Berkeley Law

Within the next twelve to twenty-four months, the World Trade Organization (WTO) may have to rule on a dispute between the United States and the European Communities (EC) regarding genetically modified organisms (GMO). This Article explains why the organization’s current jurisprudence risks making this case and others like it an unnecessarily explosive and damaging one for the trading system.

Existing WTO cases interpreting health and safety rules instruct panels and the Appellate Body to determine if there is a "rational relationship" between a challenged measure and the "risk assessment" that must be conducted before a measure is adopted. In making a ruling, therefore, panelists must evaluate scientific evidence, attempt to gage the defendant's willingness to tolerate risk, and assess the relationship between risk and the challenged measure.

This Article argues that substantive review of this kind is unwise and unnecessarily threatens the stability of the international trading system. The WTO is poorly placed to evaluate either science or the risk preferences of states. In addition, when the WTO finds a violation of WTO obligations, the relatively weak enforcement mechanisms of the organization will often be insufficient to overcome the political salience of health and safety measures or the sovereignty implications of an international review of these domestic policies. The sanctions that accompany non-compliance generate additional barriers to trade and impose additional costs on the system. A refusal to comply is further harmful because it undermines the legitimacy of the WTO and generates conflict among the litigants.

Similar costs may arise in any trade dispute, but they are especially likely in the context of the Sanitary and Phytosanitary Agreement (SPS), under which the WTO handles health and safety issues. This Article explains why the WTO should defer to domestic decisions on these issues rather than subject them to a substantive review. It also explains why procedural provisions in the SPS Agreement, along with non-discrimination and least restrictive alternative obligations, can effectively discipline states and discourage protectionist abuses.