International Trade Concerns Effects of International Regulatory Harmonisation

International Trade Concerns Effects of International Regulatory Harmonisation and International Agreements (For Trade) Pradeep S Mehta Secretary General CUTS International Jaipur, India Email: psm@cuts. org August 2006 Slide No.

FACTS • All international agreements for trade are relevant, but their objectives differ. • Different objectives lead to constant conflicts among divergent approaches. • Clashes over international agreements have economic implications. • Developing countries face numerous challenges with the highest economic implications. • A well-balanced and harmonised international regulatory mechanism needs to be created. Slide No.

INTERNATIONAL REGULATIONS Following international rule-making bodies govern the Biosafety and Biotechnology regulation: • WTO: It sets the regulations, which govern global trade in all products. • Cartagena Biodiversity Protocol: It was negotiated in 2000 to cover transboundary movements of GM and LM products; • Codex Alimentarius Commission in Rome: It is responsible for providing technical judgments on food safety issues. Slide No.

CONFLICTING REGULATIONS • • WTO Agreements i. e. GATT, SPS & TBT aim to ensure that measures affecting trade are no more restrictive than necessary. Biosafety Protocol and the Codex Alimentarius intend to regulate the international transfer of LMOs thus focusing primarily on environmental and human health risks. OUTCOME: Uncertainty occurs as to how environmental and health measures can be harmonised with relevant WTO Agreements. Slide No.

FURTHER COMPLICATIONS Uncertainty aggravates when two different groups of countries favour different approaches. • US, Canada and Argentina have adopted the principle of ‘sound science evidence’ and prefer the WTO Agreements. • EU, Japan and South Korea have adopted the ‘precautionary principle’ thus restricting trade. They favour CBD to justify their stringent national regulations. Slide No.

US-EU BIOTECH TRADE DISPUTE • This dispute became a test case on how the WTO will deal with decision-making based on the precautionary principle. • Ruling in favour of US, Argentina and Canada against EU. • Ruling could not help clear the dust nor affect the EU's current biotech regulatory framework. Slide No.

CHALLENGES FACED BY DEVELOPING COUNTRIES • Fear related to exports of agricultural commodities to EU and other countries. • • Preserving the export opportunities, they need to be “GM-free” countries. If they opt not to grow any GM crops, then the farmers are at a loss. • Their capacity to implement, monitor and enforce bio-safety laws remains weak. • India recently went through a very tough time in terms of governance of biotechnology. • The bio-safety guidelines require a comprehensive and dynamic policy mechanism , not just a tool for regulation. Slide No.

CHALLENGES FACED BY DEVELOPING COUNTRIES • Africa still lacks a comprehensive regulatory system against agricultural biotechnology vis-à-vis the international negotiations at the WTO. • Most countries do not have the necessary infrastructure to comply with the regulations. • Need to balance their rights and obligations under the Biosafety Protocol with their commitments under the WTO. Slide No.

TOWARDS INTERNATIONAL REGULATORY HARMONISATION • Can take assistance from FAO, IAEA, UNEP and WHO to work together for developing a model regulatory framework. • Slide No. The Codex Alimentarius Commission and Consultative Group on International Agriculture Research (CGIAR) centres can be involved.

NEED FOR COOPERATION BETWEEN US AND EU For International regulatory harmonisation, US and EU can cooperate either by: • Mutual recognition of regulatory systems, • Explicit regulatory harmonisation, or • Informal mutual regulatory adjustment. Slide No.

CONCLUSION Given the entrenched differences between the US and the EU, and also between the WTO and the Biodiversity Protocol, a formal or informal mutual regulatory adjustment short of formal harmonisation is the most promising. Slide No.

Thank You ! **** Slide No.