The Regulation of Genetically Modified Foods
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.
For Codex developments, visit the Codex website at
U.N. developments can be followed on the Convention of Biological Diversity website at:
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
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.