Thoughts on economics and liberty

The history of regulation of GMOs

Extract from Robert Falkner’s “The Global Biotech Food Fight: Why the United States Got It So Wrong”, The Brown Journal of World Affairs, Vol. 14, No. 1 (FALL / WINTER 2007), pp. 99-110.

Let me note at the outset that I comprehensively disagree with the thesis of the writer of this article. I’m only noting a few historical notes here.


Only 30 years ago, the first safety debate on genetic engineering suggested a different and less contentious path for international biotechnology regulation. When scientists first considered the safety of GMO experiments at the Asimolar Conference in 1975, they agreed on a set of safety standards to voluntarily apply in their research. At that time, a broad consensus existed among governments in the industrialized world that self-regulation by the scientific community was working. Even when GMO ex-periments moved from the laboratory to field trials in the 1980s, most governments continued to apply a “light touch” approach to regulation.

The U.S. government was one of the first to create a comprehensive system of regulation, in the form of the 1986 “Co-ordinated Framework for the Regulation of Biotechnology,” which divided regulatory authority between the Environmental Protection Agency (EPA), the Food and Drug Administration (FDA), and the U.S. Department of Agriculture. Then and today, the U.S. regulatory system has been based on the belief that the use of genetic engineering does not require a separate regulatory approach, and that biotech products should be assessed according to their specific characteristics, just like any other novel plant or food product. This so-called principle of substantial equivalence has provided a major boost to the biotech sector in the United States, allowing it to commercially introduce GMOs with varying levels of safety testing and weak post-approval oversight.

Most European countries seemed to be following the same route in the mid-1980s. At that time, they were keen to reverse a trend that saw Europe’s fledgling biotechnology industry falling behind leading U.S. firms. But by 1990, the European Union changed course by adopting a pro-environmental system of GMO regulation that was based on Denmark’s progressive biosafety law. The European Commission’s newly created environment directorate-general, tasked to create a harmonized regulatory framework, successfully used the rationale of creating a single European market to push for com¬prehensive regulations. Unlike anti-biotech campaigners, the biotech industry was slow to organize itself at the European level and was weakly involved in the drafting of the new regulations. During the 1980s, the business lobby was held back by a tradition of organizing around products instead of industrial processes and by a fragmentation of the biotechnology sector into small and medium-sized firms.” The new EU regulations created a technology-based system of risk regulation that subjected all biotech products to a comprehensive risk assessment procedure. Decisions on the regulatory approval of new GMOs were informed by the precautionary principle, which meant that they could be prohibited if they were suspected of being harmful—even though this could not be scientifically proven. Given the novelty of biotech products and the potentially serious and long-term damage that they could cause, Europeans decided to err on the side of caution.

Initially, the regulatory differences between the United States and the European Union seemed to play into the hands of U.S. biotech firms. The more permissive regulatory environment in the United States helped Monsanto, DuPont, and Dow Chemicals to cement their global leadership position. In contrast, the European biotech sector struggled to overcome its fragmented industry structure, found it harder to raise capital for new and risky investment, and was constrained by a stricter regulatory environment. But as soon as U.S. farmers began to adopt the first line of GM crops, Europe’s more restrictive stance on biosafety came to cast a shadow over the global expansion of GM products—including in the United States.

The first shipments of GM crops to Europe provoked a fierce anti-biotech campaign in the late 1990s and led to the complete closure of the European market for most of the United States’ corn and soybean exports by late 1998. The European Union’s approval system for GMO imports ground to a halt as more European governments bowed to public pressure and forced a moratorium on new GM products. Because of the high adoption rate of GM varieties in U.S. agriculture and the absence of appropriate infrastructure for segregating GM from non-GM crops, the U.S. farm sector lost an estimated $300 million in annual exports to Europe.

After losing a protracted WTO trade dispute brought by the United States, the European Union lifted its moratorium in 2004, but new GMO labeling and traceability requirements and hostile consumer reactions have kept GM food imports at bay.

To make matters worse for U.S. farmers, GMO market restrictions quickly spread from Europe to other countries. Partly inspired by the European Union’s hardline stance on GMO risks, a growing number of Asian, African, and Latin American countries have created their own biosafety regulations and imposed restrictive import and labeling requirements.

In particular, those countries with an interest in preserving access to non-GM agricultural markets in Europe have resisted the growth of GM crop varieties. Trade-related market opposition has emerged against the introduction of GM rice in India and GM soybeans in China, among others. The economic repercussions of global biotech food restrictions have even shaped market decisions in the United States, the heartland of the agricultural biotech revolution. In 2004, Monsanto announced that it had shelved plans to introduce GM wheat varieties, after consultations with U.S. and Canadian wheat farming organizations had failed to overcome resistance by export-dependent farmers.

The position of countries wishing to subject GMO imports to risk assessment was further strengthened in 2003 when the Cartagena Protocol on Biosafety entered into force. Agreed upon at a UN conference in January 2000, the treaty obliges exporters to provide information on internationally traded GMOs and to seek the prior approval of importing countries before such trade can take place. In the case of agricultural commodities containing GMOs, exporters Societies differ with regard to their are obliged to indicate that shipments “may contain” GMOs and to provide risk adversity and how they value information about authorized GM varieties on a central Internet portal.

The treaty contains some far-reaching provisions allowing importing nations to apply precautionary reasons in restricting imports—one of the reasons that the United States objected to the treaty from the beginning. Even though the United States did not sign the accord—it first would have had to become a party to the CBD, the protocol’s mother convention—U.S. agricultural exporters are still likely to be obliged to comply with its main provisions, as most of the world’s agricultural import nations have ratified the agreement.

All these developments have strengthened the prerogative of importing nations to choose their own biosafety strategy, and in many parts of the world they have served to slow down the global spread of GM crops. U.S. officials’ reactions to the rise of precautionary biosafety policies have oscillated between incomprehension and bewilderment, and to some extent, frustration with their inability to convince the world of the blessings of genetic engineering. Why did it come to this, and why did the United States misjudge the situation?

Both the Clinton and Bush administrations repeatedly challenged precautionary biosafety regulations at national and international levels. The United States opposed the creation of the international regime on GMO trade in the 1990s, challenged the European Union’s GMO moratorium at the WTO in 2003, and put pressure on many developing countries to accept U.S. GM food imports. Yet despite these efforts, the Cartagena Protocol on Biosafety came into force in 2003, and numerous countries introduced biosafety rules that have restricted international trade in GM crops and food products. Global production of biotech crops may be on the rise and has gradually spread to more countries, but the much-touted biotechnology revolution has come up against entrenched consumer hostility and new regulatory restrictions.

The Cartagena Protocol, the world’s first and only multilateral treaty to deal with GMO trade, has gone some way towards coordinating national policies, but by establishing a devolved system of precautionary risk regulation, it has acknowledged the inherent limits to regulatory harmonization in this policy area.

Sanjeev Sabhlok

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