004 recommending certain quarantine conditions for granting market access to New Zealand apples. According to the revised IRA, New Zealand apples must be individually inspected for fire blight and treated with a combination of chlorine bath and cold storage preservation for six weeks before shipment to Australia. Stakeholders were allowed to respond to the revised IRA by 23 June 2004. New Zealand responded by emphasising that there was negligible risk that mature apples in commercial trade would transmit fire blight and that the proposed conditions were overly stringent, unnecessarily onerous and scientifically unjustified.

Parallel to the IRA process, the Australian Senate Committee on Regional and Rural Affairs and Transport conducted investigations into the process and administration of Biosecurity Australia in relation to the drafting of the IRA for New Zealand apples in 2004. It eventually recommended that the ban be maintained. This recommendation was based on insubstantial scientific evidence that the fire blight bacteria could be transmitted through trade in mature fruits.Footnote 12 Australian lobby groups, particularly the Apple & Pear Growers Association and its Fire Blight Task Force, campaigned vociferously against Biosecurity Australia and its IRA and argued that the ban should continue. The Howard government decided immediately before the federal election to withdraw the IRA for New Zealand apples and restarted the process after completely overhauling Biosecurity Australia. By referring to the WTO ruling against Australia in the salmon caseFootnote 13 brought by Canada, it has been observed that Australia should have learned that “the SPS Agreement, backed by the WTO dispute settlement procedure, is capable of exerting very substantial discipline over the design and implementation of quarantine restrictions by WTO member countries”.Footnote 14 The Australian quarantine measures in this case represent an unfair trade practice in which the requirement of scientific evidence of risk assessment has been made subservient to politics and protectionist interests.

A compelling and pertinent WTO precedent on the issue of transmission of disease through trade in mature fruits is Japan – Measures Affecting the Importation of Apples (Japan – Apples).Footnote 15 The US challenged in 2003 the Japanese restriction on apple imports on quarantine grounds to prevent fruit diseases, including fire blight, from entering into Japan. The DSB held this ban to be unjustified under the SPS Agreement on the grounds that the scientific evidence suggests a negligible risk of possible transmission of fire blight through mature apple fruit. Japan has accepted the ruling. In this dispute, Australia joined Japan and New Zealand joined the USA – both as third parties. Australia maintained its ban on New Zealand apples notwithstanding the existence of this precedent. If this precedent is any guide, the Australian ban as a plant health protection measure appeared to be disproportionate to the risk involved under the SPS Agreement.

New Zealand lodged a complaint with the WTO SPS Committee in June 2005 against Australia for its unjustified apple ban, which ended up in the DSB. Apples represent the second largest (after kiwi fruit) horticultural export of New Zealand. For several decades, its apple industry has been a recognised major player in the worldwide trade in apples, marked by innovation and quality control. Its proportion of the apple trade by value has consistently exceeded its proportion by volume (around 14%), an indication that its apples are sold at a premium price in the world market for their superior quality.Footnote 16 New Zealand thought that the Australian ban was a trade barrier to protect its domestic apple industry from foreign competition and that political expediency had prevailed over scientific evidence that negated the justification of the ban. However, both the WTO Panel and the AB in 2010 held against the Australian SPS measures as trade protective and restrictive. The DSB was unwilling to endorse exceptional SPS measures unless they were indispensable for risk avoidance and clearly supported and justified by scientific evidence. On 13 September 2011, the parties informed the DSB that they had reached an understanding on agreed procedures under Articles 21 and 22 of the WTO Dispute Settlement Understanding to resolve the dispute.Footnote 17

4. Susceptibility of risks assessment to manipulation

The scientific evidence used must be sufficient to establish a risk. What is the degree of scientific endorsement required to establish a risk and render a measure legitimate? The AB in the Beef Hormones dispute held that measures do not have to be based on an assessment approved by mainstream science or a preponderance of scientific opinion.Footnote 18 This option may make the scientific justification requirement almost meaningless. A government can almost always find a qualified lone scientist or group of scientists who could find a risk in spite of mainstream scientific evidence finding no risk, and the former finding may well be sufficient to impose a ban. On the other hand, minority scientific views cannot be discounted outright. Divergent scientific views from competent and respected scientific sources may be sufficient:

The risk assessment could set out both the prevailing view representing the “mainstream” of scientific opinion, as well as the opinions of scientists taking a divergent view. Article 5.1 does not require that the risk assessment must necessarily embody only the view of a majority of the relevant scientific community. In some cases, the very existence of divergent views presented by qualified scientists who have investigated the particular issue at hand may indicate a state of scientific uncertainty.Footnote 19

The AB also underscored the need to establish a causal link between the risk and the risk- mitigating SPS measures. In other words, the result of the risk assessment must sufficiently support the SPS measures at stake. This rational relationship between a risk assessment and an SPS measure is a substantive requirement for applying SPS measures.Footnote 20 WTO Members often fail to determine this co-relationship in applying SPS measures.

The crucial issue that deserves consideration is the quality of the scientific methods and procedures through which the result is achieved, not how widespread is the support for that evidence. An objective assessment of risk in a given case may require a judgment as to the quality, accuracy and sufficiency of the scientific evidence, a task that the DSB performs with the help of expert opinions.

III. Precautionary measures

The SPS Agreement provides general guidelines that regulate the application of SPS measures with a view to ensuring that they are not misused for trade protectionist purposes. It is indeed a tool for trade liberalisation and facilitation. Its impetus came not from the protection of the welfare and safety of human, animal or plant life or health, but from the prevention of the protectionist use of SPS measures. It does not cover measures unrelated to trade, which means that any measures for the protection of the environment or consumer interests are generally beyond its scope. It limits the freedom of Members to adopt precautionary measures for the protection of their citizens and the environment against risks, regardless of their irreversible effects.

The fact is that full scientific certainty is neither achievable nor probable. Consequently, it may be possible to infer the presence of the precautionary principle within the ambit of Articles 3(3) and 5(7) in that with the presence of uncertainty or the absence of relevant information as to the effect of an imported product, precaution may be adopted and applied. The AB in the Beef Hormones dispute has explicitly endorsed that “the precautionary principle indeed finds reflection in Article 5.7 of the SPS Agreement”,Footnote 21 albeit subject to the condition that the obligations of a member under the SPS Agreement outweigh any right to apply the precautionary principle. The precautionary principle cannot be applied in a manner that is inconsistent with or repugnant to any provisions of the SPS Agreement. Despite this parochial approach of the AB, the general recognition of the precautionary principle in WTO law, which has consistently been recalcitrant on the issue, is a somewhat progressive development in WTO case law.

The application of a provisional SPS measure as a precaution in the face of uncertainty or insufficiency in scientific justification cannot carry on indefinitely. Such provisional measures were challenged in Japan – Apples, where the AB rejected the Japanese interpretation that Article 5(7) was applicable in “scientific uncertainty”. It drew a distinction between “scientific insufficiency” and “scientific uncertainty” and interpreted that Article 5(7) referred to the former, not the latter:

The application of Article 5.7 is triggered not by the existence of scientific uncertainty, but rather by the insufficiency of scientific evidence. The text of Article 5.7 is clear: it refers to “cases where relevant scientific evidence is insufficient”, not to “scientific uncertainty”. The two concepts are not interchangeable.Footnote 22

This interpretation has further narrowed the scope of the precautionary principle in international trade. This is presumably because the precautionary principle is susceptible to abusive application aimed at preventing competition from foreign products. The dilemma is how to distinguish between a genuinely precautionary and a prohibited protectionist use of SPS measures.

The SPS Agreement is based on the assumption that consumers always benefit from the removal of trade restrictions. This explains why it is silent on consumer lobbying for increased protection against the import of biotechnology. The EC attempted in vain to re-negotiate the SPS Agreement to permit trade restrictions in response to consumer concerns and preferences following the Beef Hormones rulings. It sought to enshrine the precautionary principle in the SPS Agreement in order to allow wide use of import bans and to place additional burdens of proof on foreign suppliers. Whether WTO Members are entitled to adopt these measures in response to their consumers’ health concerns was the subject matter in EC – Measures Affecting the Approval and Marketing of Biotech Products (Biotech Dispute), in which EC Members’ SPS measures pertaining to seven products containing genetically modified organisms (GMOs) have been contested.Footnote 23 The DSB ruling in this dispute has generated far-reaching consequences for the production and marketing of GMOs, particularly in foods.

The EU had placed a de facto moratorium on GMO foods in 1999 in response to its perception of the threat that GMO crops posed to its food safety, farming and the environment, and to concerns raised by its consumers.Footnote 24 The EU has a Food Safety Agency and strict labelling laws for GMO foods that allow consumers to choose between GMO and natural foods. This law has trade-restrictive impacts on US producers, who produce 80% of the world’s GMO crops. The USA regarded this law as unjustifiable and illegal under WTO rules and mounted a challenge at the DSB. In the Biotech Dispute, seven GMO-related measures of EC Members were contested. The dispute involved an examination of (1) GATT, which ensures non-discriminatory trade; (2) the SPS Agreement, which allows trade restrictions for food safety and animal and plant health if scientifically justified; (3) the Technical Barriers to Trade (TBT) Agreement, which combats unnecessary obstacles to trade in the name of technical standards and certification; and (4) the Agricultural Agreement, which reduces trade-distorting tariffs and subsidies on agricultural products.

The USA, Canada and Argentina brought the dispute on 14 May 2003 when they called for consultations, which failed almost immediately. The USA requested the establishment of a Panel on 8 August 2003. At the beginning of the dispute, the EC had lifted the moratorium and started to promote GMO products, despite substantial objections from its citizens. But the complainants argued

  1. (1) That EC imports of GMO crops and foodstuffs remained restrictive, as some EC members showed scepticism without any scientific basis;

  2. (2) That there were undue delays in assessing applications for marketing GMO foods, which hindered the development of a technology having great promise in reducing poverty and improving health worldwide;

  3. (3) That the scientifically unjustified EC stand would influence other countries to resist GMO products;

  4. (4) That opposition towards GMO products constituted protectionism that has been costing their producers heavily in lost sales; and

  5. (5) That GMO products should not be treated any differently from non-GMO products.Footnote 25

The EC responded by maintaining

  1. (1) That members should have the freedom to decide their acceptable level of risk;

  2. (2) That GMO foods were internationally known to possess properties that pose potential risks to human health and the environment;

  3. (3) That the environment and diet varied substantially across the world and an assessment that GMO foods were safe and acceptable in one country did not necessarily follow that they were safe and acceptable in every country; and

  4. (4) That GMO and non-GMO products were not “like” or “equivalent” products, as the former were fraught with potential new types of danger to human life and the environment.

The EC basically justified its SPS measures largely on the basis of the precautionary principle to safeguard human health, the environment and biodiversity.

A WTO Panel was established in March 2004 and its ruling entailed serious public policy implications. A ruling in favour of the USA had the prospect of

  1. (1) Serious impacts on growing consumer concerns for food safety reflected in the Cartagena Protocol on Biosafety to the Convention on Biological Diversity 2000 – it is the first legally binding global agreement giving its parties the right to reject GMO foods on the basis of the precautionary principle and the socio-economic effects of trade in GMO products;

  2. (2) Serving a warning to other members, particularly developing and least developed countries, not to ban or restrict trade in GMO products; and

  3. (3) Alienating citizens further from participation in the WTO process, which would compromise its public credibility.

A ruling in favour of the EC had the prospect of establishing

  1. (1) That GMO and non-GMO products would not be “like” or “equivalent”, but different products;

  2. (2) That any other Members would be free to distinguish GMO products from conventional non-GMO products in terms of imports, sale and the labelling requirements of GMO products for informed consumer choice; and

  3. (3) That a precautionary approach would be permissible under free trading rules in cases of potential risks of irreversible harm to human health and the environment.

Notwithstanding these public policy and trade-restrictive implications generating more controversies for the WTO, the final report of the Panel was circulated on 29 September 2006, which found

  1. (1) That the EC applied a general de facto moratorium on the approval of biotech products between June 1999 and August 2003 (when it was withdrawn);

  2. (2) That, by applying this moratorium as a product-specific measure, the EC had acted inconsistently with its obligations under the SPS Agreement (Article 8) because the de facto moratorium led to undue delays in the completion of EC approval procedures concerning twenty-four out of twenty-seven biotech products; and

  3. (3) That the EC acted inconsistently with its obligations under the SPS Agreement (Articles 5.1 and 2.2) with regard to all of the safeguard measures at issue, because these measures were not based on risk assessments satisfying the requirements of the SPS Agreement and hence could be presumed to be maintained without sufficient scientific evidence.

The EC agreed to comply with the ruling within a reasonable period, and on 14 January 2008, the EC and USA informed the DSB that they had reached an agreement on procedures under Articles 21 and 22 of the Dispute Settlement Understanding (DSU).

GMO foods are relatively new, and their possible effects on human and animal health are yet to be fully discovered and understood. Because of conflicting and polarised views on the scientific and factual nature of GMO foods, their scientific process of risk assessment needs a regulatory framework within the WTO. In so doing, the reliability of consumers being able to accurately perceive risks must be looked at very cautiously, as consumers can be influenced by highly publicised risks as perceived by sectarian interests. Consumers may irrationally overreact in the wake of a temporary disease outbreak. Even the cultural and ethnic affinity of consumers may take precedence over scientific evidence. Should this eventuate, the determination of risks and standards of protection on the basis of consumer sentiment is fraught with the possibility of minimising science-based decision-making and maximising unjustified trade protectionism. Nonetheless, the scientific evidence of risks arising from GMO products has not always been sufficient and complete, but evolving. Some organisms and toxins have been shown to have a longer gestation period that may well go beyond the range of a scientific risk assessment method, exposing consumers to potential unknown risks. Given such scientific uncertainty and/or inadequacy, a precautionary approach of prevention as a better option than cure may not be gainsaid.

These legal issues and public interest/policy considerations explain why the Biotech Panel took an unprecedented amount of time to issue its final report. The outcome of the dispute has far-reaching implications for the governance of trade in GMO products and multilateral trade liberalisation under the WTO.

IV. Concluding remarks

The SPS Agreement offers both opportunities and threats for many countries. Exporting countries can challenge quarantine restrictions in many markets while exposing their own restrictions to challenge by foreign exporters. Its requirement for the use of scientifically justified non-protectionist measures has the potential to eliminate many dubious SPS measures to trade. Standard-setting international organisations setting methodologies and criteria for risk assessment are believed to be promoting the long-term goal of international harmonisation.Footnote 26

The significance of the SPS Agreement has increased as a result of surging consumer vigilance and concerns about environmental and food safety issues. This public interest matter has thus far gone unheeded and unaddressed at the WTO for two reasons: the purpose of the SPS Agreement and composition of dispute settlement bodies.Footnote 27 The Agreement is intended to eliminate in particular all SPS measures that are trade restrictive regardless of their purpose of protecting public health and safety. The SPS measures applied to protect human, animal and plant health, the environment and for biosecurity remain beyond the primary scope of the Agreement. The panellists and members of the WTO dispute settlement bodies are overwhelmingly trade lawyers, diplomats and free trade economists with a firm commitment to maximising trade liberalisation strictly within pro-trade WTO law,Footnote 28 a consistently demonstrated parochialism.

The SPS Agreement has not yet addressed the weaknesses of its international standardising bodies, the inherent tension between the evolving nature of scientific research and the conclusiveness of scientific evidence in assessing risks and the implementation difficulties faced by developing countries with limited or no scientific capability. SPS measures remain “the most important impediment to agricultural and food exports to the EU” and are more prohibitive for exporting countries than tariffs.Footnote 29 That the EU ban on GMOs had a covert element of trade protectionism cannot be ruled out altogether. The biotech ruling will have precedential effects for future WTO rulings on national GMO regulatory regimes for public safety and for interests coming into conflict with trade liberalisation. Developing countries, many of which are yet to – or even cannot – establish GMO regulatory regimes due to resource constraints, are particularly disadvantaged by this ruling.

It is important for WTO Members to have quarantine regulatory autonomy to the extent necessary to preserve their environment, unique biodiversity and pest/disease-free status by preventing pest and disease incursions. It is equally crucial to liberalise and facilitate international trade for their economic benefit. Attaining a balance between applying SPS measures to adequately protect against the threat of disease and fulfilling the obligations under the SPS Agreement is imperative. According unconditional preference to the former over the latter is fraught with the risk of opening a protectionist floodgate. In assessing the threat of risks and setting an appropriate level of protection, states must pay attention to the countervailing conditions of the SPS Agreement such that both the risks and measures are supported by dependable scientific evidence. A “zero-sum” approach to national quarantine regulation may be overprotective and counterproductive, as gains from liberalised trade may well outweigh the manageable risks in many instances.

In adjudicating a precautionary regulatory regime, the DSB must balance the competing interests of liberalised trade and public health, biosecurity and environmental protection. The Biotech Panel had an opportunity to strike this balance by establishing a mutually supportive nexus between these two desirable goals within the broad spectrum of international law and multilateral environmental agreements (MEAs). Both international law and MEAs recognise precautionary decision-making for regulating future threats of irreversible harm amid a lack of full scientific certainty.Footnote 30 The Panel was reluctant to drift away from the insular WTO legal framework. It looked at the potential risks of biotechnology solely through the lens of the SPS Agreement, which does not explicitly endorse the application of precautionary measures for managing potential risks. Working strictly within the WTO structure of not being trade restrictive, the Panel purported to seek and receive justification for its findings from existing – indeed, available – scientific evidence. Through this process, it retained the WTO narrative of a science-based trading discipline and avoided the prevailing perplexing problem of scientific uncertainty and inadequacy surrounding the risks that GMOs may pose to human health, biosecurity and the environment. This pragmatism in risk management undermines any cautious preventative approach as a precaution to any potential spread of harmful GMOs in national food chains until their safe human consumption is evidenced conclusively. This is a missed opportunity for a much-needed judicial engagement in the divisive legal quagmire of preventative public policy as an anticipatory risk management strategy in international trade.

Footnotes

1 For a critical analysis of the Agreement, see MR Islam, International Law of the WTO (Oxford, Oxford University Press 2006) pp 103–31.

2 TP Steward (ed.), The GATT Uruguay Round: A Negotiating History, 1986–1992 (vol. 1, Alphen aan den Rijn, Wolters Kluwer 1993) p 141; Negotiating Group on Agriculture Working Group on Sanitary and Phytosanitary Regulations and Barriers, GATT Doc. MNT.GNG/NG5/WGSP/W/7 (31 October 1989); WTO, The Legal Text: The Results of the Uruguay Round of Multilateral Trade Negotiations (Cambridge, Cambridge University Press 2000) p 59.

3 Panel reports WT/DS26/R/USA and WT/DS48/R/CAN (18 August 1996).

4 AB report WT/DS26/AB/R (16 January 1998).

5 AB report WT/DS26/AB/R and WT/DS48AB//R (19 February 1998).

6 Beef Hormones Dispute – Joint Communication from the EU and US, WT/DS26/29 (17 April 2014).

7 WA Kerr, “Science-based rules of trade: a mantra for some, an anathema for others” (2003) 4 Estey Journal of International Law and Trade Policy 86; J Cameron, “The Precautionary Principle” in G Sampson and WB Chambers (eds), Trade, Environment, and the Millennium (New York, UN University Press 1999) p 261; S Gray, “Aquatic imports in Australia: quarantine, international trade, environmental protection” (2000) 17(4) Environment and Planning Law Journal 245.

8 P Shadle, “BSE offers lessons in risk assessment” (2004) 17(7) BioPharm International 24.

9 R Adhikary, “LDCs in the multilateral trading system” in PJ Macrory et al (eds), WTO: Legal, Economic and Political Analysis (vol. 1, New York, Springer 2005) pp 343–56; S Henson and R Loader, “Barriers to agricultural exports from developing countries: the role of SPS requirements” (Centre for Food Economics Research, Department of Agriculture and Food Economics, University of Reading, Mimeo, 2000) p 26; S Inama, “Market access for LDCs: issues to be addressed” (2002) 36(1) Journal of World Trade 85.

10 WTO, Review of the Operation and Implementation of the Agreement on SPS Measures, Report of the Committee, L/G/274 of 16 November 1998, para 2.

11 G Goh and AR Ziegler, “A real world where people live and work and die: Australian SPS measures after the WTO Appellate Body’s decision in the Hormones case” (1998) 32(5) Journal of World Trade 275.

12 Australian Department of Agriculture, Fisheries and Forestry, “Revised Draft Import Risk Analysis Report for Apples from New Zealand: Fact Sheet 1” <http://www.affa.gov.au/content/output.cfm?ObjectID=D51B9649- 3692-4F76-919200A78D716CA> (last accessed 2 September 2004); C Welch, “Science or protection? Australia’s quarantine regime and the WTO” in P Ramburuth and C Welch (eds), Casebook in International Business: Australian and Asia-Pacific Perspectives (Hoboken, NJ, Prentice Hall 2004) pp 78–81.

13 Australia – Measures Affecting Importation of Salmon, Panel report, WT/DS18/R; AB report, WT/DS18/AB/R, adopted 6 November 1998; see also Australia – Measures Concerning the Importation of Salmonids, Panel report, WT/DS21/R (16 September 2002).

14 D Gascoine, “WTO dispute settlement: lessons learned from the Salmon case”, a paper presented at the Conference on International Trade Education and Research: Managing Globalisation for Prosperity, Melbourne, 26–27 October 2000.

15 AB report, WT/DS245/AB/R, adopted 10 December 2003; the USA successfully challenged the Japanese provisional measures against the importation of apples under the SPS Agreement; see also Japan – Measures Affecting Agricultural Products (Fruit Varietal Dispute), Panel report WT/DS76/R, AB report WT/DS76/AB/R, adopted 19 March 1999.

16 J Knight, “Advance Australia Fair? The anatomy and pathology of an 84-year trade dispute” (2005) 5(2) Journal of Public Affairs 112.

17 Australia – Measures Affecting the Importation of Apples from New Zealand, Panel report, WT/DS367/R (9 August 2010), AB report, WT/DS367/AB/R (29 November 2010), adopted 17 December 2010; Understanding between New Zealand and Australia, WT/DS367/21 (19 September 2011); J Giovanelli, “Australia – apples: how the WTO Appellate Body dealt with the application of jurisprudence from the continued suspension dispute” (2010) 8 New Zealand Yearbook of International Law 45.

18 Supra, note 4, paras 116–17.

19 Footnote ibid, para 194.

20 Footnote ibid, para 193.

21 Footnote ibid, para 124.

22 Gascoine, supra, note 14, para 184.

23 Panel reports, WT/DS291/R, WT/DS292/R and WT/DS293/R (29 September 2006); for analysis, see C Henckels, “GMOs in the WTO: a Critique of the Panel’s legal reasoning in EC – Biotech” (2006) 7(2) Melbourne Journal of International Law 278–305; D Winickoff et al, “Adjudicating the GM food wars: science, risk, and democracy in world trade law” (2005) 30 Yale Journal of International Law 81–123; F Sindico, “The GMO dispute before the WTO: legal implications for the trade and environment debate” (Natural Resources Management, January 2005).

24 The EU consumer survey revealed that 70% did not want GMO foods and 94% wanted to be able to choose whether or not they would eat GMO foods: Global Trade Watch, The WTO: An Australian Guide, updated 2005 <http://www.tradewatchoz.org> (last accessed 3 March 2005) pp 28, 36.

25 Australia, China, Columbia, El Salvador, Honduras, New Zealand, Norway, Peru, Thailand, Uruguay and Chinese Taipei registered as third parties. New Zealand has a moratorium on growing GMO crops. China has GMO food labelling laws. Australia has limited GMO product exporting interests.

26 Committee on SPS Measures, Summary Report on the SPS Risk Analysis Workshop, 19–20 June 2000, WTO Doc. G/SPS/GEN/209 (2000).

27 Natural Resources Institute, “SPS measures and their implications for trade in forest products” (Ethical Trade Policy Watching Brief, edition 2, UK, March 2000) <http://www.nri.org/NRET/PWB/WTO.htm> (last accessed 14 March 2003).

28 N Grmelová, “Interpretation of the precautionary principle by the WTO’s Dispute Settlement Body with respect to the sanitary and phytosanitary agreement” (2017) VIII Czech Yearbook of International Law 117–32; MM Mbengue and UP Thomas, “The WTO case law and the precautionary principle: on the way to recognition?” (a paper presented at the Open Meeting of the Global Environmental Change Research Community, Montreal, Canada, 16–18 October 2003) <https://sedac.ciesin.columbia.edu/openmtg/docs/Thomas.pdf> (last accessed 22 January 2020).

29 S Henson and R Loader, Barriers to Agricultural Exports from Developing Countries: The Role of SPS Requirements (Centre for Food Economics Research, Department of Agriculture and Food Economics, University of Reading, Mimeo, 2000) p 26.

30 D Moudachirou and H Mukhtar, “precautionary principle in international environmental law: rule of customary international law” (2015) 6(12) International Journal of Management Sciences 564–71; M Stevens, “The precautionary principle in the international arena” (2002) (Spring/Summer) Sustainable Development Law and Policy 13–15; C Saladin, “Precautionary principle in international law” (2000) 6(4) International Journal of Occupational and Environmental Health 270–80; O McIntyre and T Mosedale, “The precautionary principle as a norm of customary international law” (1997) 9(2) Journal of Environmental Law 221–41.

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