POTENTIAL IMPACT ON CANADIAN EXPORTS
IN NOVEMBER 2014, the European parliament went through a six-month review process of the current biotechnology trait approval process within the European Union (EU). The review was suggested by trading partners who were seeing long delays in the current system. On average, it takes 69 months for one trait to receive approval.
Following the review, the European parliament came up with a proposal that would give individual EU governments the right to ban imports of genetically modified (GM) feed. Even if approved by the European Commission, the opt-out proposal would allow individual member states to ban the sale of new GM traits for non-scientific reasons. While the proposal has not yet been finalized, the move has been highly criticized by both Canadian stakeholders and members of the European Parliament.
Nicole Mackellar, manager of market development at Grain Farmers of Ontario, says the grain industry has a number of concerns about the new proposal. “When Canada negotiated the Comprehensive Economic and Trade Agreement (CETA), we were negotiating with one single market,” she says. “This proposal is essentially indicating that this is not the case as each individual member state would have the opportunity to ban the sale of the commodity. In return, Canadian exporters will now have to work with each individual country.”
In 2014 alone, Canada exported nearly 1.3 million metric tonnes of soybeans to the EU, making it the single largest market for Canadian soybeans. Of that, a significant proportion (over 65 per cent) were commodity soybeans going into the feed market. Over one-third of Ontario’s soybean exports went to the EU.
If the proposal goes through, member states won’t simply be able to ban imports arbitrarily. Member states will have to justify that the opt-out measure is compatible with EU law and consistent with the EU’s international obligations.
Gord Pugh, Grain Farmers of Ontario’s federal government liaison, is concerned about this point exactly. “We don’t know at this point what a satisfactory ‘justification’ might be,” he says. “The proposal is modeled on the recent EU Directive 2015/412, which allows member states to opt out of cultivation of GMOs in their territory.”
Although no one knows for certain which member states will choose to opt out, Mackellar expects that France, Austria, and Germany may be among the first. “Each of these countries have previously opposed biotechnology,” she says.
Canada has been struggling with the approval process in Europe for two decades now. While 10 new traits were recently approved (and seven renewed), there are still some 40 traits awaiting approval.
Jonathan Ramsay, Monsanto’s government and industry affairs lead based in Brussels, Belgium, says it’s particularly frustrating because the existing system has not been given a fair chance. “There’s an impression that new rules are needed because the current rules are inadequate, when, in fact, every year or every couple of years the Commission has already put new aspects in place,” he says.
Ramsay adds, at this point, no one really understands how the proposal will work. What’s more, he doesn’t believe it is consistent with the Commission’s real job, which is to protect a single market.
“We just don’t see how their proposal is consistent with what they are tasked to do,” he says. “It clearly undermines a science- based risk assessment and approval process. It not only creates a bad system but it also undermines their credibility. As a European myself, I just think it’s rather disturbing that we’re moving away from science-based procedures.”
Ramsay also points out it’s difficult to see how the opt-out proposal will be enforced. “It’s hard to see how you would stop the movement of goods across borders that don’t even exist,” he says. “Again, speaking as a European, it just kind of looks like Europe isn’t always open for business. It seems to me that the European Union has given up on trying to find scientific excuses and now wants to give people the right to block it on a whim.”
There’s no doubt, though, that Europe relies heavily on Canadian imports, particularly for livestock feed. Data shows that the EU needs more than 36 million tonnes of soybeans each year to feed its livestock. However, it produces just 1.7 million tonnes, less than five per cent of its demand.
“Canada, as one of our main trade partners, will face serious trade barriers that will not be based on objective grounds if the proposal is approved and some member states decide to put in place restrictions to the use of GM food and feed,” says Pedro Narro Sanchez, public affairs and communications manager with Green Biotechnology Europe. “The ‘license to ban’ safe products in Europe will undermine the internal market, but also legal certainty of EU suppliers.”
Narro Sanchez says that trade disruptions will be costly for everyone involved — Canadian exporters as well as European consumers. EU compliance with existing trade obligations is needed to promote and develop fair bilateral trade relations with Canada, he says.
The EU food and feed chain has also been highly critical of the proposal and has called for its withdrawal. “It jeopardizes the internal market, puts the whole EU agri-food chain at risk of potentially damaging growth and jobs, and would cause serious distortions to competition, leaving measure taken by member states vulnerable to legal challenge,” says Narro Sanchez.
On July 13, 2015, the Council had its first exchange of views with commissioner Vytenis Andriukaitis, who is responsible for the health and food safety dossier. It was here that a large majority of countries mentioned the lack of impact assessment, threats the proposal posed to the single market, and the potential conflict with the World Trade Organization.
“All the countries agreed on the difficulties to implement in practical terms such a proposal,” says Narro Sanchez. “Ministers asked for an opinion from the Council’s legal service, which is expected to be delivered soon.” The implications for CETA cannot be ignored either.
“CETA was signed with the aim to enhance the existing Canada-EU trade relations,” says Narro Sanchez. “Furthermore, CETA promotes a forum for discussion on biotechnology and emphasizes the promotion of efficient science-based approval processes and cooperation on low-level presence of genetically modified crops. Canadian grain and oilseed exporters were supposed to benefit from such cooperation, which will ‘increase transparency and provide greater predictability’ for them as they seek more buyers for their products in the EU.”
Narro Sanchez says that the Commission’s main priority should be ensuring that the current legislation is properly implemented instead of trying to change the present market authorization procedure for political considerations. “The opt-out proposal should be withdrawn by the European Commission,” he says. “This demand is shared by the entire EU food and feed chain.”
The European parliament’s agriculture committee also opposes the proposal. At the beginning of September, it rejected the Commission’s draft law. A press release explaining the decision states that the committee fears that arbitrary national bans could distort competition on the EU’s single market and jeopardise the Union’s food production sectors which are heavily dependent on imports of GM feed.
The agriculture committee’s opinion will now be scrutinised by the environment committee, which has the lead on this file, and it will adopt its own position during a meeting at the beginning of October. Parliament could then scrutinise the proposal at the plenary session scheduled to be held in Strasbourg at the end of the month. l