EUROPEAN COMMUNITIES - MEASURES AFFECTING THE APPROVAL AND MARKETING OF BIOTECH PRODUCTS (WT/DS293) First Presentation of the Argentine Republic

Transcription

1 EUROPEAN COMMUNITIES - MEASURES AFFECTING THE APPROVAL AND MARKETING OF BIOTECH PRODUCTS (WT/DS293)

2 Page i LIST OF ANNEXES ARG-2 Healthy Food for Europe s Citizens. The European Union and Food Quality, Publication of the Publications Office of the European Communities, Luxembourg, 2000 ARG-3 Directive 2001/18/EC of the European Parliament and of the Council of 12 March 2001 on the deliberate release into the environment of genetically modified organisms and repealing Council Directive 90/220/EEC, published in the Official Journal No. 106 dated ARG-4 Council Directive 90/220/EEC of 23 April 1990 on the deliberate release into the environment of genetically modified organisms, published in the Official Journal No. L 330 dated ARG-5 Regulation (CE) No. 258/97 of the European Parliament and of the Council of 27 January 1997 concerning novel foods and novel food ingredients, published in the Official Journal No. L 043 dated ARG-6 See list of biotech agricultural products approved by the EC in State of play on GMO authorizations under EU law, MEMO/04/17, Brussels, January 28, 2004 ARG-7 Communication from the Commission, Journal of the European Communities C 55 dated Mach 2, 2002, COM(2002) 27 and Bulletin 1/2-2002

3 Page ii ARG-8 New Technologies in Agriculture - Biotechnology, Annex Summary details of draft Regulations on GM Food/Feed and Traceability - European Commissioner David Byrne, dated September 18, 2001 ARG-9 Conference A European approach to food safety and GMOs, by David Byrne, dated October 9, 2001 ARG-10 Conference Farm to Fork - Risk versus benefit, by David Byrne, dated November 22, 2001 ARG-11 Report by Antonios Trakatellis before the European Parliament, June 4, 2003, A5-0204, Recommendation for second reading on the common position of the Council with a view to adopting a European Parliament and Council regulation on traceability and labeling of genetically modified organisms and the traceability of food and feed products produced from genetically modified organisms and amending Directive 2001/18/EC ARG-12 Declaration by the Danish, Greek, French, Italian and Luxembourg delegations concerning the suspension of new GMO authorisations, 2194 th Council Meeting -Environment-, Luxembourg, June 24/25, 1999 ARG-13 Bans imposed by EC Member States on specific biotech agricultural products ARG-14 EU moratorium on GMOs could last until traceability, labeling regime in place, International Trade Daily, October 30, 2001 ARG-15 Speeches and articles by Pascal Lamy, Steeling the EU-US

4 Page iii Relationship for the challenge ahead, Woodrow Wilson International Center for Scholars, Washington DC, January 25, 2002 ARG-16 Glossary from the EC web page ARG-17 Conference Genetics and the future of Europe, by David Byrne, November 7, 2000 ARG-18 Conference The right to know about genetically modified food, by David Byrne, July 25, 2001 ARG-19 Environment in the European Union at the turn of the century, Release of genetically modified organisms into the environment ARG-20 Conference Proposal for a regulation on GM Food and Feed, by David Byrne, September 11, 2001 ARG-21 Opinion of the Scientific Committee on Plants on the genetically modified cotton line, insect-tolerant notified by the Monsanto company (notification C/ES/96/02) (Opinion expressed by SCP on 14 July 1998), under Directive 90/220/EEC ARG-22 Advisory Committee on Novel Foods and Processes, Request of an article 5 opinion on the substantial equivalence of cottonseed oil and food ingredients derived from insect protected cottonseed, under Regulation (EC) 258/97 ARG-23 Opinion of the Scientific Committee on Plants regarding the genetically modified cotton, tolerant to glyphosate herbicide notified

5 Page iv by the Monsanto Company (notification C/ES/97/01) (Opinion expressed by the SCP on 14 July 1998), under Directive 90/220/EEC ARG-24 Advisory Committee on Novel Foods and Processes, Request of an article 5 opinion on the substantial equivalence of cottonseed oil and food ingredients derived from roundup ready cotton, under Regulation (EC) 258/97 ARG-25 Opinion of the Scientific Panel on Genetically Modified Organisms on a request from the Commission related to the Notification (Reference CE/ES/00/01) for the placing on the market of herbicide-tolerant genetically modified maize NK603, for import and processing, under Part C of Directive 2001/18/EC from Monsanto (Question No EFSA- Q ), under Directive 2001/18/EC ARG-26 Assessment of safety for the consumer, in accordance with the European Regulation 258/97 concerning Novel Foods and Novel Foods Ingredients. Health Council of the Netherlands: Committee on the Safety Assessment of Novel Foods N 2002/04VNV, The Hague, August 13, 2002, under Regulation (EC) 258/97 ARG-27 Opinion of the Scientific Panel on Genetically Modified Organisms on a request from the Commission related to the safety of foods and food ingredients derived from herbicide-tolerant genetically modified maize NK 603, for which a request for placing on the market was submitted under Article 4 of the Novel Food Regulation (EC) No 258/97 by Monsanto (Question No EFSA-Q ), Opinion adopted on 25 November 2003 ARG-28 GM Science Review, First Report, An open review of the science relevant to GM crops and food based on the interest and concerns of the public (July 2003), Executive Summary

6 Page v ARG-29 6-Regulation: EU (4): European Commission regards GMO moratorium as illegal, dated July 17, 2000 ARG-30 Report of the Scientific Committee for Animal Nutrition on the safety for animals of certain genetically modified maize lines notified by Cyba-Geigy in accordance with Directive 90/220/EEC for feedstuff use, dated December 13, 1996 ARG-31 Opinion of the Scientific Committee on Plants regarding submission for placing on the market of glufosinate tolerant maize (Zea mays) transformation event T25 by the Agrevo Company (Now Aventis Cropscience), (Notification C/F/95/12/07), SCP/GMO/299-Final, dated September 5, 2001 ARG-32 Opinion of the Scientific Committee on Food on a request to place genetically modified sweet maize line Bt 11 on the market (expressed on 17 April 2002), SCF/CS/NF/DOS/14 ADD2 Final, dated May 6, 2002 ARG-33 Opinion of the Scientific Committee on Plants on the submission for placing on the market of genetically modified insect resistant and glufosinate ammonium tolerant (Bt-11) maize for cultivation. Notified by Novartis Seeds SA Company (notification C/F/96/05-10) (opinion adopted by the Scientific Committee on Plants on 30 November 2000) ARG-34 Tables of non-biotech products approved in the EC and products pending approval under Regulation (EC) 258/97 ARG-35 Commission Decision of 22 April concerning the placing on the market

7 Page vi of genetically modified maize (Zea mays L. T25), pursuant to Council Directive 90/220/EEC ARG-36 Commission Decision of 22 April concerning the placing on the market of genetically modified maize (Zea mays line MON 810), pursuant to Council Directive 90/220/EEC ARG-37 97/98EC: Commission Decision of 22 January 1997 concerning the placing on the market of genetically modified maize (Zea mays L), with the combined modification for insecticidal properties conferred by Btendotoxin gene and increased tolerance to the herbicide glufosinate ammonium pursuant to Council Directive 90/220/EEC ARG-38 Commission Decision of 22 April concerning the placing on the market of genetically modified maize (Zea mays line Bt-11), pursuant to Council Directive 90/220/EEC ARG-39 GMOs: are there any risks? - Launch of a European Round Table on GMO Safety, dated October 8, 2001 ARG-40 Clive James, International Service for the Acquisition of Agri-Biotech Applications. Executive Summary. Preview Global Status of Commercialized Transgenic Crops: 2003.N ARG-41 Opinion of the Scientific Committee on Plants on the submission for placing on the market of genetically modified maize (Zea mays) line GA21 with tolerance to glyphosate herbicide notified by Monsanto, Notification C/ES/98/01) ARG-42 Opinion of the Scientific Committee on Food on the safety assessment

8 Page vii of the genetically modified maize line GA21, with tolerance to the herbicide glyphosate ARG-43 Opinion on the invocation by Germany of Article 16 of Council 90/220/EEC regarding the genetically modified BT-MAIZE LINE CG notified by CIBA-GEIGY (now NOVARTIS), notification C/F/94/11-03 (SCP/GMO/276Final - 9 November 2000) Opinion adopted by written procedure following the SCP meeting of 22 September 2000 ARG-44 Opinion of the Scientific Committee on Plants on the Invocation by Austria of Article 16 ( safeguard clause ) of Council Directive 90/220/EEC with respect to the placing on the market of the genetically modified maize (MON810) expressing the Bt cryia(b) gene, notification C/F/95/12-02, dated September 24, 1999 ARG-45 Opinion on the invocation by Austria of Article 16 of Council Directive 90/220/EEC regarding a genetically modified maize line T25, dated November 30, 2000 ARG-46 Opinion of the invocation by Austria of Article 16 of Council Directive 90/220/EEC regarding the genetically modified maize line T25 notified by Agrevo France, now Aventis Cropscience, ref. C/F/95/12-07 (Amended opinion adopted by the Scientific Committee on Plant, on 20 July 2001, replaces document SCP/GMO/289-Final adopted on 30 November 2000) ARG-47 Opinion of the Scientific Committee on Food concerning a submission from the Italian authorities raising concerns for the safety of certain products approved under the notification procedure of Regulation (EC) 258/97, CS/NF/DOS/11 ADD 4 REV 2 Final, expressed on September 7, 2000

9 Page viii

10 Page ix TABLE OF CONTENTS BACKGROUND FACTS AND COMMUNITY LEGISLATION ON THE MATTER SUBJECT OF THE COMPLAINT BY THE ARGENTINE REPUBLIC ORDER OF ANALYSIS ARGUMENTS I.- INTRODUCTION II.- INCONSISTENCY WITH THE SPS AGREEMENT A.- INCONSISTENCY OF THE DE FACTO MORATORIUM WITH THE SPS AGREEMENT The de facto moratorium as a measure within the framework of the SPS Agreement a.- The de facto moratorium is a sanitary or phytosanitary measure i) The de facto moratorium fits into Annex A:1, first paragraph, of the SPS Agreement, according to its objective ii) The de facto moratorium fits in Annex A:1, second paragraph, of the SPS Agreement, according to its form b.- The de facto moratorium affects international trade All sanitary or phytosanitary measures must be based on scientific evidence and must not constitute a disguised restriction of international trade The relationship between Article 2 and Article 5 of the SPS Agreement The de facto moratorium is inconsistent with Article 5.1 of the SPS Agreement The de facto moratorium is inconsistent with Article 2.2 of the SPS Agreement The de facto moratorium is unjustifiable under the exception stipulated in Article 5.7 of the SPS Agreement First requirement Second requirement Third requirement Fourth requirement Conclusion regarding Article 5.7 of the SPS Agreement The de facto moratorium is inconsistent with Article 5.5 of the SPS Agreement a.- First element: application of distinct levels of protection to different situations i) Biotech products before and after the de facto moratorium ii) New biotech agricultural products and new non-biotech products b.- Second element: arbitrary and unjustifiable differences in protection i) Biotech products before and after the de facto moratorium ii) New biotech agricultural products and new non-biotech products c.- Third element: discrimination and a disguised restriction on international trade i) Biotech products before and after the de facto moratorium ii) New biotech agricultural products and new non-biotech products Conclusion regarding Art. 5.5 of the SPS Agreement The de facto moratorium is incompatible with Article 2.3 of the SPS Agreement The de facto moratorium is incompatible with Article 7 and Annex B:1 of the SPS Agreement The de facto moratorium is incompatible with Art of the SPS Agreement CONCLUSION ON THE INCONSISTENCY OF THE DE FACTO MORATORIUM WITH RESPECT TO THE SPS AGREEMENT B.- INCONSISTENCY OF THE SUSPENSION OF PROCESSING AND FAILURE TO CONSIDER INDIVIDUAL APPLICATIONS FOR APPROVAL OF SPECIFIC BIOTECH AGRICULTURAL PRODUCTS OF PARTICULAR INTEREST TO ARGENTINA WITH THE SPS AGREEMENT Suspension of the approval processes for biotech agricultural products of particular interest to Argentina Inconsistency with the SPS Agreement The suspension of processing and failure to consider individual applications for approval of specific biotech agricultural products of particular interest to Argentina are inconsistent with Article 5.1 of the SPS Agreement- 66

11 Page x Non-existence of a risk assessment: Analysis of specific products Identification of the status of each of the biotech agricultural products covered under this complaint in terms of the existence of a risk assessment (i) Products that received a favorable risk assessment without subsequent approval (ii) Products that have not been the subject of a risk assessment and have not been approved Absence of a risk assessment: Legal arguments The suspension of processing and failure to consider individual applications for approval of specific biotech agricultural products of particular interest to Argentina are inconsistent with Article 2.2 of the SPS Agreement The suspension of processing and the lack of consideration of individual requests for the approval of determined biotech agricultural products of particular interest to Argentina are inconsistent with Article 5.5 of the SPS Agreement a.- First element: application of different levels of protection for different situations i) Biotech products before and after ii) Novel biotech products and novel non-biotech products b.- Second element: arbitrary and unjustifiable differences in protection i) Biotech products before and after ii) Novel biotech products and novel non-biotech products c.- Third element: discrimination and disguised restriction of international trade i) Biotech products before and after ii) Novel biotech agricultural products and novel non-biotech products Conclusion regarding Article 5.5 of the SPS Agreement The suspension of processing and the lack of consideration of individual applications for the approval of determined biotech agricultural products of particular interest to Argentina are inconsistent with Article 5.6 of the SPS Agreement CONCLUSION WITH RESPECT TO THE INCONSISTENCY WITH THE SPS AGREEMENT OF THE SUSPENSION OF PROCESSING AND FAILURE TO CONSIDER INDIVIDUAL APPLICATIONS FOR APPROVAL OF SPECIFIC BIOTECH AGRICULTURAL PRODUCTS OF PARTICULAR INTEREST TO ARGENTINA C.- INCONSISTENCY OF THE UNDUE DELAY IN THE PROCESSING OF INDIVIDUAL APPLICATIONS FOR APPROVAL OF BIOTECH AGRICULTURAL PRODUCTS OF PARTICULAR INTEREST TO ARGENTINA WITH THE SPS AGREEMENT Inconsistency of the undue delay in the completion of processing of the individual applications for approval of biotech agricultural products of particular interest to Argentina with Article 8 and Annex C of the SPS Agreement a.- Analysis of the relationship between Article 8 and Annex C 1 a), b), c) and e) of the SPS Agreement b.- Analysis of the inconsistencies of the undue delay in the processing of individual applications for approval of biotech agricultural products of particular interest to Argentina in light of the provisions of Article 8 and Annex C 1 a), b), C) and e) c.- Status of the biotech products of particular interest to Argentina: Inconsistencies in the application of Community legislation in light of the provisions of Article 8 and Annex C:1(a), (b), (c) and (e) of the SPS Agreement i) GA 21 Maize Procedure under which an application for approval was submitted. Status of the application and delay in processing. Scientific basis and favorable opinion ii) RR 1445 Cotton Procedure under which an application for approval was submitted. Status of the application and delay in processing. Scientific basis and favorable opinion iii) Bt-531 Cotton Procedure under which an application for approval was submitted. Status of the application and delay in processing. Scientific basis and favorable opinion iv) NK 603 Maize Procedure under which an application for approval was submitted. Status of the application and delay in processing. Scientific basis and favorable opinion v) Soy Lines A and A Procedure under which an application for approval was submitted. Status of the request and delay in processing CONCLUSION REGARDING THE INCONSISTENCY OF THE UNDUE DELAY WITH THE SPS AGREEMENT

12 Page xi III.- INCONSISTENCY WITH THE GATT THE SUSPENSION OF PROCESSING AND THE FAILURE TO CONSIDER INDIVIDUAL REQUESTS FOR APPROVAL OF DETERMINED AGRICULTURAL PRODUCTS OF PARTICULAR INTEREST TO ARGENTINA IS INCONSISTENT WITH THE GATT Incompatibility with Article III:4 of GATT a.- Like products in the framework of Article III:4 of the GATT i) Physical properties of imported biotech products and non-biotech domestic products ii) End-Use iii) Consumer Perceptions iv) Tariff classification b.- The suspension of processing and failure to consider individual applications for approval of specific biotech agricultural products of particular interest to Argentina are requirements affecting the sale, offering for sale, purchase, transport, distribution and use of products on the domestic market c.- Less favorable treatment is accorded CONCLUSION WITH RESPECT TO THE INCONSISTENCY OF THE SUSPENSION OF PROCESSING AND FAILURE TO CONSIDER INDIVIDUAL APPLICATIONS FOR APPROVAL OF SPECIFIC BIOTECH AGRICULTURAL PRODUCTS OF PARTICULAR INTEREST TO ARGENTINA WITH THE GATT 1994 AGREEMENT IV.- INCONSISTENCY WITH THE TBT AGREEMENT A.- ALTERNATIVE APPLICATION OF THE TBT AGREEMENT B.- INCONSISTENCY OF THE APPLICATION OF COMMUNITY LEGISLATION IN RELATION TO THE APPROVAL OF BIOTECH AGRICULTURAL PRODUCTS OF PARTICULAR INTEREST TO ARGENTINA WITH THE TBT AGREEMENT EC legislation for approval of biotech agricultural products constitutes technical regulations pursuant to Annex 1, paragraph 1 of the TBT Agreement The procedures under Community legislation for approval of biotech agricultural products constitute conformity assessment procedures The application of Community legislation is inconsistent with the obligations set forth in the TBT Agreement Application of Community legislation is inconsistent with Article 2.1 of the TBT Agreement Application of Community legislation is inconsistent with Article 2.2 of the TBT Agreement The application of Community legislation is inconsistent with Article of the TBT Agreement The application of EC legislation is inconsistent with Article of the TBT The application of EC legislation is inconsistent with Article of the TBT Inconsistency of the application of Community legislation with Article of the TBT Agreement Inconsistency of the application of Community legislation with Article 12 of the TBT Agreement CONCLUSION WITH RESPECT TO THE INCONSISTENCY OF THE APPLICATION OF COMMUNITY LEGISLATION TO BIOTECH AGRICULTURAL PRODUCTS OF PARTICULAR INTEREST TO ARGENTINA WITH THE TBT AGREEMENT V.- BANS BY VARIOUS EC MEMBER STATES All involved products have prior approval by EC authorities Rejection of the requests for special safeguard A.- MEMBER STATE BANS ARE INCONSISTENT WITH THE SPS AGREEMENT Framing of the EC Member State bans as measures under the SPS Agreement a.- The Member State bans in question are sanitary or phytosanitary measures i) The Member States bans fit into Annex A:1, first paragraph, of the SPS Agreement, according to their objective ii) The Member States bans fit into Annex A:1, second paragraph, of the SPS Agreement, according to their forms b.- The Member State bans affect international trade Each sanitary or phytosanitary measure must be based on scientific evidence The relation between Article 2 and Article 5 of the SPS Agreement The Member State bans are inconsistent with Article 5.1 of the SPS Agreement The Member State bans are inconsistent with Article 2.2 of the SPS Agreement The Member State bans are inconsistent with article 5.5 of the SPS Agreement a.- First element: application of different levels of protection in different situations b.- Second element: arbitrary and unjustifiable differences in protection

13 Page xii c.- Third element: discrimination and disguised restriction on international trade Member State bans are inconsistent with Article 2.3 of the SPS Agreement The State bans are inconsistent with Article 5.6 of the SPS Agreement CONCLUSION REGARDING THE INCONSISTENCY OF THE STATE BANS WITH THE SPS AGREEMENT B.- BANS OF EC MEMBER STATES ARE INCONSISTENT WITH GATT Inconsistency with Article III:4 of GATT a.- Like products in the sense of Article III:4 of GATT b.- The bans of some EC Member States are a law, regulation or requirement affecting the [products ] internal sale, offering for sale, purchase, transportation, distribution, or use c.- According of less favorable treatment CONCLUSION WITH RESPECT TO THE MEMBER STATE BANS BEING INCONSISTENT WITH THE GATT 1994 AGREEMENT C.- INCONSISTENCY OF THE BANS OF THE EC MEMBER STATES WITH THE AGREEMENT ON TECHNICAL BARRIERS TO TRADE -TBT EC legislation for approval of biotech agricultural products constitutes technical regulations pursuant to Annex 1, paragraph 1 of the TBT Agreement The Member State bans applied by some EC Member States to specific biotech agricultural products of particular interest to Argentina are inconsistent with Article 2.1 of the TBT Agreement The application of EC legislation is inconsistent with Article 2.2 of the TBT Agreement The bans of the Member States on specific biotech agricultural products of particular interest to Argentina are inconsistent with Article 2.9 of the TBT Agreement CONCLUSION WITH RESPECT TO THE MEMBERS STATE BANS BEING INCONSISTENT WITH THE TBT AGREEMENT VI.- REQUEST FOR FINDINGS

14 Page 1 BACKGROUND 1. On May 14, 2003, the requested a consultation with the European Communities (hereinafter, the EC ) in relation to certain measures that affect the approval and marketing of biotech agricultural products, pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), Article 11.1 of the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS), Article 19 of the Agreement on Agriculture (AA), Article 14.1 of the Agreement on Technical Barriers to Trade (TBT), and Article XXII.1 of the GATT The consultations were held on June 19, 2003, but failed to produce positive results. 2. On August 7, 2003, Argentina requested the establishment of a Panel to consider the measures relating to the approval and marketing of biotechnology products implemented by the EC The Panel was established on August 29, 2003, and the Director-General of the WTO defined the composition of the Panel in March Christian Häberli was appointed Chairman, and Mohan Kumar and Akio Shimizu were appointed Members 3. FACTS AND COMMUNITY LEGISLATION ON THE MATTER 4. The EC has affirmed their implementation of an oversight system for the approval and marketing of biotech agricultural products to ensure that food products that originate in non-member countries offer the same safety guarantees as food products that originate in the Member States 4. 1 See WT/DS293, G/L629, G/SPS/GEN/399, G/AG/GEN/62, G/TBT/D/30 (May 21, 2003). 2 See WT/DS293/17 (August 8, 2003). 3 See WT/DS291/24, WT/DS292/18, WT/DS293/18 (March 5, 2004). 4 See Healthy Food for Europe s Citizens. The European Union and Food Quality, Publication of the Publications Office of the European Communities, Luxembourg, 2000, page 4. See Annex ARG-2.

15 Page 2 5. The EC s system for the approval of biotech agricultural products ( genetically modified organisms or GMOs as they are designated in the EC legislation) or novel foods -designation used by the EC- requires that before said products can be marketed for consumption in Community territory, a specific procedure must be followed that governs the deliberate release into the environment of genetically modified organisms for any other purposes than placing on the market within the Community, as well as placing on the market genetically modified organisms as or in products. (Directive 2001/18/EC 5 and its predecessor Directive 90/220/EEC 6 ) and the placing on the market of novel foods and their ingredients (Regulation (EC) No. 258/97 7 ). 6. In particular, the above-referenced directives relate to biotech agricultural products that originate in non-member states, as indicated in Nos. 11 and 12 of the Preamble of Directive 2001/18/EC, which state: (11) Placing on the market also covers import. Products containing and/or consisting of GMOs covered by this Directive cannot be imported into the Community if they do not comply with its provisions. (12) Making GMOs available to be imported or handled in bulk quantities, such as agricultural commodities, should be regarded as placing on the market for the purpose of this Directive. 7. The EC regime operates as a system for approval of all biotech agricultural products prior to their release or placement on the market. Failing such approval, a biotech product may not be released or placed on the market in the EC. The legislation outlines the steps of the respective 5 Directive 2001/18/EC of the European Parliament and of the Council of 12 March 2001 on the deliberate release into the environment of genetically modified organisms and repealing Council Directive 90/220/EEC, published in the Official Journal No. 106 dated , hereinafter Directive 2001/18/EC. See Annex ARG-3. 6 Council Directive 90/220/EEC of 23 April 1990 on the deliberate release into the environment of genetically modified organisms, published in the Official Journal No. L 330 dated , p. 15, hereinafter Directive 90/220/EEC. See Annex ARG-4. 7 Regulation (CE) No. 258/97 of the European Parliament and of the Council of 27 January 1997 concerning novel foods and novel food ingredients, published in the Official Journal No. L 043 dated , p ; hereinafter Regulation (EC) 258/97. See Annex ARG-5.

16 Page 3 procedures with which an applicant must comply in order to obtain approval for such a product in the market and the standards by which the application for approval shall be judged. 8. Community legislation provides different procedures: on one hand, for the case of the deliberate release of biotech agricultural products into the environment (for purposes other than their placement on the market) and for the placement on the market of biotech agricultural products as products or ingredients in products (Directive 2001/18/EC and its predecessor Directive 90/220/EEC), and on the other hand for novel foods and their ingredients (Regulation (EC) 258/97). Although each of the procedures established in the above-mentioned directives will be explained in greater detail below, they can be summarized by differentiating the principal steps in the respective approval processes, namely: 9. Notification. The manufacturer or importer of the biotech agricultural product submits a notification and accompanying dossier to the competent body of the Member State where the product is to be placed on the market for the first time. The legislation specifies that the notification and dossier must include information about the notifying party, the nature of the biotech product (for example, the method of genetic modification used, the traits or characteristics introduced or modified), the commercial names to be used, the likely uses of the product, proposals for labeling or for restrictions on use, and any data on potential impacts on health or the environment. 10. Member State Assessment. The competent body in the Member State where the biotech agricultural product is to be placed on the market is responsible for an assessment of the notification and dossier to ensure that they comply with the technical requirements of the relevant legislation and determine whether the product should be placed on the market. After completing this assessment, the Member State sends a copy of its report to the European Commission. 11. Circulation of Assessment for Comment. The Commission circulates copies of the assessment to the other Member States for their review and comment. If there is no objection made during this comment period, the competent body of the Member State from which approval was initially

17 Page 4 sought consents in writing to placing the biotech agricultural product on the market. 12. Commission Decisions. If a Member State objects to placing the biotech agricultural product on the market, the Commission makes a ruling in accordance with specific procedures laid down in the approval legislation. First, the Commission requests an opinion from the relevant Scientific Committee. If the Committee renders a favorable opinion, the Commission proposes a draft measure to its Regulatory Committee, which delivers an opinion within a timeframe set by its chairman. If the Regulatory Committee s opinion is favorable, the Commission adopts the authorization decision. 13. Council Actions. If the Regulatory Committee does not render an opinion, or if it renders an unfavorable opinion, the Commission refers a proposal to the Council, which may take action by qualified majority. If the Council has not acted within three months of the date of the referral, the Commission adopts the proposed measures. 14. Placing the Product on the Market. If, after consultation with the Regulatory Committee (and where necessary with the Council), the Commission decides to place the biotech agricultural product on the market, the Commission informs the applicant of the decision made, or the competent body of the Member State in which the approval process was initiated grants written consent for placing the product on the market. 15. Labeling. A product approved for placement on the market must also meet applicable labeling requirements. As mentioned above, proposals for labeling a product are typically required in the initial notification and accompanying dossier. At a minimum, a label is required to identify the product as containing genetically modified organisms. SUBJECT OF THE COMPLAINT BY THE ARGENTINE REPUBLIC 16. The complaint by the is based on the following considerations:

18 Page 5 1) Since October 1998, the EC has not considered or has suspended applications for approval of all biotech agricultural products under its system of approval prior to release or marketing, and in particular of products of interest to Argentina. The current suspension of procedures is demonstrated by the fact that prior to 1998, the EC had approved biotech agricultural products, while from 1998 to the present, the EC has not approved any biotech agricultural product. 2) Second, the EC has caused an undue delay by failing to consider and/or not completing the processing of applications submitted with regard to various biotech agricultural products. 3) The prohibitions adopted by some Member States on access of specific biotech agricultural products to the market. 17. In summary, these actions -suspension of consideration, lack of approval or undue delay- constitute individual expressions of a single measure which is the subject of this complaint -a de facto moratorium-. Likewise, several specific products of interest to Argentina have been affected by suspensions or the lack of consideration or undue delays -an argument that will be developed at the appropriate time- since no decision has been made on their approval to date. 18. The de facto moratorium implemented by the EC as well as the bans adopted by some of its Member States are measures inconsistent with the provisions of the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS), the General Agreement on Tariffs and Trade (GATT), or alternatively, the Agreement on Technical Barriers to Trade (TBT). ORDER OF ANALYSIS 19. Argentina will begin by establishing the inconsistency of the EC s de facto moratorium with the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS). In other words, Argentina will demonstrate the substantive inconsistency of the EC s measure affecting the approval of all biotech agricultural products since 1998 with the SPS. Specifically, it will

19 Page 6 show that the de facto moratorium is inconsistent with the following provisions: - Articles 5.1, 2.2, 5.5, 2.3, 7 and Annex B:1, and 10.1 of the SPS 20. Furthermore, Argentina will demonstrate the inconsistency with the SPS of the EC s suspension of processing and failure to consider individual applications for approval of specific biotech agricultural products of particular interest to Argentina. Specifically, it will demonstrate inconsistency with the following provisions: - Articles 5.1, 2.2, 5.5 and 5.6 of the SPS 21. Then, it will demonstrate the inconsistency with the SPS of the EC s undue delay in the processing of the various applications for approval of biotech agricultural products of particular interest to Argentina, and specifically its inconsistency with the following provisions: - Article 8 and Annex C:1(a), (b), (c) and (e) of the SPS 22. Upon demonstrating the inconsistency with the SPS, Argentina will demonstrate the inconsistency of the suspension of processing and failure to consider individual applications for approval of specific biotech agricultural products of particular interest to Argentina with the GATT Specifically, it will demonstrate inconsistency with the following provision: - Article III:4 of the GATT Alternatively, Argentina will demonstrate the inconsistency of the application of Community legislation with respect to the system of approval of biotech agricultural products of particular interest to Argentina with the following provisions of the Agreement on Technical Barriers to Trade (TBT): - Articles 2.1, 2.2, 5.1.1, 5.1.2, 5.2.1, and 12 of the TBT, and 24. Finally, Argentina will demonstrate the inconsistency of the bans by

20 Page 7 some EC Member States with the following provisions: - Articles 5.1, 2.2, 5.5, 2.3, and 5.6 of the SPS - Articles III:4 of the GATT Alternatively, and should the Panel not consider the Member State bans under the SPS Agreement, with Articles 2.1, 2.2, 2.9.1, and of the TBT Agreement ARGUMENTS I.- INTRODUCTION 25. Since 1998 the EC has not approved any new biotech agricultural product, notwithstanding the validity of the above-referenced Community legislation -Directive 2001/18/EC and its predecessor, Directive 90/220/EEC, and Regulation (CE) No. 258/97- and since then the applications for approval for various products of interest to Argentina have been pending, either in procedures initiated under Regulation 258/97 or under any of the above-mentioned EC Directives This repeated and systematic failure to approve new biotech agricultural products is what both the claimants and the EC have designated as a de facto moratorium, the existence of which the EC itself has admitted 9. 8 See list of biotech agricultural products approved by the EC in State of play on GMO authorisations under EU law, MEMO/04/17, Brussels, January 28, 2004, Annexes 1 and 4, in Annex ARG-6. 9 By way of example, the see Communication from the Commission, Journal of the European Communities C 55 dated , COM(2002) 27 and Bulletin 1/2-2002, Point , which states in its pertinent section: (...) With regard to the food supply, the Parliament fully shares the opinion that an end must be called to the current de facto moratorium that has been imposed on genetically modified foods since 1998, which should be lifted in 2003, to provide greater choice and increased benefits to the consumer as well as to promote innovation. (...) See Annex ARG-7. In addition, David Byrne, the European Commissioner for Health and Consumer Protection, said at the

21 Page The attitude of the EC by failing to approve any biotech agricultural products since under Directive 2001/18/EC and its predecessor Directive 90/220/EEC and Regulation (EC) 258/97- is incompatible with WTO legislation. 28. In October 2002, Directive 2001/18/EC took effect, establishing that all the applications for which the approval process had not yet been completed - conference entitled New Technologies in Agriculture - Biotechnology, Annex Summary details of draft Regulations on GM Food/Feed and Traceability - European Commissioner David Byrne, dated September 18, 2001:... In the EU, the Scientific Committees have already assessed a number of GMOs and concluded that they do not pose a danger to the environment or to human health. However, these GMOs are still pending final approval and some of them have now been awaiting approval for quite some time. (...) See Annex ARG-8. Likewise, the European Commissioner for Health and Consumer Protection said at the conference entitled A European approach to food safety and GMOs, on October 9, 2001: See Annex ARG The final point I wish to make on biotechnology relates to the effective moratorium on new approvals in the EU. This is an unfortunate situation and has helped nobody in my view. It is my firm hope and intention that we can get the approvals process working again. I have mandated my officials to start a dialogue with the Member States of the European Union with a view to re-starting approvals... David Byrne expressed the same idea at the conference entitled Farm to Fork - Risk versus benefit, on November 22, 2001:... The effective moratorium on new approvals in the EU is an unfortunate situation and its continuation, in my personal view, helps nobody. It has serious implications for European industry, agriculture and research. It creates legal uncertainty... (...) As a result, the authorisation of both pending and new products has come to a grinding halt... In this regard, see ARG-10.

22 Page 9 in other words, all applications submitted since under Directive 90/220/EEC would have to begin the process all over again under the new Directive This obligation to begin the process all over again led some of the applicants to withdraw their applications Even among those applicants who decided to restart the procedure under Directive 2001/18/EC, none of them have received approval for their biotech agricultural products. On the contrary, the approval processes were further delayed after the EC began to indicate that before any approval would be granted, it would be necessary to finalize the approval at the level of the EC of a new directive on the traceability and labeling of biotech agricultural products Directive 2001/18/EC stipulates in its Article 35: Pending notifications 1. Notifications concerning placing on the market of GMOs as or in products received pursuant to Directive 90/220/EEC, and in respect of which the procedures of that Directive have not been completed by 17 October 2002 shall be subject to the provisions of this Directive. (...) 11 See point C.1.c) of this presentation. Status of the biotech products of particular interest to Argentina: Inconsistencies in the application of Community legislation in light of the provisions of Article 8 and Annex C:1(a), (b), (c) and (e) of the SPS. 12 See Report by Antonios Trakatellis before the European Parliament, June 4, 2003, A5-0204, Recommendation for second reading on the common position of the Council with a view to adopting a European Parliament and Council regulation on traceability and labeling of genetically modified organisms and the traceability of food and feed products produced from genetically modified organisms and amending Directive 2001/18/EC, in its pertinent section, Page 22 (in the Spanish version): In addition, I take the view that ( ) will lead to the removal of the de facto moratorium on the approval of new GMOs, (...) See Annex ARG-11. See also the statement by David Byrne at the conference entitled Farm to Fork - Risk versus benefit, on November 22, 2001: (...) The fact is that a number of EU Member States have since 1999 demanded a more stringent and transparent regulatory framework for marketing authorisations and a labelling and traceability regime for GMOs and GMO-derived products.

23 Page All these measures implemented by the EC (change in legislation, obligation to restart the processes, the unjustified failure to process applications, the pretext of the need to implement legislation on an aspect other than approval, etc.), the result of which is the lack of any approvals and the impossibility of importing any new biotech agricultural product into the EC since are evidence of a de facto moratorium. 32. Likewise, Argentina notes that biotech agricultural products have suffered an arbitrary and unjustified discrimination with regard to the application of Community legislation. In fact, Regulation (EC) 258/97 is applicable both to new biotech agricultural products and to new nonbiotech products, among others. Nevertheless, only the biotech agricultural products have been subjected to this discrimination. Their position is that pending the adoption of such rules, and in accordance with preventive and precautionary principles, new authorisations for growing and marketing GM products should remain suspended. (...) See Annex ARG-10. See also the Declaration by the Danish, Greek, French, Italian and Luxembourg delegations concerning the suspension of new GMO authorisations, 2194 th Council Meeting -Environment-, Luxembourg, June 24/25, 1999: The Governments of the following Member States (Denmark, Greece, France, Italy and Luxembourg), in exercising the powers vested in them regarding the growing and placing on the market of genetically modified organisms (GMOs), given the need to put in place a tighter, more transparent framework, in particular for risk assessment, having regard to the specifics of European ecosystems, monitoring and labelling, given the need to restore public and market confidence, point to the importance of the Commission submitting without delay full draft rules ensuring labelling and traceability of GMOs and GMO-derived products and state that, pending the adoption of such rules, in accordance with preventive and precautionary principles, they will take steps to have any new authorisations for growing and placing on the market suspended. See Annex ARG See, for example, Annexes ARG-7, ARG-10 and ARG-12.