The Bioterrorism Preparedness and Response Act of 2002 goes to Geneva, or, would bioterror get the same treatment as biotech under WTO rules?

• Author: Murray, Sean C.

INTRODUCTION

The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (1) ("the BT Act" or "the Act") was written and passed during the difficult, uncertain period of late 2001 and early 2002. This period saw a robust congressional response to the harrowing events of September 11 and to the anthrax mailings that followed: the PATRIOT Act, (2) the Authorization for Use of Military Force, (3) and the BT Act all emerged from this era, and purportedly empowered various governmental institutions and agencies to guard against newly revealed threats. Of these, the BT Act, specifically Title III of the Act, responded most directly to the threat of contamination (terroristic or otherwise) in the food supply. (4)

As with the several other attempts at legislative counterterrorism, questions have arisen regarding the efficacy of the BT Act and its compliance with the United States' international obligations. (5) In particular, a wide spectrum of commentators and actors both inside and outside of the international trade community has argued that the BT Act violates the United States' obligations under the World Trade Organization's ("WTO') Agreement on Sanitary and Phytosanitary Measures ("SPS" or "SPS Agreement"). (6) Most pointedly, it has been argued that Title III of the BT Act facially discriminates between foreign and domestic food producers and is not based on a risk assessment as the SPS Agreement requires. (7) According to Claire Boisen's in-depth analysis and argument, because the BT Act saddles foreign producers with new and considerable administrative burdens and costs while allowing domestic producers to continue business under existing regulations, (8) and because it does so without the scientific justification of a proper risk assessment, (9) the BT Act would likely constitute an impermissible restriction on international trade under the SPS Agreement and the relevant WTO jurisprudence. (10)

The arguments of Boisen and related commentators, however, do not meaningfully consider the opposing possibility: that the BT Act might in fact comply with at least the letter (if not the spirit) of some of the SPS Agreement's requirements to the satisfaction of a WTO dispute settlement panel, (11) particularly in light of the relatively deferential holding issued by the panel in the recent case, European Communities--Measures Affecting the Approval and Marketing of Biotech Products ("EC-Biotech"). (12)

In that case, the United States, Canada, and Argentina filed complaints before the WTO Dispute Settlement Body, claiming that various European Union restrictions on the importation and marketing of genetically modified ("GM") crops and food violated the EU's other treaty obligations under the SPS Agreement and General Agreement on Tariffs and Trade ("GATT') provisions. Of particular note, the United States claimed (1) that the EU, by failing to issue decisions regarding the approval or rejection of new GM crops and food, violated its obligation under Article 8 and Annex C of the SPS Agreement to avoid "undue delay" in approval procedures; (2) that this indefinite delay constituted a de facto moratorium on GM products, and that the EU failed to publish promptly a notification of this moratorium, in violation of SPS Agreement Article 7 and Annex B; (3) that this moratorium was not based on a risk assessment as required by SPS Agreement Article 5.1; and (4) that because no such moratorium applied to certain GM processing aids such as enzymes used in making European cheeses, the moratorium constituted an arbitrary or unjustifiable distinction in the level of protection applied to different GM products, in violation of SPS Article 5.5. (13)

Though the latter two claims were clearly the substantive crux of the United States' case, the panel ruled against the EU only with respect to the first claim, the procedural claim of undue delay in approvals. (14) Importantly, however, the panel concluded that the EU practice of refusing to issue decisions on the approval of new GM products did not constitute an SPS measure at all, and was therefore not subject to the SPS Agreement's requirements. (15) Because, according to the panel, the de facto moratorium was not a law, decree, regulation, requirement or procedure as defined by Annex A to the SPS Agreement, but was instead a "decision ... related to the application or operation of procedures," (16) the EU was under no obligation to base the moratorium on a risk assessment (17) or to avoid arbitrary distinctions between the moratorium and any other treatment of GM products. (18) By relying on this extraordinarily formalistic distinction, the panel largely sidestepped the fundamental but politically explosive question of the EU's right to balance health and safety as well as trade issues as it sees fit. Put another way, by contriving a means of avoiding substantive judgment of the EU moratorium under the SPS Agreement, the panel, however cautiously, deferred to the decisional authority of the EU.

As with the EU biotech measures challenged in the case described above, the BT Act is an example of an aggressive regulatory response to strongly felt threats, and one which may cross over the line between protection of health and safety on the one hand, and economic protectionism on the other. I suggest, therefore, that in light of this strong parallel between the EU biotech regime and the BT Act, and in the wake of the WTO panel ruling in the case of the former, a new treatment of the BT Act's status in the international trade arena is necessary. This Article attempts to provide that treatment, and implicitly to ask on a broader level whether a new balance between trade and health-safety issues may emerge in the WTO's dispute settlement jurisprudence after EC-Biotech.

Parts I and II of the Article analyze the primary claims that could be made against the BT Act, namely that it violates Articles 5.5 and 2.3, and Article 5.1 (respectively) of the SPS Agreement. Articles 5.5 and 2.3 require non-discrimination among products from countries in which comparable conditions prevail, (19) while Article 5.1 requires that SPS measures be based on a risk assessment. (20) Included in the analysis of these primary claims against the BT Act is the possibility that the Act would be judged less harshly by a WTO dispute settlement panel applying a standard of implicitly greater deference to national decision-making in the wake of EC-Biotech. Part III then briefly considers whether the approach of the panel in EC-Biotech may lead to a more consistently deferential stance in future SPS disputes. Finally, Part IV concludes that should a complaint be brought against the United States claiming that the BT Act violates the aforementioned articles of the SPS Agreement, the WTO dispute settlement panel would likely engage in a process of interpretation similar to that undertaken by the panel in EC-Biotech in an attempt to reach a largely deferential result.

1. THE BT ACT'S COMPLIANCE WITH ARTICLES 5.5 AND 2.3 OF THE SPS AGREEMENT

   The BT Act sets out new requirements for domestic and foreign facilities, two of which create significant, new procedural burdens for foreign facilities in particular. The Act requires facilities producing food for consumption in the United States to register extensive information with the FDA and to designate a U.S. agent for their company. (21) It further requires foreign food producers to provide the FDA with prior notice of any food shipment sent to the United States. (22) As implemented by the FDA in separate regulations, (23) these provisions require significant expenditures by foreign producers to ensure compliance, (24) and are therefore the crux of the claim that the BT Act violates U.S. trade obligations under the SPS Agreement.

   As an initial matter, it must be shown that the SPS Agreement applies to these sections of the BT Act. (25) The SPS Agreement, by its terms, applies only to measures taken "to protect human or animal life or health ... from risks arising from additives, contaminants, toxins or disease-causing organisms in foods, beverages or feedstuffs," (26) and that "directly or indirectly, affect international trade." (27) These definitions are broad, and were interpreted to apply even in EC-Biotech, wherein the measures in question also arguably fell under other agreements. (28) For its part, then, the BT Act is on its face an SPS measure because it explicitly declares its intention "[t]o improve the ability of the United States to prevent, prepare for, and respond to bioterrorism and other public health emergencies." (29) Just as clearly, the BT Act has a direct effect on international trade under the meaning of Article 1.1 of the SPS Agreement; by the United States' own estimates, the BT Act was likely to impose hundreds of millions of dollars of new costs per year on foreign food companies exporting products to the United States, (30) potentially causing some sixteen percent of those foreign food companies to cease exporting to the United States. (31) The BT Act is, therefore, subject to the SPS Agreement's requirements. Chief among these are the requirements of non-discrimination (Articles 5.5 and 2.3) and scientific justification of SPS measures through risk assessment (Article 5.1).

   Articles 5.5 and 2.3 enshrine the laudable principle that WTO member nations should not enact SPS measures that effectively disadvantage the products of other nations unless there is a genuine SPS reason to do 80. (32) Perhaps not surprisingly, the two articles are closely related in the WTO's dispute settlement jurisprudence, with Article 5.5 having been interpreted as a specific instance of the more general non-discrimination requirement contained in Article 2.3. (33) Thus, a violation of Article 5.5 will necessarily entail a violation of Article 2.3. (34) This construction is a great aid to the cause of judicial economy, and generally leads to...