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WORKING PAPER SERIES
Chair for Food Law
EU Regulation of New Plant Breeding
Technologies and their Possible Economic
Implications for the EU and Beyond
Justus H.H. Wesseler
Kai P. Purnhagen
31.8.2020
final version forthcoming in:
Applied Economics Perspectives and Policy
2
Chair for Food Law
WORKING PAPER 01/2020
EU Regulation of New Plant Breeding
Technologies and their Possible Economic
Implications for the EU and Beyond
Justus H.H. Wesseler
Kai P. Purnhagen
Suggested citation:
Justus Wesseler and Kai Purnhagen, EU Regulation of New Plant Breeding
Technologies and their Possible Economic Implications for the EU and
Beyond, Bayreuth Working Paper Series Food Law 01/2020, p. number.
4
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© 2020 Justus H.H. Wesseler and Kai P. Purnhagen
Contact: University of Bayreuth | Chair for Food Law / Campus Kulmbach |
Fritz-Hornschuch-Straße 13 | 95326 Kulmbach | Germany
foodlaw@uni-bayreuth.de
Chair for Food Law
Working Paper 01/2020 EU Regulation of New Plant Breeding Technologies
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Chair for Food Law
EU Regulation of New Plant Breeding
Technologies and their Possible Economic
Implications for the EU and Beyond
Justus H.H. Wesseler
Kai P. Purnhagen
Table of contents:
Abstract ................................................................................................................................................... 2
Introduction ............................................................................................................................................. 3
The Legal Situation in the European Union ............................................................................................. 4
Regulation of GMOs in the European Union ....................................................................................... 4
GMO Risk Analysis in the EU ............................................................................................................... 5
The Decision of the Court of Justice of the European Union .............................................................. 5
Application of the Precautionary Principle ......................................................................................... 6
Implications of the CJEU Judgment ......................................................................................................... 7
Implications for Plant Breeding in the European Union...................................................................... 7
Challenges for Labeling and Identity Preservation .............................................................................. 8
Implications for International Trade ................................................................................................... 9
Implications for the Environment ..................................................................................................... 10
A Way Out? ............................................................................................................................................ 11
Conclusions ............................................................................................................................................ 13
Working Paper 01/2020 Justus Wesseler and Kai Purnhagen
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Abstract
New plant breeding technologies (NPBTs), including CRISPR gene editing, are
being used widely, and they are driving the development of new crops. They are
nevertheless a subject of criticism and discussion. According to a summer 2018
interpretation by the Court of Justice of the European Union (CJEU), European
Union (EU) law makes most NPBTS subject to regulations governing the use of
genetically modified organisms (GMOs) in the EU. The implications of this decision
have been widely discussed in the literature, thereby stressing the importance of
the decision for plant breeding and international trade within and beyond the EU.
This contribution summarizes the status of the debate and highlights issues that
have thus far not been considered—particularly with regard to the implications of
EU regulations for NPBTs for countries outside the EU.
We conclude that the practical implications of the CJEU decision reduce the EU’s
comparative advantage and increase the cost of achieving the objectives of the
European Green Deal. Our findings reveal an almost complete lack of possibilities
for changing the current situation. China and countries oriented towards China are
the most likely economic beneficiaries of the current situation.
Keywords: Gene Editing, Investment, Plant Breeding, Real Options, Regulation,
European Union
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Introduction
New plant breeding technologies (NPBTs) include a range of technologies aimed at
helping plant breeders to develop crops with desired traits more precisely and
much more rapidly than would be possible with technologies based on chemical or
radiation-induced mutations. In many cases, the new technologies induce only
very precise desired point mutations, while other breeding tools (e.g., mutations
induced by chemicals or radiation) are less precise, altering much larger parts of
a plant’s genome. Although the use of NPBTs cannot eliminate off-target effects
(i.e., changes to other parts of a plant’s genome), it does make such effects less
common. In addition, the potential off-target effects of NPBTs are better
understood than are those of other plant-breeding technologies, particularly with
regard to techniques involving the application of chemical and radiation-induced
mutations. For this reason, many scientists consider NPBTs safer than many of the
alternative tools (Nationale Akademie der Wissenschaften Leopoldina, Deutsche
Forschungsgemeinschaft und Union der deutschen Akademien der Wissenschaften.
2019). Despite considerable consensus among experts in the areas of molecular
biology and plant-breeding with respect to the safety of the technologies, many
policymakers and lobby groups are less convinced. In this contribution, we apply
the language and syntax of European Union (EU) legislation—especially the
definitions stipulated therein, as well as in those documents used by the Court. In
addition, we summarize as NPBTs those discussed by Sprink et al. (2017).
The diverse views on safety and related regulatory policies have led to considerable
controversy, particularly within the EU. Experts in the areas of molecular biology
and plant breeding call for regulating plants derived from NPBTs, depending on the
method applied, in a manner similar to the regulation of plants derived from
chemical and radiation-induced mutations. In contrast, many others view almost
all plants derived from NPBTs as genetically modified organisms (GMOs), thus
claiming that they are regulated as such (Sprink et al. 2017). In the longer term,
many argue the need for revising the GMO regulations to reflect an approach based
more on products than on processes (Eriksson et al. 2019; Purnhagen et al. 2018b;
Seitz, 2018; Wanner et al. 2019).
Most scholars agree that the current legal status in the EU is that plants produced
by NPBTs fall under the regulations for GMOs. This has wide-ranging implications
for plant breeding within and beyond the EU. The implications are much broader
than has previously been discussed in the literature, which has tended to overlook
a number of links between EU-level regulations and their implications for
investments in plant breeding and trade in agricultural products.
In this contribution, we summarize the regulations that apply to GMOs in the EU,
along with the case decided by the Court of Justice of the European Union (CJEU).
Based on this summary, we discuss the implications of the regulations and their
interpretation for plant breeding within and beyond the EU, particularly with regard
to international trade. We further consider these implications in terms of
possibilities for changing the situation within the EU. As we note, however, such
possibilities are limited, and those that are available are likely to be time-
consuming.
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Overall, our analysis of the political and legal situation leads to the conclusion that
the application of NPBTs to crops intended for the European market and for
countries that produce for the European market are extremely limited. First, this
reduces the comparative advantage for the agricultural sector in the EU and the
opportunities for the United States for exporting to the EU. Second, this provides
stronger incentives for countries to adopt NPBTs that do not export substantial
volumes of agricultural and food products to the EU than otherwise.
The Legal Situation in the European Union
Regulation of GMOs in the European Union
In the broadest terms, the approval of GMOs in the EU follows a two-step risk-
analysis procedure. In this section, we summarize the basic steps. The approval
process is discussed in greater detail by Wesseler and Kalaitzandonakes (2019).
For a comparison between the approval processes of the EU and the United States,
see e.g. Smart, Blum, and Wesseler (2017).
Risk assessment is the first step in the approval process. This assessment is, as a
matter of principle, conducted by the European Food Safety Authority (EFSA). The
second step consists of the risk management, which is performed by the European
Commission (EC) and EU Member States.
In Article 2 of Directive 2001/18 on the deliberate release of GMOs into the
environment (EC, 2001, hereinafter “Directive” or “Directive 2001/18”), the EU
defines a GMO as follows: “…an organism, with the exception of human beings, in
which the genetic material has been altered in a way that does not occur naturally
by mating and/or natural recombination.” As specified in Article 3, the Directive
does not apply to techniques listed in Annex I B of the Directive. Without further
specification, these exemptions include mutagenesis, which is conventionally
understood in non-legal terms as the process of altering the genetic information
of an organism either spontaneously or deliberately (e.g., by using chemicals,
radiation, or NPBTs).
Directive 2001/18 is relevant to the approval of GMOs for deliberative release into
the environment (i.e., “cultivation”) or for placement on the market within the EU.
The Directive does not directly apply to approvals for the import and processing of
genetically modified food and feed, which are covered under Regulation 1829/2003
(EC, 2003a) on genetically modified food and feed (hereinafter “Regulation” or
“Regulation 1829/2003”). This Regulation defines genetically modified food and
feed as “containing, consisting of or produced from GMOs” (Article 2, Regulation
1829/2003), with GMOs understood as defined in Directive 2001/18. All food and
feed covered under Regulation 1829/2003 are further subject to requirements
concerning labeling and traceability. These requirements are further detailed in
Regulation 1830/2003 on the labeling and traceability of GM food and feed (EC,
2003b). Labeling exemptions apply to the adventitious or technically unavoidable
presence of traces of GMOs, as long as they do not exceed the threshold level of
0.9%, as defined under Regulation 1829/2003. This threshold applies to the
labeling of GMOs that have been authorized for import and processing. For GMOs
that have not been approved but that have received a positive risk assessment by
the EFSA, a threshold level of 0% applies for food, with a threshold of 0.1% for
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feed (EC 2011). Regulation 1830/2003 also states that GMOs require unique
identifiers prior to authorization.
GMO Risk Analysis in the EU
Applications for the approval of GMOs for cultivation and/or import and processing
must be submitted to the competent authority in one of the Member States, which
assesses the application and submits it to EFSA. The EFSA then assesses the
application and presents a recommendation to the EC, which sends a proposal,
based on the recommendation by the EFSA, to the relevant EC Standing
Committee, which includes representatives of all EU Member States. The
Committee members discuss the EC proposal and arrive at a decision by qualified
majority voting (see Box 1). If no qualified majority is reached in favor or against
the proposal, the EC may revise the proposal and resubmit it to the Committee, or
it may submit the original proposal to the Appeal Committee. The Appeal
Committee also includes representatives from all EU Member States and decides
by qualified majority voting. If it fails to reach a qualified majority in favor or
against the EC’s proposal, the EC will make the final decision (Wesseler and
Kalaitzandonakes 2019). Experience has shown that, since 2001, neither the
Standing Committee nor the Appeal Committee has ever reached a qualified
majority, and the EC has made the final decision in all cases (Smart, Blum, and
Wesseler 2015). Even if crops are approved, each EU Member State has the
possibility of opting out of approval for cultivation with effect to their territory (EC,
2015).
If a new crop does not fall under the approval process for GMOs, this does not
imply that it is “unregulated,” as claimed by some authors. For example, in cross-
border cases, the new crop would still be subject to general EU requirements (e.g.,
those applying to the free movement of goods and possibly the General Food Law),
and it would need to comply with the registration requirements of EU Member
States (Purnhagen et al, 2018b). Furthermore, such new crops are not exempt
from the various liability regimes for environmental and food safety that apply at
the level of the EU or that of its Member States (Dries et al. 2019).
The Decision of the Court of Justice of the European Union
The widely discussed regulations on NPBTs originated with a court case in France
in 2015, where the cultivation of herbicide-tolerant crops developed by non-GMO
plant-breeding techniques (e.g., oilseed, rape, and sunflowers) has increased in
the past 20 years. Nine French agriculture and environmental associations had
asked the French Prime Minister to impose a moratorium on the sale and cultivation
of herbicide-resistant oilseed rape and sunflower in France in December 2014.
They argued, if herbicide resistance had been introduced by mutagenesis, those
crops should be considered GMOs, but would be exempted according to Annex I B
of the Directive 2001/18. According to their reasoning, if directed mutagenesis had
been applied, cultivation should be stopped until approval, as the exemption
applied only to methods of mutagenesis that had been in use before 2001. The
Prime Minister did not respond to the request—under French law, this is regarded
as a rejection of the request. On March 12, 2015, therefore, the associations
submitted an application to the Conseil d’État (Council of State, France) to ask the
Prime Minister to impose the moratorium (Liberation, 2015). On October 3, 2016,
the Conseil d’État referred this case to the Court of Justice of the European Union
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(CJEU) by asking four specific questions, which can be summarized as follows (for
additional details, see e.g., Bobek, 2018; Purnhagen, 2019; Seitz, 2018): are
plants produced by using mutagenesis to be considered GMOs, and are those
produced by using directed mutagenesis exempted from Directive 2001/18, as
they would also be covered by the mutagenesis exemption in Annex I B of the
Directive?
Not surprisingly (Purnhagen et al. 2018a), the CJEU (2018) decided that plants
developed by mutagenesis are regarded as GMOs, but that plants developed by
directed mutagenesis do not fall under the mutagenesis exemption. The latter
decision came as a surprise, as the Opinion of the Advocate General (Bobek
2018)—which the CJEU follows in a majority of the cases (Purnhagen 2018b)—
had proposed a different kind of interpretation.
Many biologists and other scientists criticized the judgement, and particularly the
CJEU’s argument that only “organisms obtained by means of techniques/methods
of mutagenesis which have conventionally been used in a number of applications
and have a long safety record are excluded from the scope of that directive” (CJEU
2018, para 54). They regard plants developed by directed mutagenesis—which
often results in point mutations only —as being at least as safe as those developed
by traditional methods of mutagenesis. Furthermore, they pointed to the long
safety record of plants developed by transgenesis (e.g., Eriksson et al. 2019;
Group of Chief Scientific Advisors 2018; Nationale Akademie der Wissenschaften
Leopoldina, Deutsche Forschungsgemeinschaft und Union der deutschen
Akademien der Wissenschaften 2019).
As a result of the judgment, plants developed by methods of directed mutagenesis
are regarded as GMOs, and they must therefore be approved for cultivation. The
judgment could also be interpreted as covering the placing of food and feed on the
EU market, including import and processing (Purnhagen, 2019), thus making them
subject to requirements concerning labelling and traceability along the supply
chain (Eriksson et al. 2019).
Application of the Precautionary Principle
The precautionary principle has been an important argument for placing
techniques of directed mutagenesis under the EU regulations for GMOs. In its
decision, the CJEU states, “It follows that an interpretation of the exemption in
Article 3(1) of Directive 2001/18, read in conjunction with point 1 of Annex I B
thereto, which excludes organisms obtained by means of techniques/methods of
mutagenesis from the scope of that directive, without any distinctions, would
compromise the objective of protection pursued by the directive and would fail to
respect the precautionary principle which it seeks to implement.” As specified in
Article 4 of Directive 2001/18, “Member States shall, in accordance with the
precautionary principle, ensure that all appropriate measures are taken to avoid
adverse effects on human health and the environment which might arise from the
deliberate release or the placing on the market of GMOs. GMOs may only be
deliberately released or placed on the market in conformity with part B or part C
respectively.” In line with its case law, the CJEU based its decision on a specific
understanding of the precautionary principle that is tailored to the risks legally
associated with GMOs. This understanding reflects the wording and spirit of the
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applicable EU regulations. As such, this understanding can be understood as an
absolute interpretation of the precautionary principle.
Implications of the CJEU Judgment
If the CJEU judgment is interpreted to cover food and feed, it has direct
implications for investments in plant breeding. In general, a firm’s investments in
new technologies can be viewed as a portfolio of call options (Berk et al. 1999).
The value of a specific investment depends on the investments to be made, the
expected returns to be generated, and market risks related to the investment. The
value chain for plant breeding can be divided into four important phases: R&D,
approval, market, and ex-post liability. The R&D and approval phases generate
costs, while the market phase generates the benefits from investment. The ex-
post liability phase entails the potential costs of legal issues related to the
introduction of the product. The duration of each phase and the costs and benefits
associated with them are uncertain from an ex-ante perspective. Treating NPBTs
as GMOs substantially increases the cost of approval, as it affects both the time
required for a new product to reach the market and the costs involved in bringing
it to the market. Moreover, differences in approval requirements across
jurisdictions generate asynchronicity in market access, thereby disrupting
international trade.
The marginal effects of an increase in approval costs on the investment hurdle
have been estimated as amounting to a factor of between seven and fourteen. In
other words, one unit of additional costs requires between seven and fourteen
additional units of benefits. Similar results have been derived for the marginal
effects of changes in R&D costs (Purnhagen and Wesseler 2019). Later in this
article, the implications of the ruling are discussed in the light of the framework
discussed above by explicitly considering the legal environment.
Implications for Plant Breeding in the European Union
The results of the CJEU judgment have a direct effect on the costs of applying
techniques of directed mutagenesis within the context of plant breeding. For
illustration, to date, only three agricultural crops—two corn events and one potato
event—have received approval for cultivation in the EU. Only one of these crops is
currently being cultivated on a commercial scale. Of the other two crops, one has
not been commercialized due to poor performance, and the other has been
withdrawn due to high public resistance and regulatory problems. The two corn
events received approval prior to the change in the GMO regulation, while the
potato event received approval after more than 15 years (Wesseler and
Kalaitzandonakes 2019).
Crops developed by NPBTs for cultivation in the EU must go through the approval
process for GMOs—a long, costly, and uncertain process. Further, the opt-out
possibility mentioned above may reduce the number of farmers that can cultivate
the plant. Depending on the trait in question, this could reduce the potential
market for the crops and overall incentives to invest in the application of NPBTs
for the EU market (Nationale Akademie der Wissenschaften Leopoldina, Deutsche
Forschungsgemeinschaft und Union der deutschen Akademien der Wissenschaften
2019; Smyth and Lassoued 2019; Wesseler, Politiek, and Zilberman 2019). The
implications for plant breeders in the EU are mixed, depending on their position in
Working Paper 01/2020 Justus Wesseler and Kai Purnhagen
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the market. The CJEU judgment protects plant-breeding companies developing
products only for the European market from outside competition. At the same time,
it increases the likelihood that international plant breeders will relocate their
research from Europe to other places. Plant-breeding companies that do not
develop crops only for the EU market now have even stronger incentives to
relocate their research to other regions, like the Americas (Wesseler, Politiek, and
Zilberman 2019) or China. The risks associated with importing food and feed into
the EU are likely to be distributed along the food and feed supply chain increasing
the price. As a consequence, new innovations in plant breeding might not reach
farmers in the EU or, if they do reach the EU, it will be at a substantial delay. Seed
and feed prices are also expected to increase. Overall this will reduce the
comparative advantage of European agriculture (e.g. Gocht et al. 2020).
The CJEU decision could potentially strengthen the development of organic
agriculture in the EU, as it could potentially lead more farmers to move into that
sector after losing their comparative advantage in non-organic agriculture. The
CJEU decision also comes at a cost, as it reduces the use of NPBTs for the organic
sector. Such developments will depend on the development of the organic sector
outside the EU. The possibility that NPBTs might be allowed in organic agriculture
outside the EU (e.g., in the United States) could also cause the EU organic sector
to lose its comparative advantages. Although the overall effect is largely an
empirical question, the negative implications of such a situation for innovations in
plant breeding and related environmental and health benefits are obvious. Table 1
provides an overview of NPBT applications in plant breeding, as mentioned in the
literature, as an illustration of the expected benefits that might be foregone by an
increase in approval costs and smaller markets.
The implications of the CJEU judgment are also affecting the development of the
EU bioeconomy. Many technological developments that produce high-value
products depend on achieving improvements in biomass for processing. This is
now more difficult, given the expected increases in development costs that are
dependent on crop improvement through NPBTs. Moreover, many of the
bioreactors that process biomass use genetically modified bacteria-producing
enzymes to increase the efficiency of the conversion process (Wesseler and von
Braun, 2017). Their approval is also to be expected by the Courts ruling as further
discussed below.
Challenges for Labeling and Identity Preservation
GMOs entering the market in the EU are required to be labeled. An overview of the
labeling requirements for GMOs in the EU is provided in Table 2. Final products
that are not intended as food or feed (e.g., biofuels) are likely not to be affected
by labeling and identify preservation requirements. Nevertheless, the labeling and
identify preservation requirements induced by the CJEU decision go beyond the
traditional food and feed sector. The strategy of the bioeconomy (Wesseler and
von Braun 2017), however, is to produce products that can be used as food and
feed additives in order to increase value. Such products would require approval in
the EU, in addition to being subject to requirements concerning labeling and
tracking, particularly if they are derived from genetically modified bacteria
developed through directed mutagenesis. The following example of a transgenic
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crop to produce a biolpolymer serves to illustrate the implications of the CJEU
judgment.
The EU-funded sustainable co-production project
(https://www.cobiotech.eu/funded-projects/sustainable-co-production) aims to
extract and process cyanophycin from transgenic tobacco. The tobacco will be
grown in Argentina, as cultivation in Europe is subject to a lengthy, costly, and
uncertain approval process. Cyanophycin is an amino acid polymer that can be
used as feed additive, for the coating of medical tablets, and for the development
of food-packaging material. The current legal interpretation is that the use of
cyanophycin as a feed additive and coating for medical tablets requires labeling
for the European market. It is not yet clear whether the food-packaging material
would require labeling as well. The labeling requirements specify that products
have unique identifiers to allow the identification and tracing of the cyanophycin
(EC, 2003a).
The CJEU judgment results in similar labeling requirements on NPBTs, thereby
posing difficulties for minor alterations, which could also result from spontaneous
mutations. This increases the difficulty to differentiate and is likely to constitute a
challenge in terms of labeling, traceability, and liability for food business operators
in the supply chain. The resulting products would be similar to credence goods, for
which identity preservation (IP) is arranged through contracting along the supply
chain, combined with a monitoring system, as is common for food products labeled
as organic or GM-free (Castellari et al. 2018; Venus, Drabic, Wesseler 2018).
These processes increase costs (Bovay and Alston 2018; Kalaitzandonakes, Lusk,
and Magnier 2018), however, thus having further implications for international
trade, as discussed in greater detail below.
Implications for International Trade
The practice resulting from the CJEU decision has substantial implications for
international trade. For example, the judgment would require GMOs developed by
NPBTs and cultivated in the United States, Canada, China, Brazil, Argentina, or
other countries outside the EU to obtain approval for import into the EU (see
above). As mentioned before, the approval process would require the submission
of a unique identifier method, which is likely to be difficult to develop. One solution
might be to add a genetic marker gene or enzyme, but this would result in
additional changes in the genome. Other solutions might include using a unique
identification code that can be linked to a specific change in a plant. The potential
precision of each of these approaches is still to be tested in practice, however, as
is the question of whether it would satisfy the legal requirements for approval
(Grohmann et al. 2019).
Plant breeders outside the EU do not necessarily have to apply for approval for
import to the EU, particularly if the EU is not among the targeted export markets.
The problem is that, if a GMO has not been approved for import into the EU, it will
be subject to a threshold level of 0% for food or 0.1% for feed as discussed above.
This opens up the possibility of an import ban from countries cultivating plant
developed by NPBTs (e.g., corn or soybeans), as has happened in the past. In
practical terms, the current situation imposes an implicit ban on the import of
commodities derived from GMOs and non-GMOs from countries where GMOs
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10
developed using NPBTs have been approved and are cultivated. The
implementation of a reliable system of tracking and tracing will cause economic
difficulties along the supply chain and such systems are vulnerable to the threat
of a potential import ban (Punt and Wesseler 2016). Countries that export
significant volumes and numbers of agricultural and food commodities to the EU
may consider whether to approve the cultivation of GMOs derived through NPBT.
Liability is particularly likely to become an important issue for plant breeders active
in the United States. Under the Lanham Act, companies can be held liable if their
policies threaten export opportunities for US products. In the past, this occurred
in the case of corn, where Syngenta had received approval for the cultivation of
GM corn in the US, which had not yet obtained approval for import into China
(Redick 2019). Although China ultimately did approve the GM corn, it was at a
substantial delay. In the meantime, it rejected corn imports from the US, as a
zero-tolerance level could not be ensured. Syngenta was sued by farmers and corn
traders, and it was forced to pay several millions of dollars in compensation.
Similar situations are likely to occur with the approval of NPBT-derived GMOs that
are destined for the European market. The decision of the CJEU could thus have
important international spill-over effects, resulting in what is known as the
“Brussels effect” (Bradford 2012; Sinopoli and Purnhagen 2016).
Although the Americas might be reluctant to adopt NPBTs for crop production,
other regions might be less concerned. China is a world leader with regard to
investments in such technology (Martin-Laffon, Kuntz, and Ricroch 2019), and it
is much less dependent on agriculture and food exports to the EU. China is able to
use the technology widely, in addition to disseminating its technology to
neighboring countries, which are more tightly connected to China than they are to
the EU. Examples include African countries, whose Chinese foreign strategies in
the past decade have increased their collaboration with China (Brautigam 2015).
In the end, Africa may not be as disadvantaged as many fear, as China could
potentially fill the technology gap (Castell 2019).
Implications for the Environment
The absolute interpretation of the precautionary principle (see above), as exercised
by the CJEU in the case of GMO regulations, is questionable. It blurs the line
between the precautionary principle and the principle that preventive action should
be taken. Adverse effects can never be excluded with certainty (Bobek 2018, Van
den Belt 2003). Moreover, an absolute application of the precautionary principle
could be counter-productive, as it could delay or even prevent the use of new
technologies that can reduce harm to human health and the environment.
Herbicide-resistant crops (e.g., in combination with glyphosate) result in the
release of less-toxic active ingredients (AI) into the environment by substituting
them for more-toxic herbicides. They also support the adoption of reduced and
zero-tillage systems, and they have the potential to reduce the overall use of
herbicides in crop rotations (Wesseler, Scatasta, and Fall 2011). Almost all of
herbicide resistant crops would be banned for cultivation in the EU. Other
applications of directed mutagenesis for agricultural crops include increasing the
shelf-life of food products (e.g., non-browning mushrooms and apples), thereby
reducing food waste. Researchers are working to develop a variety of crop
improvements, including wheat that is resistant to powdery mildew (thereby
reducing fungicide use) and insect-resistant corn. More examples are listed in
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Table 1. Empirical evidence concerning the cultivation of GMOs indicates that they
have made substantial contributions to reducing the use of insecticides, to
promoting the shift to more environmentally-friendly herbicides, and to decreasing
the emission of greenhouse gases (e.g., Brookes and Barfoot 2020; Brookes,
Taheripour, and Tyner 2017; Smyth et al. 2011a,b). For example, Wesseler et al.
(2017) provide a detailed discussion of four transgenic crops that provide
nutritional benefits for malnourished children in Africa, while Qaim (2020)
discusses the wider implications for food security and sustainable agriculture.
These developments will also make it more difficult (i.e., more expensive) for the
EU to achieve the objectives of the EU Green Deal, which include zero net
emissions of greenhouse gases by 2050, with no person and no place left behind
(EC 2019).
A Way Out?
Thus far, the discussion has highlighted several real and potential implications of
the CJEU decision, which initiated a debate about possibilities for changing the
current situation. Initiatives have been instigated in order to adjust EU legislation
and policy concerning GMOs (Eriksson et al 2020a, Eriksson et al 2020b; Eriksson
et al 2020c). The EU Council has requested the EC to conduct a study on the legal
status of “novel genomic techniques” and, depending on the results of the study,
to develop a proposal for change (Council of the European Union 2019).
One crucial difficulty in changing the current situation has to do with the qualified
majority of Member States needed in order to adopt such changes. If a proposal
is submitted by the EC, it requires a qualified majority of 55% of the EU Member
States to vote in favor (16 out of 28 before Brexit, and currently 15 out of 27),
representing at least 65% of the total EU population (about 334 million before
Brexit, and currently 290 million). If these conditions are not met, the
requirements for a qualified majority increase. Furthermore, no more than three
countries may vote against the proposal (see Box 1).
As evidenced by the voting behavior of Member States with regard to the approval
of GMOs for import and processing since 2001, a qualified majority for or against
approval has never been reached. In an analysis of voting behavior concerning
approval between 2001 and 2014, Smart, Blum, and Wesseler (2015) identify
patterns in which some Member States voted for and some voted against, while
others switched. Since 2015, the pendulum has swung in the direction of the
“against” faction. The voting behavior of 2019 clearly reflects an increase in the
number of countries voting “against” or abstaining (Figure 1). The situation is likely
to become even more difficult in the wake of Brexit, as the UK has always been a
strong supporter of transgenic crops, in addition to having a relatively large
population.
Figure 1 provides an illustration of the voting behavior of the Standing Committee
and the Appeal Committee since 2013. The maximum number of Member States
voting in favor of a proposal was 14 in 2014. In 2019, the highest number in favor
was 12. The greatest share of the population was slightly more than 46%—almost
20% shy of reaching the qualified majority-population threshold. If a qualified
majority in favor of a change to Directive 2001/18 cannot be reached in either the
Standing Committee or the Appeal Committee, the EC decides.
Working Paper 01/2020 Justus Wesseler and Kai Purnhagen
12
The legislative procedure for changing Directive 2001/18 or any other EU
legislative act concerning GMOs also requires a qualified majority among the
representatives of the Member States in the Council. Not being able to reach
consensus on the approval of a GMO in the comitology procedure is hence a strong
indication that any proposed change to Directive 2001/18 is likewise unlikely to
receive a positive qualified majority, even ignoring the difficulty of reaching
agreement on the type of changes that would be required in the first place. As
experience shows, the more supportive the legislative proposal is toward reducing
regulatory hurdles for the approval for NPBTs (i.e., by reducing the costs of
approval), the stronger the opposition is likely to be. While “lighter” proposals,
which involve only marginal reductions in approval costs, might not receive strong
opposition, they might not resolve the potentially negative implications for R&D
and international trade. Independent of the details of proposed changes, changes
to Directive 2001/18 can be expected to take many years, as such proposals would
need to be developed by the EC voted on by the representatives of the Member
States in Council and the European Parliament.
The procedures, hence, for changing the Directive concerning the release of GMOs
into the environment question the feasibility of proposals calling for an extension
of the mutagenesis exemption to include additional technologies (e.g., CRISPR-
Cas TALEN or OMG), as proposed by such institutions as the Nationale Akademie
der Wissenschaften Leopoldina, Deutsche Forschungsgemeinschaft und Union der
deutschen Akademien der Wissenschaften (2019). Such proposals are unlikely to
be implemented soon, if at all.
Another possibility for challenging the decision by the CJEU and calling for action
by the EC could be through a “citizens’ initiative.” One such initiative has been
initiated (https://ec.europa.eu/citizens-
initiative/public/initiatives/open/details/2019/000012) and, if supported, it would
call on the EC to respond and act. This might be an alternative way to seek action
if the EC concludes (as a result of Council Decision 2019/1904) that no further
action is needed. In this case as well, however, any changes would require a
qualified majority in the Council and a supporting vote by the European Parliament.
At this point, there does not seem to be any quick way out of the current deadlock.
As proposed by Purnhagen (2019), another alternative could involve filing another
court case in a Member State different than France. In this case the local court
expresses an opinion different from the one issued by the French court based on
French law, and approves cultivation of a crop developed by using a NPBT. Such a
case could potentially be transferred to the CJEU, which would once again need to
decide. In such a case, however, it would be possible to submit facts other than
those presented to the court in the French case, possibly resulting in a different
outcome.
An alternative route could also be to initiate another case triggering a different
procedure from the one initiated by the Conseil d’État. A member state such as
the Netherlands or Sweden allows farmers to grow herbicide resistant oilseed rape
developed by NPBTs, the same herbicide resistant oilseed rape triggering the court
case in France. The Member State would not implement EU law and the EC initiate
a legal procedure, similar to the case initiated by the EC against Germany in the
Working Paper 01/2020 EU Regulation of New Plant Breeding Technologies
13
case nitrate emissions (EC 2017). In such procedures the role of the CJEU is a
different one. It would not be tied to help local courts deciding their case according
to the questions referred, but is rather tied to solve the case brought before it
including own fact finding. This may result in a different outcome.
Each of the solutions would also require the representatives presenting the facts
to be extremely well prepared. Depending on the outcome of such a case, it may,
however, well be that the representatives of the EC would still need to demonstrate
a willingness to adopt a change. The ultimate success of such an effort could be
questioned, given that EC representatives have applauded the current judgment
as a great decision providing clarity.
Further, as long as the CJEU maintains its interpretation of GMO legislation, and
particularly its absolute interpretation of the precautionary principle, future court
cases aimed at changing the implications of the current case should stress both
the relative safety of NPBTs (as mentioned in the Opinion by the General Advocate)
and the potential risks to the environment and human health associated with
restricting access to NPBTs.
Conclusions
In this contribution, we assess and discuss the implications of the decision reached
by the CJEU on July 2018. Our assessment is arguably speculative, as we are not
able to provide any quantitative calculation of the effects of this decision. It is
nevertheless based on legal facts, and the economic implications derived from the
assessment are based on economic theory.
The CJEU decision of July 2018 has far-reaching economic implications, given that
products derived through the application of NPBTs are currently regarded as GMOs,
such that they are not covered by the mutagenesis exemption. This reduces the
possibilities available to EU farmers to take advantage of NPBTs, thereby reducing
their comparative advantage. As a consequence, it will be more costly to achieve
the objectives of the European Green Deal.
The decision increases the costs of plant breeding both within and beyond the EU.
The “Brussels effect” may result in substantially fewer applications of NPBTs—not
only from within the EU, but also from countries that export to the EU. This is
particularly likely to affect the United States, as plant-breeding companies that
release crops in the US that are regarded as GMOs in the EU could potentially be
held liable under the Lanham Act. Even if this is not the case, any crops derived
from NPBTs would need approval for import and processing in the EU, thereby
increasing costs.
Many scientists and other stakeholder groups have requested a revision of the EU
policies on GMOs. The EU Council of Ministers has recently started exploring the
possibilities for a change. In addition, there is a legal possibility for clarifying the
legal uncertainty resulting from the CJEU decision. Nevertheless, any change in
policy—if possible at all—would take several years, given the highly controversial
nature of the topic. As new developments continue to emerge in the area in plant
breeding and biotechnology in general, the EU and its major trading partners will
be affected. This offers opportunities for countries like China and those supported
by China, which do not depend on exports to the EU. These countries are able to
Working Paper 01/2020 Justus Wesseler and Kai Purnhagen
14
adopt NPBTs and enjoy a relatively higher rate of growth in their agricultural
sectors, in addition to possessing the knowledge of new technologies, as well as
improvements in human health and environmental protection.
Working Paper 01/2020 EU Regulation of New Plant Breeding Technologies
15
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Table 1 Applications and Potential Applications of NPBTs in Agriculture
(Examples).
Plant
Trait
Improved food and feed quality
Alfalfa
Reduced lignin content1
Camelina
Improved fatty acid composition1
Lettuce
Increased vitamin C content1
Potato
Reduced arcylamide formation1
Oilseed rape
Improved fatty acid composition2
Soybean
Improved fatty acid composition1
Wheat
Low gluten content1
Improved fiber content1
Improved agronomic properties
Banana
Fungus resistance1
Cassava
Virus resistance1
Cherry
Virus resistance4
Cocoa
Fungus resistance1
Flax
Herbicide tolerance3
Corn
Drought tolerance1
Fungus resistance1
Oilseed Rape
Disease tolerance2
Herbicide tolerance2
Shatter tolerance3
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Rice
Fungus resistances1,4
Herbicide tolerance3
Salt tolerance1
Soybean
Drought tolerance1
Tomato
Bacterial resistance1
Wheat
Fungus resistance1
Source: Nationale Akademie der Wissenschaften Leopoldina, Deutsche
Forschungsgemeinschaft und Union der deutschen Akademien der
Wissenschaften (2019) note by superscript (1) along with a few additional
examples: 2) European GMO Initiative for a Unified Database System (2019); 3)
APHIS (2019); 4) Schaart et al. (2016).
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Table 2 Labeling Requirements for GMOs in the European Union
GM product
Example
Labeling
requirement
GM plants, seeds, and
food
Corn, corn seed, cotton seed,
soybean sprouts, tomato
Yes
Food produced from
GMOs
Corn flour, soybean oil, rape
seed oil
Yes
Food
additives/flavorings
produced from GMOs
Highly filtered lecithin extracted
from GM soybeans
Yes
GM feed
Corn
Yes
Feed produced from a
GMO
Corn gluten feed, soybean meal
Yes
Feed additive produced
from a GMO
Vitamin B2
Yes
Food from animals fed
on GM feed
Eggs, meat, milk
No
Food produced using a
GM enzyme
Bakery products produced using
amylase
No
Source: EC (2003c).
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Figure 1 Voting Behavior by EU Member States with regard to the Approval of
GMOs, 2013 to 2019.
Source: Authors, based on reports by Agrafacts, several years. Note: Panel A
shows the number of Member States that have voted in favor of approval, and
Panel B shows the percentage of EU population reached by Member States voting
0
2
4
6
8
10
12
14
16
020 40 60 80 100 120 140
Number of Member States
Votes in Chronological Order 2013 - 2019
A: Number of Member States in Favor
20,00%
25,00%
30,00%
35,00%
40,00%
45,00%
50,00%
55,00%
60,00%
020 40 60 80 100 120 140
Per Centage of EU Population
Votes in Chronological Order 2013 - 2019
B: Population Share of Number of Member States
in Favor
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24
in favor. Votes include decisions in the Standing Committee and the Appeal
Committee. The results are presented in chronological order from 2013 to 2019.
Box 1. Qualified Majority Voting in the EU
A qualified majority requires two threshold levels:
1. 55% of Member States must vote in favor: prior to Brexit, this translated to
16 out of 28, and it currently means 15 out of 27.
2. The proposal must be supported by members representing at least 65% of the
total EU population.
Blocking minority: at least four Council members representing more than 35%
of the EU population. This has been implemented to avoid a situation in which
three large countries (e.g., France, Germany, and Italy) could block a decision.
Special cases
When not all Member States participate in the vote (e.g., due to an opt-out in
certain policy areas):
1. 55% of the participating Council members must vote in favor.
2. The proposal must be supported by members representing at least 65% of the
total EU population.
For proposals not coming from the Commission or the High Representative:
1. 72% of all Council members (currently 21 Council members) must vote in
favor.
2. The proposal must be supported by members representing at least 65% of the
total EU population.
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Abstentions
An abstention under qualified majority voting counts as a vote against the
proposal. Abstention is not the same as not participating in the vote. Any
member can abstain at any time.
Source: https://www.consilium.europa.eu/en/council-eu/voting-
system/qualified-majority/
