A common market not withstanding, the 28-member European Union (EU) faces the difficult task of harmonising its regulations across many important areas, thereby creating a market-access issue for trade partners on many occasions.
The latest such divergence that has been agreed upon by the environment ministers of member states of the EU is the case of genetically modified organisms (GMOs). The ministers have agreed to broad-base the criteria allowing member states to impose a ban on GMOs in their respective countries for a large number of reasons, ranging from socio-economic concerns, land use and town planning and agricultural policy objectives.
The recent agreement by the EU environment ministers to adopt a legislative proposal would allow member states to restrict or prohibit the cultivation of GMOs in their territory even if the crop has been authorised by Brussels. Twenty six of the 28 member states have reportedly agreed to these measures.
Till date, member states of EU can invoke the so-called "safeguard clause" only for some specific reasons. According to the existing clause, member states may provisionally restrict or prohibit the use and/or sale of the GM product on its territory. However, the member state must have justifiable reasons to consider that the GMO in question poses a risk to human health or the environment. Six member states of the EU currently apply safeguard clauses on GMOs: Austria, France, Greece, Hungary, Germany and Luxembourg.
GMOs have for long been a matter of debate within the EU, with some countries completely opposed to the entry of these products. Since this has been a politically sensitive issue, the European Commission has till date approved only a few GM crops - cotton, maize, rapeseed, sugar beet and soya bean among others - for use in the EU. The US and Brazil are the largest growers of GM crops in the world.
The national safeguard ban, which is used in the EU, has been a matter of debate within the World Trade Organisation (WTO) for long. The WTO Agreement on Sanitary and Phytosanitary measures allows countries to protect their citizens from consuming food or related items if there is scientific evidence to prove that the particular product is harmful for residents of a particular country. However, without scientific evidence, countries are not allowed to ban products.
News reports suggest that the existing safeguard ban imposed by the EU had been questioned at the WTO by three countries - Argentina, Canada and the US. However, the EU reached an out-of-court settlement with all these countries after it was pointed out that these national bans are not entirely backed by scientific evidence.
Opposition on the issue of GMOs is not unique to the EU. Even countries such as India are not in favour of a completely open environment towards GM crops. However, what is important to note is the lack of harmonisation across the EU in some key areas of interest to trade partners, which takes away the benefit of tapping a common market.
Analysts are of the view that this issue will come to the fore during the discussions for a transatlantic treaty between the US and the EU because Washington may not support a ban on GM products since it could hurt exports of its agricultural produce to the EU market.
While this issue will be politically sensitive within the EU countries, Brussels will have to take a close look at issues where harmonisation of standards, regulations and so on differs between member states. This will be important given that when bilateral trade agreements are signed, such regulations could lead to the creation of non-tariff measures for other partners.