This discussion paper offers some preliminary observations about proposals for the upcoming WTO Seattle Ministerial by three countries - the United States, Canada and Japan - to consider trade in genetically modified organisms (GMOs) at the WTO. These proposals raise significant issues for WTO Members - in particular developing countries - and civil society including:

• the potential that possible new WTO disciplines on trade in GMO products will deregulate rather than regulate trade in biotechnology products at the national level, thereby limiting governments' ability to set national laws to test, and to control the import of, genetically modified food products on the basis of the precautionary principle;
• the proper relationship between possible new WTO disciplines and the need to regulate the transboundary movement of GMOs more effectively at the international level, including through an effective Biosafety Protocol;
• the potential for new WTO disciplines to constrain national labeling schemes designed to promote the consumer's right to know about GMOs;
• the proper role and limits of the multilateral trading system and whether the WTO should consider the "new issue" of trade in GMOs, including whether its inclusion will unbalance the existing negotiating agenda; and
• broader questions about food security, agriculture, environmental protection, human and animal health, and equitable development.

This discussion paper is not intended to offer a comprehensive overview of this subject, but rather hopes to provide a useful starting point for further analysis.

Genetic engineering is a revolutionary technology. It has advanced to the stage that it now allows scientists to change the characteristics of living organisms by transferring the genetic information from one organism, across species boundaries into another, to create a genetically modified organism (GMO). As such, genetic engineering allows the transfer of genetic material between organisms that would never be able to breed in any natural or laboratory setting. For example, genetic information from humans has been inserted into pigs, and fish genes into tomatoes. While genetic engineering promises benefits to society, its revolutionary nature raises great ethical, social, environment and development issues, and new regulatory challenges (see Box 1).

Developing countries, in particular, have a strong interest in regulating genetic engineering. This interest has been articulated clearly at the Biosafety Protocol negotiations at which developing countries have promoted strong multilateral rules to govern the transboundary movement of GMOs. Issues of food safety, biodiversity benefit sharing, and intellectual property also suggest the need for careful consideration of the benefits and burdens of biotechnology. Currently, most genetically engineered crops are proprietary, and are owned almost exclusively by the private sector in industrialized countries. Consequently, biotechnology may also have implications for the ownership of food production and distribution systems. As noted by a recent industry report, "biotechnology-driven consolidations in the form of acquisitions, mergers and alliances continue to be a dominant feature of the biotechnology industry. ... This consolidation is expected to continue. Genomics is pivotal to the growth of the industry and is catalyzing a new generation of alliances, acquisitions and mergers."

International production and trade in GMO products has increased rapidly. This increase, however, is currently accounted for by only a small number of WTO Members. According to one report, between 1996 and 1998, eight countries contributed to more than a fifteen-fold increase in the global area planted with genetically modified crops. Currently, 98% of this area is accounted f or by three countries - the United States, Canada and Argentina. These countries now form the core of a "biotech alliance" that has formed to promote their joint interests - and those of their large biotech and agribusiness firms - at the national and international level. The remaining 2% is accounted for by Australia, Mexico, Spain, France and South Africa. The five principal genetically modified crops planted in these countries were (in descending order) soybean, corn/maize, cotton, canola/rapeseed and potato. The United States (which has agriculture as its largest trade asset) in 1998 planted 50% of cornfields and 48% of soy fields with genetically modified varieties. Similarly, approximately 47% of Canada's canola crop was genetically modified (See Box 2).

Investment by these countries in biotechnology has occurred against a backdrop of declining consumer confidence in large export markets, widespread calls by scientists, consumers and the public for greater GMO regulation, and reports of declining GMO-related economic benefits. Having misjudged consumer markets and, arguably, over-invested in GMO products, GMO-exporting countries are now seeking to protect their export markets, and to establish a system of international rules that paves the way for future expansion of their biotech and agribusiness firms. Pursuing the development of new WTO disciplines forms an essential part of this strategy.

Currently, few developing countries have invested in genetically modified crops. However, some may be concerned that biotech and agribusiness companies may have imported and planted genetically modified seeds without their knowledge. If so, these countries are now placed in a difficult position, and may find themselves simultaneously regulating GMOs at home, while considering whether to support new disciplines on national regulations at the WTO. In the coming weeks and months, these countries are likely to come under significant pressure from the main GMO-exporting countries to join them to promote new WTO disciplines.

In the short term these countries must protect their market access. Ultimately, however, it may be wiser to adopt a "wait and see" approach, and to resist the temptation to join forces with GMO-exporting countries.

A number of perspectives support this view. In terms of export strategy, rapidly changing consumer markets and negative economic reports suggest that developing countries may be better advised to characterize themselves as "GMO-free" alternatives to the main GMO-exporters. In terms of domestic economic policy, it may be preferable to invest scarce administrative resources regulating biotech and agribusiness firms to guarantee competitive agricultural markets, and to maintain sufficient non-GMO products to satisfy changing consumer markets at home and abroad. And in terms of environmental policy, it may be wise to enact strong national environmental rules for GMO products, and to promote the conclusion of a strong Biosafety Protocol to protect against GMO-related risks to biodiversity.

Examination of lawmaking at national and international levels reveals a consistent pattern of behavior by the governments that have the most to gain from the biotech industry. As discussed below, to promote their joint interests, they have systematically advanced national and international laws that benefit their biotech and agribusiness industries, and have challenged national and international laws that burden it. The WTO is no exception to this pattern, and in preparation for upcoming negotiations three countries - United States, Canada and Japan - have called for the WTO to consider GMO-related trade issues.

The United States has called for the WTO to address "disciplines to ensure trade in agricultural biotechnology products is based on transparent, predictable and timely processes." This proposal provides little information about the nature or content of new disciplines or how they may relate to existing commitments in the Agreement on Agriculture or other WTO agreements. The United States has declared its firm decision not to seek the reopening of the SPS Agreement (the Agreement on the Application of Sanitary and Phytosanitary Measures ), but will not announce a finalized position on biotech for the Ministerial until mid-November.

Canada has called for the creation of a WTO Working Party on Biotechnology. It argues that the WTO should "engage in a collective exercise aimed at establishing how trade and investment in biotechnology are covered by existing WTO provisions and whether the latter constitute a sufficiently effective regime from the WTO perspective." This Working Party would report within one year (two years within the limit set for future negotiations). It would provide any conclusions it considers appropriate, and its work would "not be prejudicial as to the need, or not, of any future negotiations...".

Japan argues that the WTO should "establish an appropriate forum to address new issues, including GMOs". This could form "a sub-group of an independent negotiating group on agriculture to identify topics on food-related matters of GMOs" and, according to Japan, could consider, among other things, whether "the relevant WTO agreements, such as SPS, TBT and TRIPs ... are capable of responding to [GMO-related] matters".

These proposals are explicitly included in the draft Seattle Ministerial Text. The Canadian and Japanese proposals go further than the United States' current proposal. Given the close history of cooperation between Canada and the United States on this issue, however, the former's position may be seen as providing the latter with a good "flank". In the event the Canadian proposal is unsuccessful, the United States' becomes the obvious "fall-back" position. Other WTO Members may wish to consider this carefully when setting their initial negotiating position.

Currently, the WTO includes no explicit disciplines on national measures to regulate GMOs. Rather, GMOs are considered along with the other products that are covered by the multilateral trading system (see Box 3). However, it is clear from the above proposals, and from statements at the WTO and elsewhere, that GMO-exporting countries consider these existing WTO obligations to be insufficient and are thus likely to seek new WTO disciplines. The ultimate form of these is unclear. Nevertheless, it is likely that they would be intended to further constrain the ability of importing countries to regulate GMO products, and may conceivably include:

• further disciplines on national GMO approvals to ensure, what is termed as, "transparent, predictable and timely" processes. This may involve re-interpretation of the SPS and/or TBT Agreements. The terms "timely" and "predictable" may, for example, give rise to constraints for national regulators, who would face deadlines for dealing with GMO products that may need time consuming testing procedures to avoid unpredictable consequences for biodiversity and environment;
• additional, so-called, "science-based" disciplines on national GMO regulatory and labeling schemes. This may, again, involve a re-interpretation of the SPS and/or TBT Agreements;
• new WTO rules on "investment" in biotechnology (notably the Canadian proposal mentions both "trade and investment");
• increased WTO protection of intellectual property rights under the TRIPs Agreement by, for example, encouraging broad acceptance by WTO Members of UPOV 91;
• other measures targeted at reducing the scope of the Biosafety Protocol, and forestalling its successful conclusion.

WTO proposals to consider GMOs must be viewed in light of activities in other international fora. Because GMOs raise such a variety of issues - food security, intellectual property, biodiversity, economic development, health, trade and others - they are being considered in a number of international institutions. The list below is not comprehensive, but identifies the most important discussions as they relate to the WTO. As discussed below, GMO-exporting countries are working systematically at the Biosafety Protocol negotiations, the Codex Alimentarius Commission, the Organization for Economic Cooperation and Development (OECD), the Transatlantic Economic Partnership and in other international fora to promote their joint interests. The following section discusses the relationship between these institutions and the WTO. WTO Members and civil society must thus ensure that they follow these developments closely, and coordinate to ensure that their best interests are represented.

The Biosafety Protocol is currently being negotiated under the auspices of the Convention on Biological Diversity to provide rules for the transboundary movement of "living modified organisms". The goal of the Protocol is to address the threats posed by GMOs to biological diversity.

To address these threats, early drafts of the Protocol included measures for the tracking and labeling of GMO products, and provisions for liability and compensation for GMO-related environmental damage. These provisions, which were promoted by "like minded" developing countries, were ultimately removed from recent drafts of the Protocol under pressure from a small group of GMO-exporting countries known as the Miami Group.

This group, comprising the United States, Canada, Argentina, Uruguay, Chile and Australia, cited WTO perceived conflicts as a principal reason for downgrading the Protocol's obligations. In addition to removing from the most recent version of the text provisions for labeling, and for liability and compensation, the Protocol's provisions on "advanced informed agreement" of GMO shipments, and the Protocol's scope (i.e. the products it covers), were narrowed to minimize any negative impact on the Miami Group's trade prospects. Among the Miami Group's goals was to exclude all GMOs destined for human or animal consumption from the Protocol. In addition, GMO exporting countries pushed to include a "savings clause" in the Protocol's text, with the goal of subordinating the Protocol to the WTO agreements. After the negotiations collapsed in Cartegena, Colombia in February 1999 and again showed few signs of moving significantly forward at the informal discussions in Vienna, September 1999 the Biosafety Protocol negotiating group will meet in January 2000 to reconvene discussions.

In light of this history, WTO Members may wish to give careful consideration as to how the above proposals to bring biotech discussions to the WTO may affect the Biosafety Protocol negotiations. Again, given the early stage of discussions of GMO-related issues at the WTO, it is difficult to predict how this debate may develop. Nevertheless, a number of possibilities arise.

First, GMO-exporting countries may seek to use WTO discussions to further delay the conclusion of the Biosafety Protocol negotiations. For example, they could argue that the negotiations should be stayed until the proposed WTO Working Group on Biotechnology has concluded its "fact finding" work.

Second, WTO disciplines - either existing or new ones - could be used to further reduce the scope of the Protocol. During the Biosafety negotiations, the Miami Group sought to narrow the scope of the Protocol by excluding GMO commodities. A broad definition of "agricultural biotechnology products" at the WTO may be used to exert further pressure to reduce the scope of the Biosafety Protocol.

Third, in addition to narrowing its scope, WTO discussions could conceivably be used to further weaken the Biosafety Protocol's provisions. For example, new WTO disciplines to ensure the "timely" approval of shipments of GMO products may cut against the Biosafety Protocol's provisions on "advanced informed agreement". During the negotiations, Miami Group members argued that these provisions may lead to unnecessary delays.

Fourth, any new "science-based" disciplines that are promoted by GMO-exporting countries may support the Miami Group's efforts to delimit the role of the precautionary principle in the Biosafety Protocol. In addition, new obligations to prove risk before regulating GMO products may be especially burdensome for developing countries, which may lack the scientific and technical capacity to test shipments of GMO products.

Fifth, moving GMO issues into the WTO may change the negotiating dynamic. Considering GMO issues at the WTO may allow GMO-exporting nations to take advantage of the WTO's pro-trade orientation, to exploit developing countries limited capacity to coordinate activities in numerous international fora, and to undermine developing countries' strong position at the Biosafety Protocol and other international fora by negotiating anew with trade delegates who have not closely followed these negotiations.

Finally, as noted above, during the Biosafety Protocol negotiations GMO-exporting countries are using uncertainty about WTO rules to try to undercut the Protocol. By bringing GMO issues to the WTO, they increase the likelihood of their resolving this perceived uncertainty in their favor by promoting new WTO disciplines. Rather than requiring new disciplines on national regulation, dealing with GMO-related risks requires stronger regulation and regulatory capacity.

The Codex Alimentarius Commission (of the FAO/WHO) is considering rules for the labeling of products containing GMOs. Its relevant body, the Codex Committee on Food Labeling, is considering the adoption of an international standard for GMO labeling that is based on a "substantial equivalence" test. The discussions at Codex are important because they may affect the WTO-consistency of compulsory GMO labeling schemes, and may also illustrate the new GMO-related disciplines that GMO-exporting countries may seek to introduce through upcoming WTO negotiations.

Under a "substantial equivalence" test, a genetically engineered food that sufficiently resembles a conventional food product in outward characteristics would be considered substantially equivalent, presumed safe and treated the same as the non-genetically engineered food product. This test, which is promoted at Codex by a small group of GMO-exporting countries, provides an inadequate basis for regulatory and labeling schemes. In addition to doubts about its scientific credibility , this approach fails to consider "non-science" factors such as the consumer's right to know about GMOs for ethical, religious and other such reasons.

In addition, a "substantial equivalence" test may also threaten the WTO-consistency of national compulsory GMO labeling schemes. Interpreted properly, existing WTO rules should not restrict the ability of national governments to implement GMO labeling schemes. For example, the WTO's "non-discrimination" obligations, interpreted properly, will not undermine national GMO labeling because GMO and non-GMO products are not "like products" as they are physically dissimilar. This physical difference arises because, as a result of modification to develop different characteristics, these products contain DNA and/or proteins that their natural counterparts do not. To the extent these physical differences cannot be easily ascertained at the border, "product-related processes and production methods" may be used to determine whether the products are genetically modified. Because GMO- and non-GMO products are not "like", a national labeling scheme that treats them differently should not be characterized as discriminating between like products.

This interpretation of WTO rules could be threatened if a substantial equivalence test is adopted at Codex. On the basis of such an international standard, a WTO dispute settlement panel may decide that GMO- and "substantially equivalent" non-GMO products are "like products".

Consequently a compulsory labeling scheme that requires the former, but not the latter, to be labeled could be found to contravene the WTO TBT Agreement's non-discrimination requirements that forbid WTO members from distinguishing among like products.

So far, the alliance of GMO-exporting countries has been unsuccessful in their efforts to promote a substantial equivalence test at Codex. However, in response to the EU and other countries' compulsory GMO labeling schemes, the United States has called for national labeling to be based on "sound science". This, in effect, is a call for the WTO to do what Codex failed to - to require labeling to be based on limited scientific methods of establishing differences between organisms, rather than on the precautionary principle or a broader "consumer's right to know" basis.

This proposed use of science to discipline national GMO-labeling schemes is, however, unsound. A number of factors support this conclusion. First, the term "sound science" is misleading as it implies that scientific testing is sufficient to address health risks. In fact, the basis of claims about sound science, the "substantial equivalence" test, is increasingly subject to criticism by the mainstream scientific community as "pseudo-scientific" and as an inappropriate basis for testing GMO products.

Second, as noted above, "science-based" approaches to labeling fail to recognize the right of a consumer to know whether a product contains a GMO for "non-science-based" reasons such as, ethical, dietary and religious factors.

Third, using "sound science" to deny consumers information about GMOs may also undermine public support for upcoming WTO negotiations and, more importantly, for the multilateral trading system itself. The WTO would likely be characterized as forcing countries to import, and consumers to consume GMO products against their religious, ethical, dietary, economic and environmental preferences.

Fourth, additional science-based disciplines would be especially burdensome for developing countries, and in particular the least developed, which may lack the technology, institutional and technical capacity both to test and label GMO products, and to avert GMO-related health and environmental damage arising from undiscovered and dangerous GMO products.

Finally, the use of "sound science" takes one step further the approach of the Miami Group in the Biosafety Protocol negotiations. In these negotiations, the group is seeking to avoid the development of a multilateral approach to tracking and labeling GMO products . The use of science-based WTO disciplines on labeling would limit the capacity of individual countries to develop comprehensive GMO regulations unless they could prove a scientific basis for distinguishing GMO from similar non-GMO products.

The OECD Working Group on Harmonization of Regulatory Oversight in Biotechnology, and its Task Force for the Safety of Novel Foods and Feeds, are undertaking a study of the implications of biotechnology. These groups have the mandate of reporting in 2000, "to oversee the implementation of the projects which have been established with the aims of promoting international harmonization of regulatory oversight of biotechnology among Member countries, while ensuring safety"

This analysis undertaken at the OECD will help prepare industrialized countries to participate in any WTO Working Group and subsequent negotiations. Currently, discussion at the OECD are occurring without substantial developing country input, and are may thus fail to adequately consider their interests. Moreover, a lack of similar discussions and investigations by developing countries may place them at a significant disadvantage in any future WTO discussions on biotechnology.

Arguably, to counter pro-biotech arguments at the WTO by GMO-exporting countries there is a need for developing countries to engage in a joint examination of the scientific, economic and legal issues surrounding biotechnology. Adequate preparation would be particularly important in the event that a WTO Working Group on Biotechnology is established with a one-year mandate.

The TEP has established a Biotechnology Working Group to improve coordination between EU and US authorization processes for GM products. The aim is to benefit Americans and Europeans by reducing the costs and time required for regulatory approval, and enhancing trade while ensuring that we maintain high standards of product and food safety. These countries are considering an "early warning and problem prevention mechanism" to prevent disputes over GMO trade. Developing countries may wish to examine US proposals for an early warning system as this may provide an indication of what the United States considers "transparent, predictable and timely processes".

Other international fora including the FAO and World Bank are considering GMO-related issues. The work in these fora should be considered when seeking a comprehensive review of international GMO-related activity.

The substantive and institutional inter-linkages arising from the development, commercialization and trade in GMO products are complex. Proposals to bring biotechnology discussions to the WTO threaten to add to this complexity, and raise serious issues for developing countries. As noted repeatedly throughout this discussion paper, it is too early to form precise conclusions about proposals to consider GMO-related issues at the WTO.

Nevertheless, given the complexity of the issue, and the likelihood that any future discussions would be unlikely to support the interests of developing countries, these countries and other WTO Members may wish to consider the following preliminary recommendations:

• argue that existing WTO disciplines are adequate to deal with market access concerns relating to GMO products, and that further disciplines are not required;
• note that Article 5.7 of the SPS Agreement allows countries to invoke the precautionary principle and take provisional measures to stop imports. It is then incumbent on them to substantiate their action with the necessary risk assessment. In the area of GMOs, it should be understood that the burden of proof is on the exporter to provide adequate scientific evidence that the products are safe;
• agree that GMO products cannot be treated as 'like products' under the provisions of the TBT Agreement. Therefore, labeling of GMO products cannot be challenged as discriminatory under that Agreement. GMO products are unlike non-GMO products on the basis of the traditional WTO test for determining likeness of products which considers: 1) consumer's tastes and habits 2) the products' physical characteristics and 3) the products properties, nature and qualities;
• insist that, in view of the linkages between GMOs and IPR protection, the mandated substantive review of Article 27.3(b) should be completed soon, and that sufficient time (i.e. 5 years from the date of completion of the review) should be given to developing countries to implement this Article. Moreover, national sui generis systems to protect plant varieties should be compatible with countries` obligations under the Convention on Biological Diversity and the FAO International Undertaking for Plant Genetic Resources;
• note Japan's characterization of GMOs as a "new issue" and argue against the inclusion, through a Working Group or other mechanism, of such a complex and multifaceted new issue at short notice. The introduction of broad discussions on GMOs threatens to overburden developing countries and imbalance the agenda of future negotiations;
• consider any narrower proposals (such as the United States') to negotiate new rules on agricultural biotechnology products in light of the broader context of cross-issue and cross-institutional linkages. Consideration of possible new disciplines, if any, should be preceded by a successful conclusion of the Biosafety Protocol and balanced by a comprehensive package of measures for developing countries;
• request study of the impact of agricultural biotechnology on developing countries in preparation for possible future WTO discussions. This may be undertaken with the assistance of relevant international organizations including FAO, UNEP, UNCTAD, UNDP and CGIAR.

• support the Biosafety Protocol negotiations and push for an early conclusion of this agreement. The Biosafety Protocol provides the appropriate forum for dealing with the GMO-related threats to biodiversity and the environment;
• ensure full coordination at both the national and international level between trade negotiators that attend the WTO, and environmental negotiators that attend the Biosafety Protocol as well as other relevant international fora. Such coordination is essential to ensure that trade negotiators are fully informed of the implications of agreeing to consider GMO-related issues at the WTO;
• take measures to ensure that developing country interests are adequately considered in ongoing discussions at the OECD, and by the European Communities and the United States in bilateral discussions.