Workshop participants considered that in particular the following two issues should be addressed with a view to mitigating the risks of LLP.
First, participants saw the need to reconsider zero tolerance thresholds, possibly replacing them with low-level marketing thresholds; these new thresholds need to be higher than the technical detection limit to be practical, to reduce the negative impact on costs and to prevent trade disruptions.
Second, participants highlighted the need to address the "destination risk", e.g. by official testing of shipments already at the port of loading. Other solutions proposed were the streamlining of the regulatory systems, mutual recognition of risk assessments of new GM crops and the flexible implementation of Codex Alimentarius guidelines.
The global pipeline of new GM crops (pdf file)
Implications of asynchronous approval for international trade
Alexander J. Stein and Emilio Rodríguez-Cerezo
JRC EU report. EUR 23486 EN - 2009
Executive summary
The commercialisation of new genetically modified (GM) crops generally is a regulated activity worldwide. Different countries have different authorisation procedures, and, even if submitted at the same time, new GM crops do not get approval simultaneously in all countries.
This issue, known as "asynchronous approval" of GM crops, is of growing concern for its potential economic impact on international trade. Because if the importing country operates a "zero tolerance" policy, imports may be rejected if containing traces of genetically modified organisms (GMOs) that are not yet authorised.
A problem similar to asynchronous approval (AA) occurs when a developer of a new GM crop does not seek approval for commercialisation in all world regions. (This may be the case if the crop in question is designed only for local markets or foreign markets do not represent major target markets for exports.) In this case there can be "isolated foreign approval" (IFA) by a cultivating country and any traces of unauthorised GM material in imports may again lead to their rejection by other countries.
Finally, imports can also be rejected due to "low-level presence" (LLP) of research events; this can happen if a country has authorised the cultivation of a GM crop in field trials only, but due to accidental admixture traces end up in the commercial crop supply.
In the case of the European Union (EU), any such low-level presence of new GM crops in agricultural imports has already caused trade disruption and economic problems. In particular, as acknowledged in a report by the Directorate-General for Agriculture and Rural Development of the European Commission (EC 2007), the EU feed and livestock production sectors are affected by this issue.
In order to predict the evolution of the impact of LLP of GM crops for the EU agri-food sector, it is essential to produce a forecast of the upcoming GM crops. It needs to be clarified which and how many GM crops will be developed in the next years, in which countries, and when these new crops will be authorised by the different trading partners of the EU.
To build the basis for such a forecast, the Joint Research Centre (JRC), Institute for Prospective Technological Studies (IPTS), organised a workshop on the "Global commercial pipeline of new GM crops" on 12-13 November 2008 that gathered international experts and practitioners involved in the development, regulation and commercialisation of GM crops worldwide.
This report presents an overview of the current status of approvals of GMOs in different countries with relevance for EU trade. It also presents a database of GM crops that are already in the pipeline and may be marketed worldwide in the short term (2-3 years) to medium term (7-8 years from 2008). The pipeline was compiled for the seven crops (soybeans, maize, rapeseed, cotton, sugar beet, potatoes and rice) for which GM varieties already exist or are likely to be marketed in the near future. The pipeline includes GM crops to be marketed by private and public technology providers in all world regions.
GM crops were classified in five categories according to their proximity to market:
Commercial crop: commercialised GM events (those currently marketed in at least one country worldwide).
Commercial pipeline: GM events authorised for marketing in at least one country but not yet commercialised (commercialisation only depends on the developer).
Regulatory pipeline: GM events already in the regulatory process to be marketed in at least one country.
Advanced R&D pipeline: GM events not yet in the regulatory process but at late stages of development.
Other crops: GM events authorised in at least one country, but not commercialised or commercialised once but phased out commercially or legally afterwards.
The summary of the findings of the workshop and subsequent desk research predicts a significant global increase in the number of individual commercial GM events. While currently there are around 30 commercial GM events that are cultivated worldwide, the forecast is that by 2015 there will be over 120: for soybeans, currently only 1 GM event is available, but this number is predicted to increase to 17 different events; maize events are expected to increase from 9 to 24, rapeseed events from 4 to 8 and cotton events from 12 to 27. In the case of rice where currently no commercial events are cultivated, the prediction is that by 2015 as many as 15 GM events could be grown; potatoes also are predicted to move from no current cultivation to 8 events, and other, minor crops are predicted to grow from 7 events currently marketed to 23 events by 2015. Therefore, as problems of LLP have already occurred in the current situation (with about 30 events marketed), these are only likely to increase when moving from 30 to 120 events in the market.
Individual GM events can easily be combined by conventional crossings by plant breeders to generate new GMOs with multiple desirable traits. Such "stacking" of (authorised) events is already common in maize and cotton. It is evident that in countries where stacked GM crops are required to go through the regulatory system as a new GM crop, the possibility of generating new GM crops by stacking individual events will create an increasingly large number of new "approvable" GMOs. This will cause significant increase in the workload of regulatory systems and will likely contribute to the asynchrony of approvals.
Most of the existing events in commercial GM crops were developed by (private) technology providers from the USA or Europe, and cultivated first in North and South America. These developers also tended to seek broad authorisation of their products in key export target markets (in particular the EU and Japan). However, by 2015 about half the events in commercial GM crops are expected to come from national technology providers in Asia (and Latin America), designed for domestic agricultural markets. It seems very improbable that all these new GM crops will be submitted for approval in the EU, i.e. there will be isolated foreign approval (IFA). Hence future incidents due to LLP in imports of crops or processed foods from these countries are very likely. An added complication in such cases is the need for information on validated tests for the detection of some of these events in order to enforce current regulatory provisions in many countries worldwide.
In addition to new GM crops like rice and potatoes, it is also foreseen that a limited number of new traits will be commercialised. Currently the large majority of commercial traits confer insect resistance, herbicide tolerance or a combination of both. For minor crops virus resistance is already available. The pipeline predicts that by 2015 insect resistance and herbicide tolerance traits will still be dominant but also new commercial traits will be available covering crop composition and abiotic stress tolerance (mainly optimised oil and starch content, improved nutrient profiles, and drought tolerance).
Given the EU's dependency on soybean imports, special attention should be paid to this crop. Currently there are five new soybean events in the commercial and regulatory pipeline that could result in potential situations of AA already in the next 2-3 years. In the longer term further AA incidents could arise from nine new events that are currently in the advanced R&D pipeline. In addition, difficulties with LLP due to IFA cannot be discarded because of the GM soybeans that are currently in the regulatory system in China.
For maize there are four new individual events in the pipeline that could pose potential AA problems in the short term, with more difficulties being likely due to the stacking of events. In the longer term, seven more events could enter the market and contribute to the AA situation. Moreover, three GM maize events that could become potential issues of IFA are in the regulatory pipeline in China.
For GM rapeseed there is only one event in the regulatory pipeline that may pose difficulties due to LLP in the short term; in the longer run the problem of LLP in rapeseed in the EU will depend on the evolution of the five events in the advanced R&D pipeline. Also for GM cotton the LLP issue may be less relevant because the EU imports of cottonseed meal and cotton oil are very small. However, the EU depends on the import of cotton seeds for domestic cultivation. It is also worth noticing that out of the 12 individual GM events of cotton cultivated in the world, as many as eight events are not currently cleared for import into the EU and only one of these has been submitted for EU approval. This situation is not likely to change and therefore LLP incidents, in particular due to IFA, cannot be ruled out.
None of the five GM rice events in the commercial and regulatory pipelines worldwide are authorised in the EU and four of them are not even submitted for approval. Hence potential problems of LLP in rice imports may occur, especially due to IFA once the events that are currently in the advanced R&D pipelines in various Asian countries reach the market.
Three events of GM potatoes are already in the regulatory pipeline worldwide; one event is being assessed exclusively in the EU, while the other two events in GM potatoes are being assessed in Argentina. Imports of potatoes into the EU have traditionally been very small and highly regulated for plant health reasons; therefore LLP issues with potatoes are unlikely, at least in the short to medium term. Regarding "other commercial GM crops", only GM sugar beet is authorised in the EU for import and all the other events of other GM crops are not even submitted for EU approval. Hence in these cases future LLP issues, if any, may be due to IFA and occur in particular in processed food products.
For professionals in the global food and feed chain the economic risk of rejections of shipments at the EU border is the major problem in the context of LLP. Part of this problem, the "destination risk", arises if the tests for the detection of unauthorised GM material in imports are only carried out at the port of destination – when a cancellation of the shipment is impossible and when its re-direction is costly. And while identity preservation of crops is possible in principle, given the bulk handling of grains in international trade, commodity traders also question the possibility to comply with a zero tolerance policy for LLP of unauthorised material. A possible consequence mentioned is that exporters could sell their grain to "preferred buyers", i.e. to countries that have found concerns about LLP not justified and to importers that are known to create little problems. Moreover, the price of grain is determined through demand and supply in "bid and offer" systems of grain exchanges where prices are based on quality and quantity, with a strong relationship between price, specifications and risk. As risk is increased if there is uncertainty whether imported grains will be in compliance with LLP regulations, prices are likely to rise (unless the risk cannot be measured or managed, in which case there will be no trade at all). In this context more general issues are the lack of predictability and legal certainty. Apart from problems for commodity traders, future price increases and supply bottlenecks in the EU due to LLP also carry the risk of relocations of EU businesses that are dependent on cheap imports of agricultural commodities, like livestock farming.
Workshop participants considered that in particular the following two issues should be addressed with a view to mitigating the risks of LLP.
First, participants saw the need to reconsider zero tolerance thresholds, possibly replacing them with low-level marketing thresholds; these new thresholds need to be higher than the technical detection limit to be practical, to reduce the negative impact on costs and to prevent trade disruptions.
Second, participants highlighted the need to address the "destination risk", e.g. by official testing of shipments already at the port of loading. Other solutions proposed were the streamlining of the regulatory systems, mutual recognition of risk assessments of new GM crops and the flexible implementation of Codex Alimentarius guidelines.
Labels: Co-existence, Commodity trade, Economics, EU
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