By Matthew Stilwell

Center for International Environmental Law
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Developments in genetic engineering have outstripped society’s ability to debate its scientific and ethical implications and to regulate the creation and commercial release of genetically modified organisms (GMOs). Although genetic engineering may potentially benefit society, GMOs are increasingly recognized by scientists, governments and consumers as posing a risk to health and the environment, as well as raising significant social and ethical concerns.

Policymakers are beginning to respond by providing the public with more information about the products they consume. In response to widespread consumer demands, national GMO labeling schemes are being developed to protect the consumer’s right to purchase products that accord with their ethical, social, dietary and environmental preferences. Although these schemes may prove insufficient to deal with GMO risks, they are a step in the right direction.

Improving consumer awareness about genetic engineering is, however, largely opposed by GMO exporting countries. In an attempt to expand their export markets, these countries may attempt to overturn GMO labeling schemes using the rules of the World Trade Organization. Indeed, the United States has already asserted in a WTO Committee that the European Union’s GMO labeling scheme is inconsistent with WTO rules.[1]

This paper examines the relationship between GMO labeling schemes and WTO rules. It explores the potential conflicts between the trade rules and GMO labeling schemes and it suggests interpretations of the trade rules that allow GMO labeling schemes to operate without interference by the international trade system.

GMO product labels fall into two main categories. The first may be referred to "positive" labels, which informs consumers that a product contains, or may contain, a GMO. These are generally compulsory; they require all products in a particular class, or exhibiting certain characteristics, to carry the label. Because of their compulsory nature, they require government involvement. The European Union’s compulsory labeling scheme for GMOs, for example, fall into this first category (See Box 1).

The second category is "negative" or GMO-free labels, which inform consumers that a product does not contain a GMO. These may be sponsored either by government or by private organizations. They are generally voluntary; a producer may choose to affix a label to its product if it believes the label will improve the product’s saleability. The organic labels administered by the International Federation of Organic Agricultural Movements (IFOAM), for example, fall in this second category.

Genetic engineering is a truly revolutionary technology. It allows scientists to cross species boundaries to create new transgenic organisms. The ability to create these organisms raises new ethical, social and environmental questions, and may give rise to unforeseen sources of risk and uncertainty. This section provides some scientific background on genetic engineering and then describes some of the main reasons to labeling GMO products.

How are genetically modified organisms different from their natural counterparts? All organisms are composed of cells that contain the molecule DNA (deoxyribonucleic acid). DNA forms into units of genetic information – or genes – and results in the diversity of living organisms. These genes for a genetic blueprint that determines the regulatory functions of cells and thus the characteristics that make each organism unique.

Prior to genetic engineering, the sharing of DNA information was possible only between individual organisms of the same species. However, since 1972, scientists have been able to identify specific DNA genes associated with desirable traits in one organism, and transfer those genes across species boundaries into another organism. The aim of this process is to change the physical characteristics of the recipient organism. The altered organism contains DNA (as well as other proteins and components) that would not be physically present without the genetic modification.

Genetic engineering thus marks a significant departure from traditional methods of modification. Modern biotechnology has eroded genetic barriers, not only between species, but between humans, animals and plants. Genetic engineering is truly revolutionary. Because it allows the creation of new transgenic organisms, it creates significant risk and uncertainty. This risk and uncertainty arises both from the process of genetic engineering, and from the resulting organisms and the products they are used to create.

The process of genetic engineering creates risk and uncertainty by transferring new "regulatory" information into the recipient organism. Regulatory information determines how DNA replicates, transcribes and recombines. Our understanding about the role of regulatory information is incomplete. The introduction of DNA sequence can thus have unintended and unexpected regulatory effects on cellular processes in recipient organisms.

This uncertainty is compounded by the imprecise techniques for inserting DNA. Although genetic engineering techniques are generally precise in isolating the desired DNA string in the original organism, they are imprecise when inserting it into the recipient organism. The random nature of insertion prevents scientists from knowing which of the gene’s regulatory functions might be affected.

An additional source of risk arises from the use of "antibiotic marker" genes. These are introduced into the recipient organism to identify successful transformations of DNA. By transferring antibiotic resistance along with the desired gene, marker genes may increase the likelihood that new organisms will exhibit antibiotic resistance and that this resistance will be passed on to other organisms through cross-fertilization. Increased antibiotic resistance has implications for public health.

Uncertainty and risk associated with the process of engineering are also reflected in the resulting genetically modified product. As a result of altered regulatory functions, genetically modified food may exhibit increased allergenicity, toxicity, or altered nutritional value. Altered metabolic rates may, for example, lead to the production of new or altered levels of existing components and chemicals in the organism. Mutations can result in the interruption of coding or control sequencing and activate latent genes, leading to the presence of new components or altered levels of existing components.

Uncertainties about a GMO’s regulatory functions are compounded by uncertainties arising when it is released from a controlled environment. The interaction of a GMO and other complex biological systems such as the human body or natural ecosystems cannot in many cases be anticipated or fully tested for before commercial release. The incredible complexity of even the simplest organism prevents scientists from knowing many important short and long-term effects of genetic alteration. Long-term testing in complex environments will often be required before scientists could have even a basic understanding of the effects of releasing GMO products on agricultural structures, crop varieties, target and non-target organisms, soil food-web communities, plants, aquatic systems and biodiversity.

There are a number of justifications for strong GMO labeling laws. Probably the most important is the consumer’s right to know about the products they purchase. Many consumers, for social, ethical, religious or environmental reasons, may prefer not to consume GMO products. Consumers also differ in the amount of risk they are willing to accept, and to the weight they give risk avoidance versus other preferences, such as product price and quality, and environmental safety. Consumer polls have consistently supported labeling of genetically modified organisms. Labeling allows consumers to exercise rational, informed judgements in line with their personal traditional aim of the international trade system - to promote efficient markets and to provide consumers with greater choice.

Labeling is also one of the least intrusive methods of regulating GMO products. Other methods, such as banning imports and domestic production, have more significant trade impacts. Of course, there may be instances where labeling is inadequate to respond to GMO product risks and governments may justifiably determine that more stringent measures are required. In many cases, however, governments may decide that compulsory labeling of all GMO products is the least they can do to respond to GMO risks and to widespread consumer demands for the regulation.

The foregoing reasons provide strong support for both voluntary and compulsory labeling schemes. In addition, the risks associated with the process of genetic engineering and with the resulting food products provide a justification for labeling GMO food products. Genetic engineering may alter the composition, nutritional value, allergenicity or toxicity of modified foods, food ingredients and additives. While not all GMO products will exhibit such changes, and not all changes will harm consumers, genetic alteration produces a risk that food may be unsafe. Certain groups, such as children, the elderly and those with allergies may have heightened responses to changes in food composition. Labeling informs consumers of these potential changes.

The potential for GMO labeling schemes to affect international trade in genetically modified products raises the specter of a WTO challenge. Exporting nations – under pressure from their large biotechnology and agriculture companies – have already applied pressure to countries with compulsory GMO schemes. The United States has argued at the WTO that the EU GMO labeling scheme "will cause problems for our exports and raises serious questions under the [3] In considering the potential for a WTO challenge, the following three WTO agreements should be examined:

• the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement);
• the Agreement on Technical Barriers to Trade (TBT Agreement); and
• the General Agreement on Tarrifs and Trade 1947 (GATT).

Below we provide a brief overview of each of the agreements and their main obligations, commencing with a discussion of their historical background. In the next section we examine how these agreements may apply to GMO labeling in the event of a trade dispute.

The relationship between the GATT and the TBT and SPS Agreements is complex and is best understood in light of their somewhat ad-hoc historical development. Under the original GATT, domestic regulations (including labels) are governed primarily by the "national treatment" obligation in Article III. This obligation requires governments to give imported goods treatment no less favorable than given to nationally produced goods and products. In other words, national governments must not use their domestic laws, including labeling laws, to discriminate against foreign products in favor of domestic products. Exceptions to this obligation are available in Article XX of the GATT, which allow governments to give less favorable treatment in certain defined circumstances, including when necessary to protect human, animal or plant health (Article XX(b)).

During the Tokyo Round of trade negotiations, a new layer of obligations were drafted. These govern a special class of domestic regulations. They aim to prevent "technical regulations" (i.e. regulations regarding product specifications, labeling, packaging and other "technical" issues) from restricting trade, and are found in the Agreement on Technical Barriers to Trade (TBT Agreement). Among other things, this agreement require countries to avoid creating "unnecessary obstacles to trade"; it requires them to ensure that their regulations are not more "trade-restrictive than necessary" to achieve a "legitimate objective," such as protection of the environment. This obligation goes beyond the traditional national treatment requirement found in GATT and, arguably, may allow domestic laws to be challenged even if they do not overtly discriminate against foreign producers.

A further layer of obligations was added during the Uruguay Round of trade negotiations. WTO Member governments considered that a special type of technical regulation – sanitary and phytosanitary measures (SPS Measures) – required even further disciplines. These are found in the SPS Agreement. To prevent protectionist use of SPS Measures, the SPS Agreement contains a series of science-based disciplines. This agreement may be thought of as a "carve out" of the TBT Agreement (the TBT Agreement does not apply to SPS Measures) and an expansion of the health exception found in Article XX of the GATT.

As noted, the SPS Agreement aims to prevent national laws that regulate food quality and the spread of disease and pests from unduly restricting international trade. It contains three primary disciplines. First, national SPS measures must be based on a risk assessment and scientific evidence. Second, Members must avoid applying their SPS measures in a way that creates "arbitrary or unjustifiable discrimination" and "disguised restrictions on international trade". In particular, the agreement states that "arbitrary distinctions" in the levels of sanitary protection applicable to different products must not result in discrimination or disguised restrictions on international trade. Third, SPS measures must not be more trade restrictive than required to achieve the Member’s chosen level of SPS protection. In addition to these obligations, the SPS Agreement encourages Members to grant equivalence to other Member’s laws and includes obligations relating to transparency, technical assistance and special and differentiated treatment of developing countries. It also requires Members to "take all ... reasonable measures" to ensure non-governmental and regional entities comply with relevant provisions of the SPS Agreement.

The TBT Agreement applies to a broader range of domestic health and environment regulations. The agreement divides these into two categories: "technical regulations" which are laws requiring mandatory compliance (and would thus include compulsory labeling schemes); and "standards" which, set non-binding rules (and may include voluntary labeling schemes).

To these measures, it applies two primary disciplines. First, it contains the non-discrimination obligations of MFN and national treatment. Second, it requires Members to ensure that their national regulations do not create "unnecessary obstacles to international trade" and are not "more trade-restrictive than necessary" to achieve their purpose.

The aim of the TBT Agreement is to ensure that WTO Members do not use technical regulations and standards as disguised measures to protect domestic industries from foreign competition. The TBT Agreement also aims at reducing the extent to which technical regulations and standards operate as barriers to market access, primarily by encouraging governments to harmonize national laws by reference to international standards. Harmonization is expected to reduce the obstacles to trade that producers may face as a result of numerous, sometimes incompatible, standards and regulations for products in different countries.

Like the SPS Agreement, the TBT Agreement seeks to extend its reach to non-government entities by requiring central governments to "take all ... reasonable measures as may be available to them" to ensure compliance with its terms. Unlike the SPS Agreement, it sets out detailed obligations that are explicitly aimed at regulating local government and non-government bodies. These include obligations relating to the preparation, adoption and application of technical regulations and standards, and the procedures for assessing whether products conform with these regulations and standards. Many of these obligations are set out in a Code of Good Conduct that is annexed to the TBT Agreement.

The provisions of Article III (national treatment) and XX (environmental exception) of GATT will apply to GMO labeling schemes only to the extent that it does not conflict with whichever of the TBT and SPS Agreement is applicable. As discussed, Article III of the GATT requires that Members not discriminate against foreign products in favor of like domestic products (national treatment). The GATT contains a second non-discrimination obligation; Article I of the GATT requires Members to not discriminate between like products from one trading partner in favor those from another. This is referred to as the Most Favored Nation obligation. Discrimination to promote certain goals such as protection of human, animal or plant life or health is permitted under Article XX of the GATT, but only to the extent that discrimination is not "arbitrary or unjustifiable." Similarly, the use of the environmental exceptions must not constitute a "disguised restriction on international trade." As a practical matter, the GATT will only be used by a WTO panel to the extent that it adds obligations that are not inconsistent with the SPS and TBT Agreements.

There is considerable legal uncertainty about how WTO trade rules will apply to GMO labeling. Doubt, for example, arises from the somewhat arbitrary division of laws protecting health and the environment into two categories - SPS and TBT measures. This division does not pose problems in most cases. But where measures have multiple motives – ethical, consumer, environmental and health concerns – deciding which agreement applies is more difficult.

The following section argues that the TBT Agreement, and not the SPS Agreement, applies to GMO labeling. As a general rule, labeling is considered under the TBT Agreement. This agreement refers to labeling in its preamble, and explicitly defines "technical regulations" and "standards" to include "packaging, marking or labeling requirements as they apply to a product, process or production method". By contrast, the SPS Agreement contains little direct consideration of labels. And because the SPS Agreement focuses on levels of SPS protection (i.e. levels of acceptable risk), whereas labeling provides consumers with information about the nature of a product, it is unclear how a large number of the SPS Agreement’s provisions could sensibly apply to labeling.

Nevertheless, deciding which agreement applies is of practical significance because a country that challenges another’s GMO labeling scheme is likely to prefer the stricter, science-based SPS Agreement over the more flexible provisions of the TBT Agreement. They may thus argue either that: (1) the SPS and TBT Agreements apply concurrently to the same label; or (2) that the SPS Agreement trumps the TBT Agreement with respect to all or part of a particular labeling scheme. The following section describes some of the main legal questions that arise when WTO rules are applied to GMO labeling. It argues that the agreements should not be applied concurrently and that the TBT Agreement is the preferable agreement under which GMO labeling should be considered.

The proper relationship between the SPS and TBT Agreements is not entirely clear. The potential for conflict between the agreements is recognized in the texts of both the SPS and TBT Agreements. The TBT Agreement states "[t]he provisions of this Agreement do not apply to sanitary and phytosanitary measures as defined in Annex A of the Agreement on the Application of Sanitary and Phytosanitary Measures."[4] Similarly, the SPS Agreement provides "[n]othing in this Agreement shall affect the rights of Members under the Agreement on Technical Barriers to Trade with respect to measures not within the scope of this Agreement."[5]

It seems from these provisions that a measure that is considered under one agreement does not need to be considered under the other. Thus, if a measure is defined as an SPS Measure, only the provision of the SPS Agreement will apply; the provisions of the TBT Agreement "do not apply". If, on the other hand, the measure is not defined as an SPS Measure, then it will default for consideration under the TBT Agreement and the provisions of the SPS Agreement will not "affect the rights of members" under the TBT Agreement. The better interpretation of these provisions is that the two agreements do not apply to the same matter.

Note that the division between these agreements depends on the definition of "measure." Can one labeling scheme be divided into two different "measures"? If it can, then the SPS Agreement could be applied to what is identified as the SPS component, and the TBT Agreement applied to the TBT component. There are, however, a number of practical problems with this approach. First, applying the agreements concurrently would impose conflicting disciplines on national labeling schemes and further complicate the domestic regulatory process. The TBT Agreement, for instance, imposes MFN and national treatment obligations, whereas the SPS Agreement does not. And the SPS Agreement requires governments to take into account detailed risk assessment procedures, whereas the TBT Agreement does not. Indeed, dividing a label into SPS and TBT components and requiring a government to undertake a risk assessment before being permitted to label a product merely because part of its justification is health-based would unduly inhibit the national regulatory process. In light of these practical problems, the better approach is that the two agreements do not apply to the same matter and should be considered and applied independently and not concurrently to GMO labeling schemes.

When considering the two agreements independently, the TBT Agreement and not the SPS Agreement should be applied to GMO labeling. This approach, while subject to some legal uncertainty, is supported by both legal and policy considerations.

From a policy perspective, applying the SPS Agreement would place new hurdles before national GMO labeling schemes. The SPS Agreement is a science-based agreement designed to govern health and safety rules. It’s strong focus on science and quantitative risk assessment renders it inappropriate to deal with the broader non-SPS, social, ethical and environmental issues raised by GMO labeling. Extending its restrictive provisions to labeling schemes that enjoy almost unanimous public support would undermine both national legislative prerogative and public support for the WTO and the multilateral system. A WTO panel finding GMO labeling inconsistent with the WTO Agreements would likely be characterized as forcing consumers to unknowingly consume GMO products against their social, ethical, religious, dietary and environmental preferences.

From a legal perspective, the issue is whether a particular GMO labeling scheme falls within the definition of SPS Measures and thus within the ambit of the SPS Agreement. If they do not, the labeling measures will default for consideration under the TBT Agreement. The GATT will be relevant to the extent it does not conflict with these other agreements. There are two main arguments suggesting that the SPS Agreement should not apply and that the labeling scheme, therefore, default for consideration under the TBT Agreement.

First, SPS Measures are defined to cover packaging and labeling requirements directly related to food safety. GMO labels, because of their multiple, non-health-related motives should not be characterised as "directly related" to food safety.[6] Food safety may provide a partial justification for GMO labeling. However, their primary justification, as indicated by the architecture and structure of GMO labeling schemes, is to protect the consumer’s right to know about the existence of GMOs and to enable them to purchase products that are consistent with their ethical, religious, dietary and environmental preferences. Interpreted in light of their context (including the TBT Agreement’s detailed labeling obligations) the words "directly related" should thus be read narrowly to exclude GMO labeling from the SPS Agreement.[7]

Second, SPS Measures are defined to include measures that protect against risk arising from: (1) additives, contaminants, toxins or disease-causing organisms in food beverages or feedstuffs; and (2) from disease carried by animals, plants or products thereof, or from the entry, establishment or spread of pests. It can be argued that GMOs are not themselves additives, contaminants or toxins in food. While the process of genetic engineering may give rise to increased toxicity the overriding purpose of GMO labeling is to responds to consumer demands for greater information about the existence of GMOs. Once again, the primary purpose of GMO labels is to inform consumers of the existence of GMOs, rather than to protect against risks arising from additives, contaminants or toxins in food. They should therefore be excluded from the SPS Agreement and considered under the TBT Agreement.

The following section discusses the main issues that may arise if a compulsory GMO labeling scheme is challenged under the TBT Agreement and offer some basic arguments in support of GMO labeling schemes. The impact of the TBT Agreement on voluntary or "GMO-free" labels is discussed briefly later. The TBT Agreement has two main disciplines applicable to GMO labeling: (1) measures must not discriminate between like products (non-discrimination obligation); and (2) measures not be more trade-restrictive than necessary.

The TBT’s non-discrimination obligation requires members not to discriminate between "like products." This obligation has two components. First, the "most favored nation" component requires Members not to treat products that are produced by one trading partner less favorably than "like products" produced by another trading partner. Second, the "national treatment" component requires Members not to give products that are produced by a trading partner treatment that is less favorable than is given to "like products" produced nationally.

The impact of the non-discrimination obligation therefore turns around the meaning of the term like products: where two products are like they must be treated in the same manner to avoid breaching the non-discrimination obligations. Conversely, where they are not "like" a member may treat products differently without contravening this obligation. In the context of GMO labeling, determining whether GMO and non-GMO products are like products becomes important.

A challenging country might argue, for example, that its genetically modified exports are like the non-GMO products produced in the importing country and therefore the importing country’s labeling scheme, by requiring only GMO products to be labeled, is discriminating against the imported GMO product. The United States, for example, has asserted that it is "unaware of any evidence that would demonstrate that genetically modified varieties as a class differ from conventional varieties in composition, nutritional value or nutritional effects."[8] In response, an importing country such as the EU might argue that GMO and non-GMO products are not like products and therefore the different treatment does not contravene the non-discrimination obligation.

To what extent are GMO and non-GMO products like products? According to the WTO Appellate Body, there is no precise definition of what is like.[9] Likeness will be determined by considering the various characteristic of a product in an individual case. Whether two products are "like" will depend both on the physical (or factual) differences between them, and on the legal characterization of the "like product" test.

There are at least three arguments supporting the view that GMO and non-GMO products are not like products. The first is that GMO and non-GMO products are physically different. GMO products contain genetic information (DNA and protein) that does not exist in their natural counterparts. The process of genetic modification is specifically designed to insert new genetic material into an organism to produce different physical characteristics. The fact that other breeding methods may also introduce new genetic material into a recipient organism (although not across species boundaries) does not change the fact that genetically modified products are physically different from their traditional counterparts. It may occasionally be difficult at the border of the importing country to identify whether a product has been genetically modified. In these cases, the process by which the product was produced can be examined to determine whether the product is genetically modified. In some cases, this may require GMO and non-GMO products to be segregated. In most cases, however, precise testing will be able to differentiate between the two categories of products and segregation is unlikely to be necessary.

Second, consumers consider GMO and non-GMO products to be unlike. A determination of whether products are like may, according to the WTO Appellate Body, take into account "consumers’ tastes and habits, which change from country to country."[10] Consumer polls have consistently supported the labeling of genetically modified food. In Denmark, a 1996 poll found that 95% of consumers wanted genetically modified food to be labeled. Similarly, in the United States, a 1997 U.S. industry sponsored poll determined that 93% of consumers want genetically modified food to be labeled. The support for GMO labeling in the EU and elsewhere indicates that the consumers consider GMO and non-GMO products to be unlike.

Third, the like product test in the TBT Agreement should be narrowly defined to differentiate between GMO and non-GMO products, regardless of whether physical difference can be easily ascertained. In other words, it should be interpreted to allow Members to use labels to distinguish between GMO and non-GMO products on the basis of how they were produced, even if the production process may not appear to affect the physical characteristics of the product (non-product related PPMs).

This interpretation is consistent with sound environmental principles such as life-cycle analysis, which encourage sustainable production processes. It is also supported by the definition of "technical regulations" under the TBT Agreement, which, in relation to compulsory labeling, is defined to include non-product related PPMs. Under this approach, the process of genetic modification would itself be a valid basis for a regulatory distinction between GMO and non-GMO products, at least as far as labeling is concerned. GMO and non-GMO products would thus not be like products, and labeling schemes could validly differentiate between them.

This interpretation of the TBT Agreement non-discrimination obligations may be distinguished from the traditional approach to "like products" in Article III of the GATT. Under Article III, non-product related PPMs have historically not been permitted as a reason to distinguish between products. This approach, however, is not appropriate for the TBT Agreement, which has substantively different provisions relating to labeling and should be interpreted to permit PPM based distinctions. As noted by the Appellate Body, "there can be no one precise and absolute [11] The meaning "must be determined by the particular provision in which the term "like" is encountered as well as by the context and the circumstances that [12]

For the above reasons, GMO and non-GMO products are not "like products" and so differential treatment in a labeling scheme will not violate the TBT Agreement’s non-discrimination obligation. However, event if a panel were to find a violation of the non-discrimination obligation, GMO labeling should be justified under the WTO exceptions found in Article XX of the GATT.

To protect GMO labeling, the provisions of the TBT Agreement should be qualified by the exceptions in Article XX of the GATT. These exceptions allow governments to discriminate where necessary to safeguard public morals; to protect human, animal or plant life; or to conserve natural resources. How might Article XX apply to the TBT Agreement?

The starting point of this analysis is that the WTO agreements, which includes the TBT Agreement and the GATT, are a "single undertaking" and therefore the obligations in these agreements are cumulative. Under this approach, a measure such as a GMO labeling scheme must be considered under each obligation of each agreement, and all obligations will apply simultaneously except to the extent of any conflict.[13] This principle is in conformity with the public international law presumption against conflicts, which has been applied in numerous WTO Appellate Body and panel decisions.[14]

There is no conflict between the non-discrimination obligations of the TBT Agreement and Article XX. Four reasons support this conclusion. First, international law includes a presumption against conflicts; a conflict will only arise where a party cannot comply with its obligations under both agreements.[15] This approach is supported by international law principles of effective treaty interpretation. These require WTO provisions to be interpreted to preserve (rather than render redundant) other WTO rights and obligations. The obligation in the TBT Agreement to avoid non-discrimination should not be read to render the right to exceptions in Article XX redundant.

Second, Article XX is a right specifically designed to qualify non-discrimination obligations of the kind included in the TBT Agreement. They complement rather than conflicting with these obligations by permitting derogation where necessary to achieve other important policy goals. Again, based on the principle of effective interpretation, Member's obligations under the TBT Agreement should not be interpreted so as to deny them full exercise of their rights under Article XX of GATT. As stated by the Appellate Body in Hormones, "merely characterising a treaty as an 'exception' does not by itself justify 'stricter or narrower' interpretation of that provision than would be warranted by examination of the ordinary meaning of the actual treaty words, viewed in context and in the light of the treaty's object and purpose, or, in other words, by applying the normal rules of interpretation."[16]

Third, the context of the TBT non-discrimination obligation – specifically the TBT Preamble which recites language from Article XX – supports Article XX application. Specifically, the Preamble provides that: "no country should be prevented from taking measures … for the protection of human animal or plant life or health, [or] of the environment … subject to the requirement that they are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail or a disguised restriction on international trade".[17]

Fourth, excluding Article XX would suggest that the similar Article XXI national security exception would also be inapplicable to the TBT Agreement, a result few WTO Members would condone. The WTO Agreements and in particular the TBT Agreement non-discrimination obligation should thus be interpreted so that the provisions of Article XX are available to afford protection to GMO labeling.

GMO labels satisfy the requirements of the Article XX exemption because they fall within the enumerated categories in Article XX, and satisfy the introductory paragraph’s ("chapeau") requirements.

GMO labels fall within a number of Article XX’s enumerated categories. They reflect citizens’ moral concern (Article XX(a)); they protect human, animal and plant life or health (Article XX(b)); and they relate to the conservation of exhaustible natural resources such as genetic diversity (Article XX(g)).

They will also generally satisfy the test in the "chapeau" of Article XX. The chapeau requires Members to avoid creating "arbitrary or unjustifiable discrimination between countries where the same conditions prevail" and "disguised restrictions on international trade." First, unlike the TBT Agreement non-discrimination obligations, which refer to discrimination between products, the Article XX chapeau refers to discrimination between countries. In other words, there is no "like product" test in the chapeau. GMO labels do not discriminate between countries (at least not facially) and therefore do not violate chapeau requirement. Rather, products are treated in the same way, regardless of their country of origin. The EC scheme, for example, requires all GMO products to be labelled, regardless of whether they were produced in the European Union or the United States.

Second, even if a WTO panel were to identify discrimination, the powerful justifications for GMO labeling – consumers’ right to know, freedom of speech, consumer education, sound economics – all mitigate against a GMO labeling scheme being considered "arbitrary or unjustifiable discrimination" or a "disguised restriction on international trade."[18]

Having examined the TBT Agreement’s first main obligation, it is now necessary to examine the second obligation, which requires Members not to create "unnecessary obstacles" to international trade. To achieve this goal, technical regulations and standards must not be "more trade restrictive than necessary" to protect "legitimate objectives" such as human health or safety, animal or plant life or health, or the environment.

The term "legitimate objective" should be given a broad interpretation that includes any policy objective within the sphere of government authority, including those underpinning GMO labeling. It seems unlikely that a WTO panel could realistically hold that it is not a legitimate objective of governments to provide consumers with information. The main issue is therefore whether a particular GMO labeling scheme is more trade-restrictive than necessary to achieve this objective.

The meaning of "not more trade restrictive than necessary" has not been authoritatively determined in the context of the TBT Agreement. "Necessary," in earlier unadopted GATT panels, has been interpreted as "least trade restrictive."[19] However, this interpretation seems to place undue limits on governments’ ability to pursue domestic policy goals, and to elevate trade policy objectives above other legitimate objectives. A less invasive test can be found in the SPS Agreement, which provides that a measure will not be more "trade-restrictive than required" unless there is another measure, "reasonably available," that achieves the relevant goal and is "significantly less restrictive to trade".[20]

In the event of a challenge to a compulsory GMO labeling scheme, a challenging country would argue that compulsory labeling is more trade restrictive than necessary to achieve the goal of informing consumers about the presence, or otherwise, of GMOs. The United States, for instance, has argued that GMO and non-GMO products do not differ as a class. Therefore, the EU regulation, rather than achieving the legitimate objective of providing "proper information to the final consumer," could according to the United States, "contribute to consumer deception".[21]

A number of arguments can be offered against the proposition that GMO labeling is more "trade restrictive than necessary." First, past GATT panels have held that labeling is an acceptable solution to concern over potentially harmful products.[22] Second, compulsory labeling of all GMO is arguably the cheapest and most effective method to provide consumers with information about GMO products. Third, it is one of the least trade restrictive approaches (although, as discussed above, it may not always be sufficient to protect human health and the environment). Finally, GMO labeling is one of the most effective ways to raise public awareness about the kind and number of products that have been genetically modified. For these reasons, the WTO should not characterize GMO labeling as more trade restrictive than required to achieve its legitimate objectives.

The consistency of GMO labeling schemes with WTO rules may be affected by international standards. International standards are used by the WTO as a benchmark against which to test national laws. The TBT Agreement, for example, requires international standards to be used "as a basis for" national laws. Laws that are based on international standards are rebuttably presumed not to create "unnecessary obstacles to trade" under the TBT Agreement. Conversely, laws that are not based on international standards do not qualify for this presumption.

Currently there is no international standard directly applicable to GMO labeling. However, international standards relating to GMOs are currently under consideration at the Codex Aliementarius Commission.

The Codex Committee on Food Labeling (CCFL) is considering the adoption of a "substantial equivalence" standard for GMO labeling. In its present form, this standard would not require the labeling of all GMO products. Rather, a GMO product found to be "substantially equivalent" to a non-GMO product would be excluded from labeling. The proponents of this "substantial equivalence" test – GMO exporting countries and their biotech and agribusiness companies -argue that substantially equivalent GMO products pose no additional health risks and, consequently, do not require labeling. In addition to doubts about the scientific validity of this claim, concerns have been raised that a substantial equivalence test would undermine the numerous non-health-related goals of GMO labeling, such as consumers’ right to know. Consumer’s want to know about GMO products, regardless of whether they are "substantially equivalent" from a health perspective. Governments and citizens’ groups should give careful consideration to the role these international standards may play in a WTO challenge to a GMO labeling scheme.[23]

How might a substantial equivalence standard affect the TBT consistency of GMO labeling schemes? The standard would have two main implications. First, it may affect whether GMO and non-GMO products are held by a WTO panel to be "like products." On the basis of a substantial equivalence test, a panel may decide that GMO- and substantially equivalent non-GMO products are like products for the purposes of the WTO. Consequently, a labeling scheme that requires the former, but not the latter to be labeled, may contravene the TBT Agreement non-discrimination obligation.

Second, it may affect whether compulsory GMO labeling schemes are held by a panel to be "not more trade restrictive than necessary." On the basis of a substantial equivalence test, a panel may decide that schemes that require the compulsory labeling of all GMO products are "more trade restrictive than necessary." They could justify this decision by arguing that schemes that label only those products that are not substantially equivalent (i.e. GMO products that are proven to have different characteristics) is a "less trade restrictive" option.

The TBT Agreement allows national laws to deviate from international standards where they would be "ineffective or inappropriate" to fulfil the relevant "legitimate objective." To avoid undue incursion into national legislative prerogative, this requirement must be interpreted as a floor, and not a ceiling, on national regulations. In other words, a country should be able to exceed a "substantial equivalence" standard without proving that it is "inappropriate" to achieve its goals.

Two factors support such an interpretation. First, the Preamble to the TBT Agreement states that "no country should be prevented from taking measures … at the levels it considers appropriate." The TBT Agreement should, under no circumstances, place downward pressure on national standards. Second, the term "as a basis for" does not require strict compliance with international standards. Similar language in the SPS Agreement has been interpreted to require a measure to be "built upon" or "supported by" the international standard.[24] It did not, however, require the measure to "conform to" the international standard.[25]

In practice, the impact of a Codex substantial equivalence standard will ultimately depend on the particular labeling scheme under challenge. Nevertheless, the adoption of a substantial equivalence test presents a real threat to domestic GMO labeling schemes – particularly those requiring the compulsory labeling of all GMOs. Governments and citizens’ groups who are concerned to support GMO labeling should therefore seek to prevent such a standard from being adopted at Codex.

The TBT Agreement should also be interpreted to promote market access for developing countries. Guaranteeing market access to developing countries, particularly the least developed, is essential to their economic and environmentally sustainable development.

Concern about how GMO labeling schemes may impact developing country exports should be considered in light of the TBT Agreement’s provisions regarding market access. The TBT Agreement requires Members to assist developing countries to assess conformity with technical regulations; establishing bodies to assess conformity with standards; and advise exporters on how to get access to governmental and non-governmental conformity assessment bodies.[26]

Developing countries may wish to invoke these provisions to ensure that developing countries consider their right of market access when creating and implementing GMO labeling schemes. Further consideration should be given to the use of these provisions to provide concrete market access opportunities to developing countries as well as to their rights to time-limited exceptions to compliance with the agreements.[27]

Voluntary GMO-free labels may, in certain circumstances, also be subject to the TBT Agreement. The TBT Agreement includes a Code of Good Practice that may be applied to local governments and private organisations who administer voluntary labeling schemes.

Local- and non-governmental entities are not required to adopt the Code. However, the TBT Agreement requires Members to take such "reasonable measures" as may be available to them to ensure that local- and non-governmental standardising bodies accept and comply with the Code. The extent to which this requires central governments to interfere in state and private activities is unclear. A challenging country is likely to argue that this requires governments to take all constitutionally available measures to require compliance. Moreover, the TBT Agreement provides that Members remain fully responsible for the actions of non-governmental bodies in the event of a dispute. The practical effect of this is that Members may be considered in violation of the TBT Agreement for the actions of local- and non-governmental bodies.

Local- and non-governmental bodies that have accepted the Code of Good Practice must comply with non-discrimination obligations. These are similar to those discussed above in relation to compulsory labeling schemes. What is the implication of these obligations for GMO-free voluntary labeling schemes?

Recall that voluntary labels are designed to provide a market advantage to GMO-free products. In the event of a challenge to a voluntary labeling scheme, a challenging country would argue that its GMO products are "like" or "substantially equivalent" to the non-GMO products that benefit from the voluntary labeling scheme. It would claim that the label discriminates by giving non-GMO products a market advantage that is not available to "like" GMO products. It would argue that the denial of the benefit arising from the GMO-free voluntary label constitutes "less favourable" treatment, contrary to the non-discrimination obligations of the Code.

The arguments made above to preserve compulsory labeling schemes from challenge under the non-discrimination obligations are relevant here in relation to voluntary labeling schemes. Consumer tastes, physical differences, and a narrow interpretation of "like products" in the TBT Agreement all support the conclusion that GMO and non-GMO products are not "like products." In addition, voluntary labeling provides benefits to the suppliers of non-GMO products, rather than imposing costs on suppliers of GMO products as is the case with compulsory GMO labeling. In such a case there is no restriction of trade. Rather, the exporter merely fails to gain access to consumers who, if properly informed about the products they consume, would choose not to consume GMO products.

For related reasons, it is unlikely that voluntary GMO-free labeling could be considered "an unnecessary obstacle to trade." GMO free labels do not inform consumers about products that contain GMOs, they merely identify products that do not. As such, impose no barrier to the import of the GMO product. They merely create and define markets, rather than creating obstacles to them. While voluntary labeling schemes complement compulsory labeling of GMOs, GMO-free labeling cannot realistically be considered as a less trade restrictive way to achieve the goals of protecting health, the environment, consumers right to know and to implement the precautionary principle. To achieve these legitimate objectives, governments may consider it necessary to regulate GMO products themselves, rather than merely offering labels for products that do not contain GMOs.

Earlier, it was argued that the SPS Agreement does not apply to GMO labeling. However, in the event a WTO panel decides that a GMO labeling scheme or some aspects of a scheme does fall within the scope of the SPS Agreement, the arguments set out below may be made to support GMO labeling. These arguments address the three main disciplines in the SPS Agreement: (1) measures must be based on a risk assessment and scientific evidence; (2) measures must not create "arbitrary or unjustifiable discrimination" or "disguised restrictions on international trade;" and (3) measures must not be more "trade restrictive than required." The arguments here are

The SPS Agreement requires Members to base their SPS measures on a risk assessment and on available scientific evidence. To satisfy this requirement there must be a "rational relationship" between the SPS measure and a risk assessment.[28] It is unlikely that many existing GMO labeling schemes are based on a risk assessment. In the event a compulsory GMO labeling scheme is reviewed under the SPS Agreement, the WTO may require the implementing Member to undertake a risk assessment in order to provide a scientific basis for the label. In cases where scientific evidence is available but insufficient, a Member may adopt provisional SPS measures on a precautionary basis and must, within a reasonable time, seek additional information in order to undertake a more objective assessment of the risks.[29]

The SPS Agreement includes two related obligations that address discrimination and disguised restrictions on international trade. These obligations are specialized applications of the general environmental exception in Article XX of the GATT, refined for specific context of the SPS Agreement.

The first obligation provides that Members must avoid arbitrary or unjustifiable distinctions in the levels of SPS protection they consider appropriate in different situations, if such distinctions would result in discrimination or a disguised restriction on international trade. Applying this obligation to GMO labeling is difficult because labeling does not address the level of SPS protection afforded by GMO products, but merely provides consumers with information about the nature of the product. There can thus be no sensible discussion of whether the levels of protection are different, or whether any difference results in discrimination or disguised restrictions on international trade. As noted by the Appellate Body, "comparison of several levels of sanitary protection deemed appropriate by a Member is necessary if a panel’s inquiry under [this obligation] is to proceed at all."[30]

Second, Members must not arbitrarily or unjustifiably discriminate between Members where identical or similar conditions prevail, including between their own territory and that of other Members, and they must not use their SPS measures to cause disguised restrictions on international trade. This obligation is more general than the first and may therefore find some application to GMO labeling. A challenging country may argue that a compulsory GMO labeling scheme causes arbitrary or unjustifiable discrimination. The success of such a claim will depend on the particular labeling scheme being challenged. However, for reasons similar to those given above in relation to Article XX, it is unlikely that GMO labeling discriminates between Members (as opposed to products), or that, in light of the many justifications for GMO labeling, any discrimination could reasonably be characterized by a WTO panel as arbitrary or unjustifiable. For similar reasons, it would be unreasonable for a panel to characterize labeling as a disguised restriction on international trade.

Because of the close relationship between the SPS Agreement and Article XX, Article 2.4 of the SPS Agreement states that compliance with the provisions of the SPS Agreement constitutes full satisfaction of the provisions of Article XX of GATT 1994.

The SPS Agreement requires measures to minimize impacts on international trade. In particular, it requires Members to ensure that SPS measures are "not more trade restrictive than required to achieve their appropriate level of sanitary or phytosanitary protection, taking into account technical and economic feasibility." A measure will not be more trade restrictive than required, reasonably available taking into account technical and economic feasibility, that achieves the appropriate level of ... protection and is significantly less restrictive to trade." The analysis here will, once again, parallel that under the TBT Agreement’s requirement discussed above GMO labels are not more trade restrictive than necessary.

However, under the SPS Agreement, it is unclear whether non-health-related factors can be used to justify a measure. It could be argued, for example, that certain compulsory GMO labeling schemes are more trade restrictive than required to achieve their heath goals, as they require the labeling of all GMOs, some of which may present no additional risks to health. A challenging country may assert that a substantial equivalence approach to labeling is a reasonably available and substantially less trade restrictive way to achieve the appropriate level of protection. The problem with this approach is that it ignores the primary, non-health-related reasons for GMO labeling. It also suffers from the systemic problem that labels are not really aimed at achieving an "appropriate level of sanitary or phytosanitary protection," but rather at providing consumers with information.

Like the TBT Agreement, the SPS Agreement requires measures to be "based on" on international standards. "Based on" requires a rational relationship between the measure and the standard, but does not require the measure to achieve the same level of SPS protection as the international standard.

The SPS Agreement specifically defines international standards to include those set by Codex.[31] The decision of the Codex Committee on Food Labeling will thus set a benchmark against which national GMO labeling schemes are measured. If the CCFL adopts a substantial equivalence test then schemes requiring all GMO products to be labeled (and not merely those shown to differ from existing products) may be more vulnerable to challenge under the SPS Agreement.

Under the SPS Agreement, Members may deviate from international standards where there is a scientific justification or where they have determined that a higher level of protection than afforded by the international standard is required. As noted already, where relevant scientific information is insufficient, Members may adopt provisional, precautionary measures subject to the requirement that they continue to seek information necessary for a more objective assessment of risk. Nonetheless, if Codex adopts a substantial equivalence test for GMO labeling then it will be significantly more difficult for Members with compulsory GMO labeling schemes to justify their measures.

While the relationship between GMO labeling schemes and WTO rules is complex, it is possible to interpret WTO rules in a way that allows GMO labeling schemes to operate without interference by the international trade system. Policy makers and the public must now work to promote appropriate interpretations in international trade disputes, at the upcoming WTO Ministerial in Seattle, and in subsequent trade negotiations. Finally, when working at the international level, individuals, private organizations and governments, should strive to ensure that decisions taken in international fora such as Codex support the consumers’ right to know about the genetic modification of products. If such support is secured, the likelihood that GMO exporting nations can successfully use the WTO to undermine the consumers’ right to know, and to prevent consumers choosing products in line with their social, ethical, religious, dietary and environmental preferences will, accordingly, be reduced.

Recognizing the important contribution that international standards and conformity assessment systems can make in this regard by improving efficiency of production and facilitating the conduct of international trade;

Desiring therefore to encourage the development of such international standards and conformity assessment systems;

Desiring however to ensure that technical regulations and standards, including packaging, marking and labeling requirements, and procedures for assessment of conformity with technical regulations and standards do not create unnecessary obstacles to international trade;

Recognizing that no country should be prevented from taking measures necessary to ensure the quality of its exports, or for the protection of human, animal or plant life or health, of the environment, or for the prevention of deceptive practices, at the levels it considers appropriate, subject to the requirement that they are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail or a disguised restriction on international trade, and are otherwise in accordance with the provisions of this Agreement;

1.5 The provisions of this Agreement do not apply to sanitary and phytosanitary measures as defined in Annex A of the Agreement on the Application of Sanitary and Phytosanitary Measures.

2.1 Members shall ensure that in respect of technical regulations, products imported from the territory of any Member shall be accorded treatment no less favourable than that accorded to like products of national origin and to like products originating in any other country.

2.2 Members shall ensure that technical regulations are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade. For this purpose, technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create. Such legitimate objectives are, inter alia: national security requirements; the prevention of deceptive practices; protection of human health or safety, animal or plant life or health, or the environment. In assessing such risks, relevant elements of consideration are, inter alia: available scientific and technical information, related processing technology or intended end-uses of products.

…

2.4 Where technical regulations are required and relevant international standards exist or their completion is imminent, Members shall use them, or the relevant parts of them, as a basis for their technical regulations except when such international standards or relevant parts would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued, for instance because of fundamental climatic or geographical factors or fundamental technological problems.

4.1 Members shall ensure that their central government standardizing bodies accept and comply with the Code of Good Practice for the Preparation, Adoption and Application of Standards in Annex 3 to this Agreement (referred to in this Agreement as the "Code of Good Practice"). They shall take such reasonable measures as may be available to them to ensure that local government and non-governmental standardizing bodies within their territories, as well as regional standardizing bodies of which they or one or more bodies within their territories are members, accept and comply with this Code of Good Practice. In addition, Members shall not take measures which have the effect of, directly or indirectly, requiring or encouraging such standardizing bodies to act in a manner inconsistent with the Code of Good Practice. The obligations of Members with respect to compliance of standardizing bodies with the provisions of the Code of Good Practice shall apply irrespective of whether or not a standardizing body has accepted the Code of Good Practice.

1. Technical regulation

Document which lays down product characteristics or their related processes and production methods, including the applicable administrative provisions, with which compliance is mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labeling requirements as they apply to a product, process or production method.

2. Standard

Document approved by a recognized body, that provides, for common and repeated use, rules, guidelines or characteristics for products or related processes and production methods, with which compliance is not mandatory. It may also include or deal exclusively with terminology, symbols, packaging, marking or labeling requirements as they apply to a product, process or production method.

Reaffirming that no Member should be prevented from adopting or enforcing measures necessary to protect human, animal or plant life or health, subject to the requirement that these measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between Members where the same conditions prevail or a disguised restriction on international trade;

Desiring to improve the human health, animal health and phytosanitary situation in all Members;

…

Desiring the establishment of a multilateral framework of rules and disciplines to guide the development, adoption and enforcement of sanitary and phytosanitary measures in order to minimize their negative effects on trade;

Recognizing the important contribution that international standards, guidelines and recommendations can make in this regard;

Desiring to further the use of harmonized sanitary and phytosanitary measures between Members, on the basis of international standards, guidelines and recommendations developed by the relevant international organizations, including the Codex Alimentarius Commission, the International Office of Epizootics, and the relevant international and regional organizations operating within the framework of the International Plant Protection Convention, without requiring Members to change their appropriate level of protection of human, animal or plant life or health;

1.4. Nothing in this Agreement shall affect the rights of Members under the Agreement on Technical Barriers to Trade with respect to measures not within the scope of this Agreement.

2.1. Members have the right to take sanitary and phytosanitary measures necessary for the protection of human, animal or plant life or health, provided that such measures are not inconsistent with the provisions of this Agreement.

2.2. Members shall ensure that any sanitary or phytosanitary measure is applied only to the extent necessary to protect human, animal or plant life or health, is based on scientific principles and is not maintained without sufficient scientific evidence, except as provided for in paragraph 7 of Article 5.

2.3. Members shall ensure that their sanitary and phytosanitary measures do not arbitrarily or unjustifiably discriminate between Members where identical or similar conditions prevail, including between their own territory and that of other Members. Sanitary and phytosanitary measures shall not be applied in a manner which would constitute a disguised restriction on international trade.

3.1. To harmonize sanitary and phytosanitary measures on as wide a basis as possible, Members shall base their sanitary or phytosanitary measures on international standards, guidelines or recommendations, where they exist, except as otherwise provided for in this Agreement, and in particular in paragraph 3.

3.2. Sanitary or phytosanitary measures which conform to international standards, guidelines or recommendations shall be deemed to be necessary to protect human, animal or plant life or health, and presumed to be consistent with the relevant provisions of this Agreement and of GATT 1994.

3.3. Members may introduce or maintain sanitary or phytosanitary measures which result in a higher level of sanitary or phytosanitary protection than would be achieved by measures based on the relevant international standards, guidelines or recommendations, if there is a scientific justification, or as a consequence of the level of sanitary or phytosanitary protection a Member determines to be appropriate in accordance with the relevant provisions of paragraphs 1 through 8 of Article 5. Notwithstanding the above, all measures which result in a level of sanitary or phytosanitary protection different from that which would be achieved by measures based on international standards, guidelines or recommendations shall not be inconsistent with any other provision of this Agreement.

5.1. Members shall ensure that their sanitary or phytosanitary measures are based on an assessment, as appropriate to the circumstances, of the risks to human, animal or plant life or health, taking into account risk assessment techniques developed by the relevant international organizations.

5.2. In the assessment of risks, Members shall take 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.

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: 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; the costs of control or eradication in the territory of the importing Member; and the relative cost-effectiveness of alternative approaches to limiting risks.

5.4. Members should, when determining the appropriate level of sanitary or phytosanitary protection, take into account the objective of minimizing negative trade effects.

5.5. With the objective of achieving consistency in the application of the concept of appropriate level of sanitary or phytosanitary protection against risks to human life or health, or to animal and plant life or health, each Member shall avoid arbitrary or unjustifiable distinctions in the levels it considers to be appropriate in different situations, if such distinctions result in discrimination or a disguised restriction on international trade. Members shall cooperate in the Committee, in accordance with paragraphs 1, 2 and 3 of Article 12, to develop guidelines to further the practical implementation of this provision. In developing the guidelines, the Committee shall take into account all relevant factors, including the exceptional character of human health risks to which people voluntarily expose themselves.

5.6. Without prejudice to paragraph 2 of Article 3, when establishing or maintaining sanitary or phytosanitary measures to achieve the appropriate level of sanitary or phytosanitary protection, Members shall ensure that such measures are not more trade-restrictive than required to achieve their appropriate level of sanitary or phytosanitary protection, taking into account technical and economic feasibility.

5.7. In cases where relevant scientific evidence is insufficient, a Member may provisionally adopt sanitary or phytosanitary measures on the basis of available pertinent information, including that from the relevant international organizations as well as from sanitary or 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 or phytosanitary measure accordingly within a reasonable period of time.

1. Sanitary or phytosanitary measure - Any measure applied:

(a) 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;

(b) to protect human or animal life or health within the territory of the Member from risks arising from additives, contaminants, toxins or disease-causing organisms in foods, beverages or feedstuffs;

(c) 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

(d) to prevent or limit other damage within the territory of the Member from the entry, establishment or spread of pests.

Sanitary or phytosanitary measures include all relevant laws, decrees, regulations, requirements and procedures including, inter alia, end product criteria; processes and production methods; testing, inspection, certification and approval procedures; quarantine treatments including relevant requirements associated with the transport of animals or plants, or with the materials necessary for their survival during transport; provisions on relevant statistical methods, sampling procedures and methods of risk assessment; and packaging and labeling requirements directly related to food safety.

1 Submission by the United States to the WTO Committee on Technical Barriers to Trade, "European Council Regulation No. 1139/98 Compulsory Indication of the Labeling of Certain Foodstuffs produced from Genetically modified Organisms," 16 October 1998, G/TBT/W/94.

2 In addition, labels may correct a second kind of market failure: the failure to provide the "public good" of information. Accurate information is an essential prerequisite for an efficiently functioning product market. Without it, consumers are unable to make informed decisions. Information about potential adverse effects is unlikely to be supplied at a "socially optimal" level without government intervention. This is particularly true in the case of GMO labeling, as the information sought is unlikely to benefit those holding it (i.e. corporations seeking to sell GMO products). A lack of information biases the market towards biotech products, where otherwise consumers would prefer non-GMO products. Labels remedy this, at least partially, by requiring companies to disclose information about the nature of their product.

3 Submission by the United States to the WTO Committee on Technical Barriers to Trade, supra note 1 at 4.

4 TBT Agreement, art. 1.5.

5 SPS Agreement, art. 1.4.

6 Article 1.4 of the SPS Agreement makes it clear that it should not be interpreted to reduce member's rights under the TBT Agreement. The SPS Agreement will only cover labeling regulations if they are "directly related to food safety." Other labeling schemes are governed by the TBT Agreement.

7 This approach also avoids the question of how to treat labeling schemes, or aspects of schemes, that fall outside the definition of SPS Measures (and therefore not covered by the SPS Agreement). For example, "labeling directly related to food safety" implies that labeling not directly related to food safety, and labeling of non-food products would not be covered. In addition, it seems unlikely that private schemes would fall within the definition of SPS Measures. Unlike the TBT Agreement, it does not set different obligations for "central government," "local government" and "non-governmental bodies" or set up a Code of Good Practice.7 Rather, the SPS Agreement contemplates measures enacted by Members.

8 Submission by the United States to the WTO Committee on Technical Barriers to Trade, supra note 1 at 2.

9 Japan – Alcoholic Beverages, supra note 9, at 23. See also, report of the GATT Working Party on Border Tax Adjustment, adopted on 2 December 1970 BISD 18S/97, 102 (stating that, when determining the meaning of the terms "like" or "similar" as used variously in the GATT "... the interpretation of the term should be examined on a case-by-case basis. This would allow a fair assessment in each case of the different elements that constitute a "similar" product. Some criteria were suggested for determining, on a case-by-case basis, whether a product is "similar": the product's end-uses in a given market; consumers' tastes and habits, which change from country to country; the product's properties, nature and quality."

10 Japan – Alcoholic Beverages, supra note 9, (citing the GATT Working Party on Border Tax Adjustment with approval).

11 Japan – Alcoholic Beverages, supra note 9.

12 Id., (stating "The concept of "likeness" is a relative one that evokes the image of an accordion. The accordion of "likeness" stretches and squeezes in different places as different provisions of the WTO Agreement are applied. The width of the accordion in any one of those places must be determined by the particular provision in which the term "like" is encountered as well as by the context and the circumstances that prevail in any given case to which that provision may apply.")

13 The General Interpretive Note to Annex 1A of the WTO Agreement states "In the event of conflict between a provision of the General Agreement of Tariffs and Trade 1994 and a provision of another agreement in Annex 1A to the Agreement Establishing the World Trade Organization ... the provisions of the other agreement shall prevail to the extent of any conflict." (emphasis added).

14 See, for example, Appellate Body in Canada-Certain Measures Concerning Periodicals, WT/DS31/AB/R, adopted 30 June 1997, and EC-Bananas, WT/DS27/AB/R, adopted 9 September 1997, (dealing with the potential overlapping coverage of GATT 1994 and GATS). See also, report of the panel in Indonesia - Certain Measures affecting the Automobile Industry, WT/DS64/R, adopted 2 July 1998, (examining the provisions of Article III of GATT, the Agreement on Trade-Related Investment Measures and the Agreement on Subsidies and Countervailing Measures). See also, Guatemala-Cement, WT/DS60/AB/R, adopted 2 November 1998, para. 65, (the Appellate Body, when discussing the possibility of conflicts between the provisions of the Anti-Dumping Agreement and the Dispute Settlement Understanding , stated: "A special or additional provision should only be found to prevail over a provision of the DSU in a situation where adherence to the one provision will lead to a violation of the other provision, that is, in case of a conflict between them.")

15 Wilfred Jenks, The Conflict of Law-Making Treaties, THE BRITISH YEARBOOK OF INTERNATIONAL LAW (BYIL) 1953, at 424.

16 EC Measures Concerning Meat and Meat Productss WT/D48/AB/R, adopted 16 January 1998, para. 104 (hereinafter Hormones).

17 See, TBT Agreement pmbl. (stating, "no country should be prevented from taking measures … for the protection of human animal or plant life or health, [or] of the environment … at the levels it considers appropriate, subject to the requirement that they are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail or a disguised restriction on international trade.")

18 Whether a measure is characterized as arbitrary or unjustifiable discrimination or a disguised restriction will be determined on a case-by-case basis, and may depend on a range of factors. These may include, for example, the risks posed by the GMO products; the extent of scientific uncertainty; the proportion of the market held by GMO products; the balance of trade in these products between the labeling country and the exporting country; the labeling criteria adopted; and the nature, number and size of the participants in the market.

19 See, United States – Restrictions on Import of Tuna, 1991 WL 771248, unadopted GATT panel report, at para. 5.24.

20 See, SPS Agreement, footnote 3 (to art. 5.6).

21 Submission by the United States to the WTO Committee on Technical Barriers to Trade, supra note 1, at 2.

22 See, Thailand – Restrictions on Importation of and Internal Taxes on Cigarettes, adopted 7 November 1990, (DS10/R – 37S/200), para. 77, (stating "strict, non-discriminatory labeling and ingredient disclosure regulations ... allowed governments to control, and the public to be informed of, the content of cigarettes. A non-discriminatory regulation implemented on a national treatment basis in accordance with Article III:4 requiring complete disclosure of ingredients, coupled with a ban on unhealthy substances, would be ... consistent with the General Agreement.")

23 See, M. Stilwell and B. Van Dyke, Codex, Substantial Equivalence and WTO Threats to GMO Labeling Schemes, CIEL paper 1998 (available on web at http://www.econet.apc.org/ciel/).

24 Hormones, supra note 16, at para 163.

25 Id.

26 See also, TBT Agreement, art. 12 (requiring Members to:

"… provide technical assistance to developing country Members to ensure that the preparation and application of technical regulations, standards and conformity assessment procedures do not create unnecessary obstacles to the expansion and diversification of exports from developing country Members.")

27 SPS Agreement, arts. 10 and 12. TBT Agreement, arts. 12 and 13.

28 Hormones, supra note 16, at para 194. (noting that there is no requirement that the risk assessment be carried out by the nation implementing the SPS measure. The measure may be based on a risk assessment taken by another country or an international organization). Id., para 190.

29 SPS Agreement, Article 5.7.

30 Hormones, supra note 16, at para 217.

31 SPS Agreement, pmbl. (stating "Desiring to further the use of harmonized sanitary and phytosanitary measure between Members, on the basis of international standards, guidelines and recommendations developed by the relevant international organizations including the Codex Alimentarius Commission.") See also, Annex A ("defining" international standards, guidelines and recommendations" as including those "for food safety, the standards, guidelines and recommendations established by the Codex Alimentarius Commission relating to food additives, ..., contaminants, methods of analysis and sampling, and codes and guidelines of hygenic practice.")