The Regulation
of Genetically Modified Foods
By Judson O. Berkey
October 1999
I. Introduction
The latest trade battle between the U.S.
and the EU concerns genetically modified
food (GMF), specifically plants and foods
made from plants which have been genetically
modified by the addition of genes from unrelated
organisms. Plants used for food production
have long been genetically modified in some
manner. First through genetic evolution
and later through selective breeding, both
nature and man have altered the plants used
in the food supply so that they have favorable
growing and nutritional characteristics.
The introduction of genes from unrelated
organisms into the plants used for food
production is a more recent phenomena which
has been made possible by advances in biotechnology.
Genes may be introduced into plants for
many reasons including the following: (1)
to delay ripening to allow time to move
produce through food distribution channels,
(2) to delay rotting after ripening to prolong
retail shelf-life, (3) to add color to natural
fibers before harvesting, (4) to reduce
the need for fertilizers, (5) to confer
resistance to pests and fungi, and (6) to
facilitate the use of herbicides on harmful
weeds.
The U.S. and the EU have approached the
use of GMFs from very different perspectives.
The U.S. agricultural community has embraced
the use of GMFs while the U.S. public has
largely been silent on the issue. The American
Soybean Association estimated in 1998 that
30% of U.S. soy and 25% of U.S. maize production
consisted of genetically modified plants.
The EU on the other hand has been more resistant
to the use of GMFs largely because of public
skepticism regarding their safety. EU farmers
have yet to plant GMF crops to any large
extent and a 1998 Eurobarometer survey found
that 86% of EU consumers felt that GMFs
should at least be labeled.
The difference in sentiment between the
U.S. and the EU has led to direct conflicts
on two specific issues: (1) the approval
of GMFs by food safety regulatory bodies
and (2) the labeling of GMFs. These disputes
have led government officials to seek an
international regulatory framework which
will resolve the differences without major
disruptions in agricultural trade. Section
II below explores these developments. As
GMFs are largely produced and marketed by
international food companies, industry has
a large role to play in this issue. Section
III will highlight some of the industry
responses to these two conflicts. With as
complex an issue as GMFs, it is difficult
to comprehensively cover all the relevant
concerns. Thus, this Insight is intended
as an introductory primer to the regulatory
aspects of GMFs that may help one understand
future developments.
II. Regulatory Conflicts
A. GMF Approval
The U.S. Food and Drug Administration
(FDA) is responsible for approving the use
of GMFs in the U.S under the Food, Drug,
and Cosmetic Act of 1992 (FDCA).1
In 1992, the FDA published a working policy
statement (the "Working Policy") to explain
how foods and animal feeds derived from
plants developed by conventional and new
(i.e. genetic modification) breeding techniques
are regulated under the FDCA.2
The Working Policy is intended to provide
guidance to industry and may be revised
with changes in technology or scientific
information.
Under the Working Policy, GMFs are subject
to the same two basic FDCA requirements
as non-genetically modified foods. The first
of these, FDCA Section 402(a)(1), prohibits
food adulteration by giving the FDA the
authority to remove from the food supply
any food which "bears or contains any poisonous
or deleterious substance which may render
it injurious to health." The second basic
requirement, contained in FDCA Section 409,
requires a safety review of all food additives
that have not been granted generally recognized
as safe (GRAS) status.
The key element of the Working Policy
is that additives which already exist in
the natural food supply are recognized as
GRAS even if they are inserted into unrelated
plants by means of genetic modification
technology.3 Because most
genetic modification is done by transplanting
genes from one plant or animal already used
in the food supply to another, most GMFs
are not subject to safety approval under
the FDCA. Under this regulatory framework,
the FDA has approved the use of more than
twenty varieties of GMF seeds.
The EU approval process for GMFs has
a more political nature than the U.S. process.
The EU process is provided in Council Directive
90/220/EEC of 23 April 1990 (the "GMO Regulation").
Under Article 11 of the GMO Regulation,
a company intending to manufacture or import
a GMF must request approval from the food
safety authority of an EU member state.
The company does this by submitting a notification
to the national food safety authority containing
detailed information about the GMF. Such
information, specified in Annex II of the
GMO Regulation, is used by the member state
to conduct a case by case risk assessment
of the GMF.4
Under GMO Regulation Article 13, a member
state approving a GMF must forward all relevant
information to the EU Commission. The Commission
then notifies and distributes the information
to all the other member state national food
safety authorities. If any member state
objects to the approval of the GMF, then
a committee made up of representatives from
all the member states is formed to study
the GMF approval. Under GMF Regulation Article
21, this committee reports to the Commission
which then votes on a qualified (weighted)
majority basis on whether to approve the
GMF.
As a result of this complex approval
process, only a few GMF seeds have been
approved for use in the EU.5
Even once a GMF is approved by the
EU Commission, the EU member states still
must pass individual national laws and regulations
implementing the approval. Three member
states (France, Austria and Luxembourg)
have actually issued prohibitions against
the marketing of all GMFs. On July 7, 1999,
the EU Commission announced that it was
suing the French government for failing
to allow the sale of the genetically modified
rapeseed which the French government originally
approved. The Commission is currently attempting
to revise the GMO Regulation but does not
expect to have a revised directive before
July of 2000.6
Given the potential for further delays
in GMF approvals by the EU and the desire
of U.S. companies to have access to EU markets,
the U.S. is exploring ways to speed the
development of EU approvals of GMFs. At
the June 21, 1999 Trans-Atlantic Economic
Partnership Summit, the U.S. and the EU
announced a pilot project whereby U.S. and
EU regulatory officials will compare certain
aspects of their scientific evaluation of
GMFs. Under this project, U.S. and EU regulators
will examine documents of products already
approved to compare the standards used.
Another part of this joint project will
allow regulators' to monitor the processing
of applications which have been filed simultaneously
in both jurisdictions.7
The U.S. appears to be pursuing a carrot
and stick approach on this issue. While
cooperation among food safety regulators
is increasing, U.S. trade officials are
contemplating initiating action designed
to force the EU to take political action.
On June 24, 1999, U.S. Trade Representative
Charlene Barshefsky stated that the U.S.
is considering challenging the WTO-compatibility
of the EU GMF approval system.8
Such a challenge would likely focus on the
lack of transparency and the political nature
of the approval system. The U.S. would probably
seek WTO approval of retaliation against
the EU similar to that authorized in the
banana and beef-hormone disputes in an attempt
to force the EU to hasten the development
of a new system.
B. Labeling
The second regulatory dispute between
the U.S. and the EU concerns the labeling
of products containing GMFs. Under FDCA
Section 403(i), a producer must describe
a food product by its common or usual name
and reveal all facts that are material in
light of the labeling. In the Working Policy,
the FDA stated that FDCA Section 403(i)
means that "consumers must be informed,
by appropriate labeling, if a food derived
from a new plant variety differs from its
traditional counterpart such that the common
or usual name no longer applies to the new
food, or if a safety or usage issue exists
to which consumers must be alerted." However,
given its belief that genetic modification
techniques "are extensions at the molecular
level of traditional methods and will be
used to achieve the same goals as pursued
with traditional plant breeding" the FDA
does not believe that the mere fact that
a plant is produced by genetic modification
must be revealed on labels.9
The EU, on the other hand, introduced
on 26 May 1998 Council Regulation 1139/98/EC
which required that products "produced,
in whole or in part" from approved genetically
modified soybeans and maize must be labeled
with the phrase "produced from genetically
modified [soya/maize]." According to the
regulation's preamble, although the Commission
should give consideration "to the question
of whether a de minimis threshold for the
presence of DNA or protein resulting from
genetic modification can be set," until
such time as that occurs foods produced
from genetically modified soya beans or
maize, no matter what the level of genetically
modified plant, "are not equivalent and
should therefore be subject to labeling
requirements." Thus, whereas the U.S. requires
little if any labeling of GMFs, the EU will
seemingly require mandatory labeling of
all GMFs.
As other countries have introduced labeling
requirements for products containing GMFs
similar to the EU requirement, this labeling
dispute is not merely bilateral in nature.
According to the WTO Committee on Technical
Barriers to Trade, which must be notified
of labeling measures when they are introduced
by WTO members, there have been eleven GMO-related
labeling measures adopted in WTO member
countries. These notifications have come
from the EU, Switzerland, Norway, Australia,
New Zealand, Canada, and South Korea.10
In addition, the Japanese Ministry
of Agriculture, Forestry, and Fisheries
announced in September 1999 that certain
GMFs must be labeled beginning in April
2001. This may be of significance because
Japan already imports twenty-two (22) varieties
of GMFs and has approved three (3) domestically
produced GMFs for use in Japan. Thus, the
labeling measure in Japan is designed for
consumer awareness rather than protectionist
purposes.
The U.S. has proposed that the labeling
issue be resolved in the Codex Alimentarius
(the "Codex"). The Codex is a joint commission
of the World Health Organization and Food
and Agriculture Organization that was established
in 1962 to develop international food safety
and trade rules. The Codex standards have
legal standing under the WTO Agreement on
Sanitary and Phytosanitary Measures as a
basis on which WTO members may impose restrictions
on food imports for health and safety reasons.
In April of 1999, the Codex Committee on
Food Labeling met in Ottawa, Canada to discuss
the labeling issue. At this meeting, the
U.S. offered to accept voluntary labeling
while the EU pushed for mandatory labeling.11
The Codex Committee on Food Labeling
met June 28-July 3, 1999 in to discuss GMF
labeling. At this meeting, the U.S. stated
that there was no scientific basis to require
systematic labeling of products containing
GMFs and that any effort to do so would
be contrary to the general principles of
the Codex, would mislead consumers, and
could not be enforced. Germany, speaking
on behalf of the EU, reiterated the EU call
for mandatory labeling of all products containing
GMFs which were not equivalent to traditional
foods. No agreement was reached at this
meeting.
At the Rome Meeting, the Codex did create
a Task Force on Biotechnology to "develop
standards, guidelines, or recommendations,
as appropriate, for foods derived from biotechnology
or traits introduced into foods by biotechnology,
on the basis of scientific evidence, risk
analysis, and having regard, where appropriate,
to other legitimate factors relevant to
the health of consumers and the promotion
of fair trade practices."12
This task force is to focus solely on the
safety and nutritional aspects of GMFs and
is not to consider labeling issues. The
task force has a four year lifespan and
is due to report to the Codex Executive
Committee in 2003. Thus, the Codex may provide
a forum for dealing with GMF approval as
well as labeling issues.
III. Industry Responses
Industry may play a vital role in the
resolution of GMF issues. Some firms, such
as Archer Daniels Midland, have begun to
create a market niche for non-GMFs by agreeing
to pay farmers a premium for growing unmodified
crops.13 Likewise, some
farmers in Brazil specifically decided not
to buy Monsanto's Roundup Ready modified
soybean seeds after their initial introduction
and prior to their recent ban in hopes of
satisfying the EU demand for non-GMF crops.14
This may indicate the development of a two-tier
market structure with one commodity price
for GMFs and another for non-GMFs.
Food producers and distributors
may take the lead on labeling issues. When
it appeared that the EU might not pass a
mandatory GMF labeling regulation in early
1998, Unilever announced that it would label
all food products containing GMFs.15
Nestle's corporate policies state that it
will only use GMFs when approved within
the framework of relevant legislation AND
when accepted by the general public.16
Furthermore, a coalition of sixteen biotechnology,
food, and commodity companies17
announced a commitment to "identify preservation"
which would rigorously separate and label
every trace of GMF in the food manufacturing
process. Thus, the food companies may preempt
regulatory responses.18
Interest groups also are lining
up to play a large role in the GMF debate.
The September 1999 issue of Consumer Reports
magazine contains a "shopping list" of products
which had been determined to contain GMFs
by the U.S.-based group Consumers Union.
Consumer Reports calls for increased safety
measures for GMFs, mandatory labeling, and
legal liability on the agriculture industry
for any economic or biological damage resulting
from the use of GMFs. Furthermore, the U.S.-based
Foundation for Economic Trends and the National
Family Farm Coalition have initiated the
largest ever antitrust lawsuit claiming
that the companies engaged in marketing
GMF seeds have engaged in anti-competitive
practices by patenting sterile GMF seeds
and requiring farmers to lease seeds on
a yearly basis. Thus, the courts may ultimately
play a role in the development of the market
for GMFs.19
Finally, development issues may
influence the future development of GMF
policies. The Nuffield Council on Bioethics
stated in their 1999 report that "concentrating
exclusively on the safety and environmental
impact of (GMF) crops in the UK and Europe
may distract both the public and governments
from giving the proper attention to benefits
they could bring to developing and developed
countries." Rockefeller Foundation President
Gordon Conway, in a 1999 speech to the Monsanto
board of directors, called for an increased
dialog on the benefits of GMFs such as the
Rockefeller supported rice with added beta-carotene
which is designed to combat vitamin-A deficiency
in children in developing countries.20
Thus, development concerns may influence
the market position of GMFs.
IV. Conclusion
In the end, there is a need for a reasoned
and rational consideration of the benefits
of GMFs and also of the rights of consumers
to know what is in their food supply. A
five-day conference in Vienna, Austria sponsored
by the U.N. Ad Hoc Working Group on Biosafety
was the beginning of such an effort. The
goal of this conference, which concluded
on September 19, 1999, was to produce a
draft international agreement for the trade,
handling, and transportation of GMFs. Although
no draft was produced, largely due to differences
between the G-77 group of developing nations
and the so-called Miami Group (i.e., the
U.S., Canada, Argentina, Uruguay, Australia,
and Chile) over disease resistant and higher
yielding GMF commodities, this was a positive
first step toward resolving GMF issues.
The parties at the Vienna conference
agreed to discuss GMF issues again at their
final negotiation on the proposed Biosafety
Protocol to the Convention on Biological
Diversity scheduled for January of 2000
in Montreal, Canada. The U.N. involvement
in GMF issues is useful in that it may remove
the discussions from the confrontational
trade arena. Thus, there appears to be hope
that a broad dialogue will occur that prevents
the controversy surrounding GMF from erupting
into another trade war.
Endnotes:
1. 21 U.S.C. §301
et seq.
2. U.S. FDA, Statement
of Policy: Foods Derived from New Plant Varieties,
57 Federal Register 22984-23005 (May 29, 1992).
3. The Working Policy
specifically addresses three types of genetic
modification. First, the transfer of genetic
material in the form of nucleic acids is not
subject to FDCA Section 409 because "nucleic
acids are present in the cells of every living
organism, including every plant and animal."
Second, the addition of proteins and substances
produced by the action of protein enzymes (e.g.
carbohydrates and fats) which are "already present
at generally comparable or greater levels in
currently consumed foods" does not require food
additive safety scrutiny. Finally, the
creation of a "protein, carbohydrate, fat or
oil, or other substance that differs significantly
in structure, function, or composition from
substances currently found in food" as a result
of genetic modification (e.g. a novel protein
sweetener) does require food additive safety
scrutiny. 57 F.R. 22984 (May 29, 1992).
4. The criteria used
for approving a GMF are contained in Council
directive 258/97/EC of 27 January 1997.
Under Article 3(1) of this directive, all (a)
foods containing genetically modified organisms
within the meaning of the GMO Regulation, (b)
foods produced from, but not containing, genetically
modified organisms, (c) foods with a new or
intentionally modified primary molecular structure,
(d) foods consisting of micro-organisms, fungi,
or algae, (e) foods consisting of, or isolated
from, plants or animals except for foods obtained
by traditional breeding practices, and (f) foods
to which a production process not currently
used has been applied which results in significant
changes in nutritional value, metabolism, or
level of undesirable substances of the food,
must not (1) present a danger for the consumer,
(2) mislead the consumer, and (3) differ from
foods which they are intended to replace to
such an extent that their normal consumption
would be nutritionally disadvantageous for the
consumer.
5. The EU has approved
six GMFs: maize, soybeans, rice, cotton, rapeseed,
and beets. Only two of these, soybeans
with increased tolerance to the herbicide glyphosate
(approved in Commission Decision 96/281/EC of
3 April 1996) and maize with insecticidal properties
conferred by the Bt-endoxin gene and increased
tolerance to the herbicide glufosinate ammonium
(approved in Commission Decision 97/98/EC of
23 January 1997), are actually on the market
as of July 1999.
6. BNA, 16 International
Trade Reporter 1163 (7/14/99).
7. White House Fact
Sheet on Trans-Atlantic Economic Partnership
(June 21, 1999).
8. BNA, 16 International
Trade Reporter 1089 (6/30/99).
9. 57 F.R. 22984.
10. BNA, 16 International Trade
Reporter 1040 (6/23/99).
11. Food Labeling News, No. 35,
Vol. 7, p. 1064 (June 9, 1999).
12. Report of the Twenty-Third Session
of the Codex Alimentarius Commission, p. 53
(ALINORM 99/37).
13. Dow Jones Business News online
story DJON9912717202 (5/7/99).
14. "Brazil Farms Become Biotech
Battleground" Reuters (July 1999).
15. Unilever Press Release Announcing
European GMO Labeling, http://www.unilever.com/public/news/release/Show.asp?articleid=243
(21 January 1998).
16. Nestle's Position on Gene Technology,
http://www.nestle.com/html/a2e.html (June 1999).
17. AgrEvo, DuPont, Monsanto, Novartis,
Pioneer, Rhone-Poulenc, Coca-Cola, Danone, Kraft
Jacobs Suchard, Nestle, PepsiCo, Procter &
Gamble, Unilever, American Soybean Association,
Cargill, and Groupe Limagrain.
18. "EU Seeks to Calm Consumer Worries
on Genetically Modified Food" Reuters (July
1999).
19. "Life Sciences Groups Face Lawsuits"
Financial Times, p. 1 (13 September 1999)
20. "The Seeds of Warning for Biotech
Companies" USA Today, LIFE, 10D ( 29 June 1999).
About the Author:
Judson O. Berkey is a regulatory policy analyst
at the Institute of International Finance and
can be reached at jberkey@iif.com.
He graduated from the University of Virginia
(B.A. Mathematics, Economics) in 1995 and from
Harvard Law School (J.D., cum laude) in 1998.
This Insight was based on a policy brief prepared
for the Oldways Institute in Cambridge, MA (www.oldwayspt.org).
All views expressed in this article are those
of the author alone.
Further Reading:
Those wishing to following GMF developments
further are encouraged to consult the following
resources.
U.N. developments can be followed on the
Convention of Biological Diversity website
at: http://www.biodiv.org/
Background material related to the labeling
issue can be found in the September 27, 1999
daily briefing provided by the policy news
and information service Policy.com at
http://www.policy.com
Finally, two general sources of information
about legal developments related to GMFs are
the Bureau of National Affairs International
Trade Reporter and Food Safety Reporter.
_________________________________________________________________________________
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The Society itself takes no position on these
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ASIL Insights may be found on the ASIL
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Educational copying is permitted with due
acknowledgement.
