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Biotechnology and Trade Laws
by Ashish Rana

Cite as : (2004) PL WebJour 1

Biotechnology: Risks and benefits involved

Biotechnology is a revolutionary technology. It has opened up myriad avenues for the human regime to grow and alter its future. It allows the humans to temper the genetic structure of any organism and thereby making it more compatible and beneficial to human use. To be precise, biotechnology means any technological application that uses biological systems, living organisms, or derivatives thereof, to make or modify products or processes for specific use1.

The use of biotechnology in sectors such as agriculture and medicine has produced a growing number of genetically modified organisms and products from them. Altering of organisms to procure a better product may provide benefit to society including bumper crops, super drugs etc. However, these alterations and boons do not come cheap and have their own set of risks involved. Its potential effects on biodiversity, humans, animals and environment, as a whole has become a point of moot globally. The draft policies of countries around the world vary and largely depend on factors like cost-benefit analysis and their capability of risk assessment of genetically modified organisms. At present, there is a sharp contrast between the widespread international acceptance of biotechnology’s benefits and the common concern about its possible dangers to ecology.

Currently, the much-talked about benefits of genetically modified crops are better weed and insect control, higher yields and more flexible crop management. The farmers and the small agribusiness are the best beneficiaries as they can obtain higher yields with much less investment on seeds and pesticides. In a larger perspective, it provides a greater opportunity for better food security and sustainable growth, especially for the developing and third world countries. Increasing the amount of food produced per hectare could be a very potent and legitimate way to feed the world’s growing population, without exerting pressure on other natural resources and without diverting land from other necessary purposes such as forest conservation2.

Some of the transgenic crops that are already being introduced into the markets world over are the BT crops that are protected against insect damage and reduce pesticides use3; herbicide-tolerant crops that allow farmers to apply a particular herbicide to control the weeds without harming the crop; disease-resistant crops that are armed against destructive viral plant diseases with a plant equivalent of a vaccine; delayed-ripening fruits and vegetables, nutritionally enhanced foods and high performance cooking oils are some other miracles of biotechnology4.

However, there are a number of risks associated with biotechnology. One of the greatest doubts created by biotechnology is the protection and preservation of biodiversity, which seems to be under threat. The genetically altered plants may transfer the genetic material and other associated traits to nearby planted conventional varieties of plants, weeds and other crops, thereby threatening the ecosystem and biodiversity. Some of the ill effects of the GM crops have started to be seen in many countries. BT crops are believed to be producing a special toxin, which kills the pests attacking the crop. Various reports have yielded that in every insect and pest communities there are few individuals who have natural resistance towards it and within a period of time all other insects die except the few. These natural-resistant pests reproduce and grow in number with inherent features of resisting BT toxin. It is these insects and pests, which attack and harm the conventional crops and thereby abridge the total yield from a particular farm. Monarch butterfly case is another example of irreparable damage to biodiversity5.

Terminator technology, another invention of biotechnology, involves controlled germination process, wherein one seed can give crops once and the seeds from that crop cannot be used again i.e. farmers need to buy new seeds every season. Terminator technology is mainly developed to help transnational firms increase their monopoly over seed production and recoup their investment in R&D. With biotechnology giving a new tool in the hands of scientists to come over with the species boundary and engineer a human gene into a pig to develop organs for transplant or engineering/implanting the Alzheimer’s gene into mice for research has raised certain ethical and religious concerns all over the world6. The patenting of life forms and the possibility of human cloning has added fuel to the fire. A large number of patents have been issued in the sector. If the results of plant research continue to be patented, there is a risk that they may become too expensive for poor farmers, especially in developing countries.

Trade laws

As GMOs represent a new generation of crops and plants and biotechnology being relatively a new technology there are inadequate number of legislations nationally as well as internationally to govern technology transfer and trade among GMOs. Some of the existing trade laws internationally are:

The Cartegena Protocol on Biosafety

The Cartagena Protocol on Biosafety was adopted in Montreal, Canada on June 29, 2000, and was negotiated under the United Nations Convention on Biological Diversity (Rio de Janerio, 1992)7. The Protocol is one of its kinds; a legally binding instrument governing transfer of living modified organisms from one nation to another. Living modified organisms are defined as “any living organism that possess a novel combination of genetic material to be obtained through the use of modern biotechnology”8.

The Protocol is an outcome of long and complex negotiations among various groups that emerged. The two main groups that mooted over the Protocol are that of Like-Minded Group and Miami Group9. Like-Minded Group consisted largely of developing nations with weak background and foundations in technology. The developing countries were putting forward their apparent disability to test, assess and manage the harms that GMOs may result in. It was elucidated that due to lack of regulatory framework for biosafety and testing measures in developing countries they look forward to a well-equipped international instrument providing for information-sharing arrangement between the importing and exporting countries. Like-Minded Group therefore pressed for an arrangement wherein the exporting country has to share information on the pros and cons of LMOs with importing countries and the “precautionary principle” is given more weightage in the event of less conclusive proof of GMOs being safe for usage.

In contrast, Miami Group included the main exporters of genetically modified seeds and crops. The group pushed hard to limit the scope of the Protocol by limiting the possibility of referring to the precautionary principle, setting in hard terms under the “Advance Informed Agreement” to share information in environment.

After many rounds of discussions among the groups the final text of the Protocol i.e. a compromisory text evolved.

One of the main features of the Protocol is the system of “Advance Informed Agreement”. The AIA covers seeds for planting live fish for release, micro-organisms for bioremediation, and other LMOs, which are intentionally introduced into the environment10. It provides that the exporter, by a notification to the competent national authority of the importing country shall provide the necessary information like that of, modification introduced, the technique used and the resulting characteristics of the LMO, the regulatory status of the LMO in the country of export and the contact details of the exporter and importer. The importing country can, if required, ask for more details and has to decide in favour of or against importing. The decision should be based on available scientific evidence and risk assessment. However, the importing country may invoke the precautionary principle if deems fit.

The precautionary principle11 has evolved as a new tool in recent years. The Protocol advocates adoption of this principle wherein there is lack of conclusive scientific proof of the LMOs transferred being safe for the biodiversity of the State and consumers. In case of LMOs intended for release into the environment, the Protocol requires the documentation that identifies them as LMOs, their specific traits, and information regarding safe handling, storage and transport to be handed over to the importing country. In case, the importing country decides to stop imports, the exporter can request the importing country to review its decision on change of circumstances, which effect the risk assessment. The importing country is under an obligation under the Protocol to decide and respond to such a request within 90 days and set out the reasons behind such a decision in writing.

Dispute settlement

The preamble of the Biosafety Protocol clearly indicates that it shall not be interpreted as implying a change in the rights and obligations of a party under any existing international agreements. However, this recital is not intended to subordinate the Protocol to other international agreements. This provision clearly marks out the option to the conflicting parties in the area of biotechnology to go to the WTO Dispute Settlement Board. In the event, any country feels that her trade interests are better protected under the WTO rules other than the Protocol can go to the WTO Dispute Settlement Board.

WTO Agreements having implications on international trade in GMOs

Agreements having allusion to trade in GMOs are Agreement on the Applications of Sanitary and Phytosanitary Measures (SPS), the Agreement on Technical Barriers to Trade (TBT) and the General Agreement on Tariffs & Trade, 1994 (GATT).

The SPS Agreement provides for prevention of international trade from protectionist policies that may be employed by the State. The Agreement covers measures adopted by countries to protect human or animal life from food-borne risks; human health from plant-carried diseases and animals and plants from pests and diseases12 Due to lack of scientific certainty about the effects and uses of GMOs the measures regarding GMOs fell into the ambit of SPS. Furthermore, the transfer of associated trails to conventional varieties and food-borne risks to human health necessitates the inclusion of GMOrelated measure into SPS.

Article 2.2 of SPS provides that members shall ensure that SPS measures shall be applied to the extent it is necessary to protect human, plant or animal life. Article 5.7 says that SPS measures can be taken as precautionary measure in absence of scientific evidence. The procedure and decisions used during risk assessment shall be made available to other countries on request.

Under the Technical Barriers to Trade Agreement (TBT) regulations may be imposed for the prevention of deceptive practices, protection of human, plant health or the environment etc. But the measures adopted should pass the proportionality test i.e. the regulations should not be trade-restrictive (internationally). It is still to be decided that whether an import ban applying to GMOs or GM products could be regarded as technical regulations falling under the TBT Agreement.

The concept of “like product” holds the key to this question. In other words, if GMOs or GM products are same as conventional varieties, then any special treatment like that of labelling GMOs or GM products does not arise. The two existing views on this is one of the GMO-exporting countries who put forward the test of “substantial equivalence” which looks into the outward characteristics i.e. if GMO or GM product resembles the conventional variety then any importing ban on GMOs will be in contravention to WTO objectives and TBT. On the other hand, it has been proposed that since genetically engineered group contains a different set of DNA combination which their conventional counterpart do not possess, they are physically different and hence any labelling requirement is well under the required framework of TBT. The issue of labelling of GMOs and GM crop remains to be decided by the WTO.

The issue of “like products” is made more complex by Article III of GATT, which provides for non-discrimination between domestic and imposed goods.

Article XX of GATT provides a breather to the importing countries wherein it empowers the importing countries to make laws which are necessary to protect human, animal or plant life and for the conservation of exhaustible resources if such measures are made effective in conjunction with restriction on domestic production or consumption subject to requirement of non-discrimination and arbitrariness.


Developing countries have always been at the receiving end in matters related to trade in genetic-modified organisms. On one hand, the developing countries support Article XX, TBT and SPS Agreements in order to protect themselves from still unknown fears and effects of GMO on human, plant or animal health and ecology. With the lack of proper technical know-how with respect to risk assessment and domestic legislations guiding trade in GMO Article XX, TBT and SPS Agreements provide breathing space to developing countries. On the other hand, developing countries exporting GMOs or GM products advocate more flexibility in rules as TBT and SPS Agreements may give developed countries an opportunity to deny their products into their country. With multinational corporations having already invested heavily in biotechnology, there is an increased pressure on their respective Governments to remove the trade barriers across the nations for free movement of GMOs and GM products across the borders. In such vague times, it has become all the more important for developing countries to enact domestic legislation governing trade laws in biotech products in order to secure food safety and human, plant and animal health.

Fourth year, Amity Law School, New Delhi Return to Text

1. Article 2, “Convention on Biological Diversity”. Return to Text

2. See Zarrilli Simonetta, “Industrial Trade in Genetically Modified Organisms and Multilateral Negotiations”, UNCTAD/DITC/TNCD/1, July 2000. Return to Text

3. BT crops contain a special gene taken from a bacterium called bacillus thuringiensis which is genetically engineered into the conventional plant variety Return to Text

4. See Biotechnology Industry Organisation, “Transgenic Products on the Market”, Guide to Biotechnology, (website: http://bio.org/food&ag/transgenic_products/html) Return to Text

5. In the instant case, the pollen of BT crops when fell on the adjacent crops/fenugreek plants, which are food to monarch butterflies, resulted in the death of butterflies on a large scale. Return to Text

6. See Biotechnology, Novartis, (website: http://www.novartis.com) Return to Text

7. See Aarti Gupta, Governing Trade in Genetically Modified Organisms — The Cartagena Protocol on Biosafety. Return to Text

8. Article 3(g), Cartagena Protocol on Biosafety. Return to Text

9. See “WTO in the New Millennium”. Return to Text

10. According to Article 7.2 of the Protocol, LMOs for intentional introduction into the environment are all LMOs other than those intended for direct use as food or feed, or for processing. Return to Text

11. The formulation of the precautionary principle contained in principle 15 of the Rio Declaration of 1992 is the following: “where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation”. Return to Text

12. See WTO, “Understanding the WTO Agreement on Sanitary and Phytosanitary (SPS) Measures”, May 1998. Return to Text

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