Public International Trade Law - Essay Example

Public International Trade Law Introduction Genetically Modified (GM) foods, including corn, soybean, cotton seed oil andcanola, were first traded and marketed globally during the 1990s. Since their entry into the market, it has been debated as to whether their sale and use should be allowed or restricted. Many of the grounds used against the trade and the consumption of GM foods include that they present health risks and also a wide array of economic and ecological concerns. Some of the grounds used to justify and support the consumption of GM foods include that they are better at adapting to harsh weather and climatic conditions, pest resistance and the fact that they could be more nutritious.1 These arguments made in favour of the production of GM foods reflect the absolute advantage of different countries, where the emphasis of the Adam Smith model is that the trade between countries is based on absolute advantage.2 For example, many of the countries in support of the beneficial nature of producing and selling GM foods include those producing them in large scale.3 Many scientists and professionals have expressed the concerns that these foods and the products made from them are likely to have unintended and unforeseen environmental effects on the eco-balance that sustains life on earth, by affecting other species and causing diseases.4 This paper will explore the implications of instituting a ban on GM food products by a WTO member country, due to the provisions of GATT.5 The WTO The WTO is an agency built on four fundamental principles, including national treatment, most advantaged nation, fair competition and market access. The member states of WTO are required to observe and respect the principles, commitments, agreements that are endorsed and ratified by the agency.6 According to the directives of the agency, any violation of the regulations endorsed by the WTO, the oversight dispute resolution panel may authorize the complainant members to enforce retaliatory trade barriers in the form of sanctions against the member in violation.7 These retaliatory sanctions trigger great impacts, in the cases that they are enforced by members with strong economic influence, for example the EU and US.8 However, in the case that the suing partner is one of a low economic potential, the effectiveness of the retaliatory measures is low, and is likely not to be felt by the member in violation.9 The main aim of the WTO (World Trade Organization) is helping the trade taking place between the member countries to flow as freely as possible,10 provided that there are no undesirable side-effects – due to the adverse effects they can trigger, in the area of wellbeing and economic development.11 This aim is pursued through the removal of obstacles, towards ensuring that governments, companies and individuals accept the protection of trade rules globally.12 The trade rules out into place are aimed at giving the members, the confidence that sudden changes are not likely to affect them and their trade relations, mainly due to their predictability and transparency.13 The prohibition of the importation of GM food products under GATT provisions Until the current time, the WTO has remained responsible for the oversight of 60 global agreements, including GATT 1947, which is regarded the cornerstone of the world’s multilateral system of trade. GATT (General Agreement on Tariffs and Trade) communicates trade requirements succinctly, and requires member states to adhere, throughout their engagement in competitive trade.14 Article I requires the partnering countries to consider one another favoured nations, and that means that member states should not discriminate against one another. Article III restricts the protection of locally produced products by the member states, where the protectionist regulations are aimed at harming similar products from the import markets of other states. On the other hand, article XI restricts the imposition of the restrictions put in the way of imports and exports. The three articles are aimed at limiting the capacity of member states, with regards to the imposition of discriminatory regulations and measures.15 In relation to the provisions of the article, particularly Article 5.7, the company seeking to restrict the sale and the importation of GM food products can support the ban using the argument that the available scientific evidence is limited.16 Maintaining this position would allow it to set provisional measures in relation to the ban. However, the adoption of that position would compel the company to look for more information, which can be collected using objective risk assessment, so as to review the ban within a given span of time.17 The articles related to the protection of trade and the trade relations between members states emphasize the fact that countries are not allowed and not in a position to limit the importation of GM foods, just like other products, according to the GATT provisions contained in Articles I, III and XI. Based on the provisions of the three articles explored previously, it is clear that no country, which is a member state of WTO is allowed to show favouritism for one member or another, and that means that in the setting and the establishment of the ban on GM food products, it is not allowed to restrict those of one country and not another. Secondly, according to article III of GATT, the provisions emphasize the fact that the country seeking to impose the ban on GM food products cannot enforce it, with the aim of limiting the entry of imports, with the underlying aim of protecting the food products produced locally.18 Thirdly, according to article XI, the provisions by GATT emphasize the fact that the country seeking to restrict the sale and the importation of GM food products is not allowed to limit the trade of imports or exports, unless there are good grounds in favour of banning it. However, despite the limiting effects of the articles mentioned above, article XX offers “general exceptions” offers allowances related to the adoption of restrictions related to environmental and health safety. This article on exceptions can be applied to the case of GM Foods and food products containing GM ingredients, because researchers among other agencies have raised questions regarding their potential to affect the health of consumers. The “general exceptions measures’ applying to this case include number (b) which covers the necessity of protecting plant, animal and human life and health and also number (g) regarding the conservation of the natural resources that are likely to be exhausted.19 The effects of enforcing the protective power of these two exceptions include checking the effects felt by humans – arising from the sale and the consumption of GM food products, with the intent of improving health, among other benefits.20 The World Trade Organization (WTO) has not formulated any specific agreements related to the protection of the environment and the ecosystems within it. However, the agreements formulated by the organization endorse the rights of governments to safeguard and conserve the environment, as long as the set conditions are met.21 These conditions include the conditions and the provisions related to the channels for resolving and addressing environmental concerns. The attention and the emphasis offered to the environment are somehow new in the 60 year long history of the trading system. The coverage of environmental concerns started in 1994, during the conclusion of the Uruguay Round, after the trade ministers in attendance resolved to start a comprehensive coverage program on the protection of environment and trade within the WTO. The decision led to the creation of the TEC (Trade and Environmental Committee), and it has been responsible for the oversight of all the issues related to sustainable development and environmental conservation into the coverage area of the work of the organization. Further revisions to reflect emergent issues related to environmental protection and health include the provisions formulated during the Doha conference for participating ministers in 2001. The exclusions related to the health and the sanitary standards of the products imported and sold in the given country are explored under the Sanitary and Physchosanitary (SPS) measures agreement, which came into force during the time when the WTO was established.22 The agreement is related to the standards related to the health of plants and animals and the safety of the food products imported and sold within the given country.23 Based on the provisions of article XX, which covers the SPS agreement, countries are allowed the capacity to set the standards for the products that can be imported and sold in the country. However, there is the emphasis that the setting of the self-standards should be based on scientific evidence, and should only be applied and enforced to the extent that they serve the role of protecting animal, human and plant health and life. In the current case of the country attempting to impose trade restrictions to the sale of GMO food products, it is important to note that the setting of the regulations should conform to the agreement’s provisions. The most important of the provisions is that the trade restrictions should conform to – include that the regulations should be grounded on the information drawn from the scientific assessment of the risks. Further, the article will require that the imposition of the regulations be of a nature which is not unjustifiably discriminatory to some countries or arbitrary in nature. More importantly, the regulations should promote the enforcement and the observance of similar conditions among the trading countries. Scenario and the conditions surrounding the imposition of a ban on GM food products According to scenario (a), where a member state of the World Trade Organization (WTO) seeks to endorse a prohibition over the importation or the sale of the food products containing GM food ingredients, the implications are explored. The basis of the prohibition is that GM foods have not been tested and proven not to cause or trigger the development of the wide array of health dangers.24 These health dangers have been cited through some scientific studies and organizational working papers, but it is important to note that these implications have not been explored scientifically to conclusion. Due to the lack of universally acceptable evidence to support the ban and the opposition channelled against the sale and the importation of GM food products, the usage of the exceptions of trade under GATT article XX are still questioned and a matter of debate.25 Following the institution of a prohibition against the sale and the importation of the food products made or containing GM food ingredients – due to the fact that the claims that GM foods have not been tested conclusively, as likely to cause health problems – it will be a matter of balance for the involved interests. Based on the provisions of Articles I, III and XX, it is implied that the given country will be acting in violation of GATT 1947. Further, GATT 1947 article XX, on general exceptions, explores the scenario, guiding the actions of the given country, and giving the grounds that can be used to ban the sale of products, without raising issues.26 The article emphasizes the fact that it is necessary that the grounds for the banning of products, due to health and environmental concerns, should not be those applied in an unjustifiable and arbitrary manner, which could imply that the prohibition is discriminatory to some countries and not others. The implications of these provisions include that the grounds used to ban the sale and the importation of GM food products from member countries should be based on unquestionable and scientifically proven information. The implications of the provision include that the prohibition of GM food products is almost impossible, unless the given country will give the scientifically supported information justifying the ban of the products. Further, taking into account that there has been little or no research done to verify the debated issue that GMO trigger or cause health risks, it is likely that the given country will be blamed for the initiation of a ban on the basis of arbitrary and unjustifiable information.27 Further, it is possible that the WTO will subject the ban on GM food products to scrutiny, to verify that it is not discriminatory in nature.28 The emphasis of such a scrutiny would be the protection of the trade interests of other WTO member states covered by the ban. The final conclusion made should be that, the ban should work in a manner which is similar among all the affected member states. However, in a case that it is found that the same conditions prevail for all member states, it is most likely that the given country will be considered as acting in violation of GATT 1947, and that will be enough grounds for the oversight committee to reject the ban. Further, in the case that the information underlying the questionable restrictions of GM food products is not found transparent and as having a similar effect among all member states, it may be viewed that the given country is seeking to enforce a disguised restriction on international trade.29 The areas to be observed in this case, include those covered by the most favoured nation (MFN) principle and the National treatment extension of the principle. The emphasis of these provisions is that a ban should not advantage some products, particularly domestic at the expense of imported ones. The implications of this position will be that the given country is acting in violation of the provisions of GATT, and that will be a violation against the countries targeted by the GM foods ban. The effects of such a situation include that the countries targeted by the discriminatory ban can sue the country seeking to enforce the ban. The effects of such a situation include that WTO’s DRP (dispute resolution panel) can authorize the suing countries, which had been the targets of the discriminatory ban, to endorse retaliatory trade sanctions, against the country that violated the provisions of GATT.30 The implications and the effects of the endorsement of retaliatory sanctions will depend on the economic influence of the country putting them into place, due to the fact that more powerful members like the EU and the US will influence, many other members and influence the trade relations of many products or product lines.31 One such case was the ban imposed by France, against the importation and the consumption of asbestos and the products containing it. After the imposition of the ban, Canada, which was the main producer of the banned product, challenged the ban by attempting to prove that France had banned them because asbestos was a substitute to locally-produced products, including glass fibres, PVA and cellulose.32 The position maintained by France was that the ban was aimed at limiting the entry of the imported substitutes for the locally produced products.33 In a similar, in the case that the retaliatory trade sanctions are set by a less powerful member of the WTO, the effects and the implications of the sanctions will be felt to a lesser extent, because the restrictions will be less far reaching. Also, the affiliate member states that may support the position taken by the suing country are also likely to be low. In the case that the hazardous nature of the products can be verified, the ban on the importation and the sale of the foods that have not been tested can be endorsed and put into effect.34 The implications of the standards checked before a GMF ban is endorsed include that, the hazardous nature of the untested GM food products is not the main consideration, but the fact that the hazards can be verified scientifically.35 Otherwise, the interests safeguarded by the trade liberalization provisions of WTO will take precedence over the health concerns expressed about the GM food products in question. The overall position taken by the WTO in this case will be that GATT 1947 does not stop the sale and the importation of GM food products from being traded in the country seeking to establish the ban. The position is justifiable, based on the fact that the country to establish the ban on GM food products will be acting in violation of GATT 1947. However, the country can rely on the SPS agreement as the basis of the ban, where a scientific risk assessment will be needed before the ban can be enforced.36 However, the implication of this position is that, for the ban to take effect and to be accepted, the scientific risk assessment must show that the GM food products in question is hazardous to the health of consumers.37 Further, the principles aimed at protecting the trade of member states should be observed during the abolishment or the institution of the GM food ban. The Most favoured nation (MFN) principle maintains that the endorsement of any ban, it should open up or restrict the market, for similar goods that are traded by all the trade partners of the given country. The MFN principle emphasizes the fact that all member states should be treated and regarded as equals, during the formulation and enforcement of trade policies, including quotas, tariffs and NTB’s. The principle does not apply to only imported products, but also domestic products, where the position is that the ban on the GM food products cannot be one that favours the trade of domestic products, at the disadvantage of imported products. National treatment is an extension of the MFN principle, covering the discrimination that can be directed towards goods among other classes of the products and the services that are exchanged. The extension directs that, irrespective of the fact that taxation may not be imposed on domestic products; imported ones can be levied for custom duty before they enter the domestic market.38 The main emphasis of the extension is that domestic and imported goods should be treated in a similar manner, after their entry into the local market. The implication of this principle and the MFN principle, in general is that the ban instituted by the given country should not be aimed at disadvantaging the imported goods, to the advantage of locally produced food products.39 Conclusion GM food products have been in use since the 1990s. The sale and the use of GM foods and food products has remained an issue of debate, because many studies emphasize that they present a wide array of health and environmental effects. The WTO is built on the fundamentals of protecting the trade interests of its member states, and its mandate can be applied to the case of the country seeking to ban the sale and the importation of GM food products. Under the provisions of GATT 1947, the country seeking to ban the sale and the importation of GM food products is not allowed to do so, but it can rely on the exceptions contained in article XX to build the grounds for the ban. Care should be exercised during the process of enforcing the ban on GM food products, because the inappropriate establishment of the ban can make other member states to sue it and to set retaliatory trade policies against it. In conclusion, the country will be violating GATT 1947 and the commitments of WTO by introducing the prohibition. For that reason, in order to avoid retaliatory policies, it should base the ban on the scientific assessment of the evidence that the GM food products present health risks. Bibliography Arup C, ‘The State of Play of Dispute Settlement “Law” at the World Trade Organization’ (2003) 37 Journal of World Trade, 897. Associated Press, Australia is to open its markets to imports of pork, bananas and Apples (Associated Press Newswires 2004). 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